September 8th, 2017
Daily Market Commentary
- TransCanada Corp. asked Canadian regulators for a 30-day suspension on its applications for the Energy East and Eastern Mainline projects, adding to doubt about the future of two major pipelines that the nation’s energy producers had hoped for. The company said it needs time to review changes to the regulatory process that the National Energy Board recently made and will stop setting aside funds to be used during construction.
- Canadian stocks fell as Hurricane Irma weighed on insurance shares, while the loonie continued its upward march to the highest level since May 2015. The S&P/TSX Composite Index lost 35 points or 0.2 percent to 15,024.53, the benchmark’s fourth consecutive decline and its lowest close in more than two weeks. Financial shares lost 0.6 percent as Power Corp. of Canada fell 2.4 percent, Manulife Financial Corp. slipped 1.6 percent and Sun Life Financial Inc. lost 1 percent.
- The Stoxx Europe 600 Index rose 0.3 percent Thursday, even after the European Central Bank President failed to rein in a euro that advanced beyond $1.20 as he was speaking following the institution’s September meeting. The ECB boosted its 2017 growth forecast to 2.2 percent, the fastest since 2007
- Japan’s Topix index posted its biggest weekly drop in five months as geopolitical tensions and natural disasters weighed on sentiment. The yen has strengthened on four out of five days this week, gaining past 108 per dollar for the first time since November as investors sought safety following North Korea’s nuclear test on Sept. 3, a magnitude 8.0 earthquake off the coast of Chiapas, Mexico on Friday and on concern about the economic damage that Hurricane Irma may inflict on Florida.
- Oil headed for the first weekly gain since July as Gulf Coast refiners ramp up crude processing after disruptions from Hurricane Harvey. Futures were little changed in New York, up 3.4 percent for the week. About 8 percent of U.S. refining capacity remains shut after Harvey first made landfall two weeks ago, according to data compiled by Bloomberg. Almost a quarter of the nation’s capacity was halted following the storm. American crude stockpilesrose by 4.58 million barrels last week, the first gain since June
- Gold reached the highest in more than a year as the dollar slumped against the backdrop of a potential North Korean missile test and looming economic damage from natural disasters. Gold is set on pace for the best year since 2010, rising 18 percent to $1,352.92 an ounce at 11:11 a.m. in London on Friday. The metal earlier touched $1,357.61, the highest since August 2016.
- Newmont Mining Corp. and Newcrest Mining Ltd. led the gold industry’s attack against plans to raise a royalty rate levied on output in Western Australia, the key center for the world’s-second largest producer. The state, which hosts four of the country’s five biggest gold mines and sites operated by Newmont, Newcrest and South Africa’s Gold Fields Ltd., announced Thursday that the rate will rise to 3.75 percent from 2.5 percent to bolster the state’s finances.
- President Donald Trump said it’s not “inevitable” that the U.S. will wind up in a war with North Korea over its continued development of nuclear weapons, but that military action remains an option. “Nothing’s inevitable,” Trump said in a news conference on Thursday at the White House with the emir of Kuwait, Sheikh Sabah al-Ahmed al-Sabah. “I would prefer not going the route of the military, but it is something certainly that could happen.”
- The rally in Indonesian bank stocks may be nearing an end amid sluggish credit growth and tougher regulations for loan quality assessments. Equity analysts are now downgrading banking stocks after the Jakarta Finance Index rallied 21 percent this year — more than double that of the main gauge — as they expect nonperforming loans in the $527 billion industry to creep up again.
- Hurricane Irma remained on a collision course with southern Florida after devastating a chain of Caribbean islands, triggering the largest-ever evacuation in Miami-Dade County and threatening to become the most expensive storm in U.S. history.
- The European Central Bank’s scenarios for its asset purchases after 2017 could be implemented without adjusting the parameters of the program, according to euro-area officials familiar with the matter. The bond-buying options presented to policy makers this week involved combinations of monthly volumes and durations that all stick to existing limits, the people said, asking not to be named as the Governing Council’s deliberations are confidential.
- HNA Group Co. secured enough financing to go ahead with its planned $1 billion purchase of Singaporean warehousing-and-delivery company CWT Ltd., clearing a hurdle as the conglomerate faces scrutiny amid a Chinese government clampdown on overseas acquisitions.
- Investors are rejoicing after Felda Global Ventures Bhd., the world’s largest crude palm oil producer, named a new chairman. The appointment of Azhar Abdul Hamid is expected to improve the corporate governance of Felda Global, which has been rocked by aleadership tussle and a graft probe. Shares of the Malaysian state-linked company rose 2.5 percent as at 4:25 p.m. in Kuala Lumpur, paring earlier gains of as much as 5.7 percent.
- The rupee headed for its biggest weekly gain in a month amid a pick up in debt inflows and broad dollar weakness. Sovereign bonds rose Friday ahead of a weekly auction. Overseas funds raised holdings of rupee-denominated government and corporate bonds by 8.1b rupees ($127m) on Thursday, taking inflows in four days this week to 20.9b rupees: NSDL data; that compares with 19.6b rupees for all of last week
- The world’s biggest steelmaker is shipping even less to overseas markets, a sharp contrast to the flood of the past two years, which spurred global protests and anti-dumping duties, and hurt producer earnings from Europe to the U.S. Overseas sales sank to a four-month low of 6.52 million metric tons in August from 6.96 million in July and 9.01 million a year ago, according to customs on Friday. In the first eight months, shipments slumped 29 percent to 54.47 million tons, the lowest for the period since 2013, the government data show.
- Terry Gou, the billionaire behind Apple Inc.’s iPhone factories, is pressing his case to acquire Toshiba Corp.’s memory chips business for 2.1 trillion yen ($19.5 billion) in a last-ditch effort to beat out two American buyout firms in the tumultuous auction.
- The U.K. economy made a mixed start to the third quarter, output figures published Friday suggest. Manufacturing rose in July for the first time this year, boosted by a strong rebound in car production, and the trade deficit was little changed from a downwardly revised June. But construction shrank for a fourth consecutive month after a plunge in new orders in the second quarter.
- North Korea said the U.S. will “pay dearly” after its United Nations Ambassador Nikki Haley demanded the strongest sanctions ever to stopKim Jong Un’s nuclear weapons program.
- Mexico was hit by its strongest earthquake in a century, a temblor of magnitude 8.1 that shook buildings in the capital and left at least 15 people reported dead in southern states.
- Pacific Tsunami Warning Center says that based on the preliminary parameters of the magnitude 8.0 quake that struck off Mexico, “widespread tsunami waves are possible.”
- Saudi Arabia may be the latest country to give up on regime change in Syria and fall in line with Russia’s successful campaign to shore up President Bashar al-Assad. There are signs that the nations, long at odds over Syria, are now cooperating over a settlement that would leave Assad in place for the time being. The Saudis hosted a meeting of Syrian opposition factions last month, pushing for an accord between hardline anti-Assad groups and others less insistent on his immediate departure.
- Chubb Ltd., the U.S.-listed property and casualty insurer, is considering paring its stake in its Malaysian insurance unit to comply with a 70% limit on foreign ownership, according to people with knowledge of the matter.
*All sources from Bloomberg unless otherwise specified