July 20th, 2016
Daily Market Commentary
ECONOMIC NEWS
- MBA Mortgage Applications in the US were reportedly down 1.3%.
- Average earnings excluding bonuses were up 2.3% in quarter-over-quarter terms in the UK.
Commodities:
- Oil held near $45 a barrel as U.S. industry data showed a drop in crude stockpiles, paring a surplus in the world’s largest fuel consumer.
- Gold dropped as investors weigh higher odds for a U.S. interest rate increase this year against concerns over the strength of the global economy.
- Silver fell for a fourth straight session, the longest slump in more than eight months, as Citigroup Inc. said investor demand for the metal may sputter in the second half of the year.
- Copper retreated on concerns supply will keep outpacing demand as data showed output rising in China, the biggest producer and user of refined metal. A stronger dollar also hit commodities priced in the currency.
Canada:
- Brookfield Asset Management Inc., Canada’s largest alternative asset manager, signed a memorandum of understanding with State Bank of India to set up a joint venture to invest in stressed assets in India. Brookfield would put about 70 billion rupees ($1 billion) into the venture, the pair said an e-mailed statement on Wednesday.
United States:
- U.S. index futures rose, after equities slipped from a record, as the earnings season spurred optimism corporate health is robust enough to support stock gains.
- A gauge of the dollar held a three-day gain as economic data in the U.S. suggested the world’s biggest economy is set to continue expanding, renewing speculation that the Federal Reserve will raise interest rates by the end of the year.
- Unilever acquired Dollar Shave Club LLC in a deal said to be worth about $1 billion, gaining a firmer foothold in the burgeoning market for male grooming products and opening up a new front in its battle against Procter & Gamble Co.
- Earnings in North America will probably be cut by a record $35 billion to $40 billion in the second or third quarter as businesses gauge the impact of the U.K.’s vote to leave the European Union, said FiREapps, which makes software to help firms reduce the effect of foreign-exchange swings.
International:
- Technology and auto companies led European equities toward a four-week high amid encouraging earnings announcements.
- Volkswagen AG’s first-half earnings exceeded market expectations, sending its shares up the most in three months, as its namesake car brand showed signs of recovering from the emissions-cheating scandal and started to benefit from cost cuts.
- The European Banking Authority estimates as much as 470 billion euros ($517 billion) of financing is needed under the most conservative assumptions for what qualifies as “loss-absorbing.” Excluding senior unsecured debt could bring the amount to 790 billion euros, the regulator said in its first quantitative impact study on the EU’s minimum requirement for eligible liabilities and own funds, or MREL.
- Asian stocks climbed toward a three-month high as phone companies gained and a measure of Hong Kong shares entered a bull market. Japanese equities retreated after a six-day rally.
- China Film Co., the nation’s largest movie distributor, is planning a 4.09 billion yuan ($611 million) initial public offering in what would be the biggest IPO in the country’s entertainment industry.
*All information is taken from Bloomberg, unless otherwise noted.
