By MacNicol & Associates In Morning Notes
May 14th, 2018
Daily Market Commentary
- Canadian stocks posted their best week since February as crude prices posted a second weekly gain, pushing the energy sector to its highest since January.
- Aurora Cannabis Inc., a Canadian provider of medical marijuana, agreed to buy rival MedReleaf Corp. for C$3.2 billion ($2.5 billion), gearing up for growth in demand for weed as governments ease restrictions on its use.
- More than half of Canadians under 35 years old said they are spending less because of recent interest rate increases, according to a survey by Nanos Research.
- European stocks fell with bonds as political strains from Italy to the U.K. outweighed optimism over waning global trade tensions. The euro and pound headed higher as the U.S. dollar came under pressure.
- Asian shares rose on Monday, with the regional benchmark heading for its highest close in seven weeks.
- Oil held losses below $71 as OPEC signaled it could fill in any supply gap if renewed U.S. sanctions curtail supply from Iran, the group’s third-largest producer.
- U.S. index-futures climb amid easing trade tensions after President Donald Trump offered a lifeline to telecom equipment maker ZTE and China’s Xi Jinping sent his top economic adviser to Washington.
- Euro-area bonds declined after European Central Bank policy maker Francois Villeroy de Galhau said that an increase in the deposit rate would be quarters, not years after the end of its asset-purchase program.
- Investors looking for income have more incentive to cast aside U.S. stocks for Treasury bills than they have in the past decade. The S&P 500 Index closed last week with a dividend yield of 1.89 percent, or 1 basis point less than the bond-equivalent yield on three-month bills. Friday was the first day since February 2008 when the S&P 500 had a lower yield, based on payouts for the past 12 months.
- Facebook says it has suspended 200 apps, pending a thorough investigation into whether they did misuse any data, in an update to the investigation and audit announced on March 21.
- Tesla Inc. has set up a new wholly owned company in Shanghai, moving a step closer to producing its electric vehicles in China and establishing its first gigafactory outside U.S. shores.
- The U.S. and China signaled a desire to avoid a costly trade war after President Donald Trump offered a lifeline to beleaguered telecom equipment maker ZTE Corp. and China’s Xi Jinping dispatched his top economic adviser to Washington.
- Chinese regulators have restarted their review of Qualcomm Inc.’s application to acquire NXP Semiconductors NV after having shelved the work earlier in reaction to growing trade tensions with the U.S., according to people familiar with the matter.
- Activist investors Carl Icahn and Darwin Deason prevailed in their bid to stymie Fujifilm Holdings Corp.’s $6.1 billion takeover of Xerox Corp.and to push out the U.S. office equipment supplier’s chief executive officer.
- European powers alarmed by Donald Trump’s withdrawal from the Iran nuclear accord set out this week on an urgent search for ways to hold the deal together and avoid a further escalation of violence in the Middle East.
- British consumers continued to rein in their spending in April, suggesting retailers saw no immediate comeback after a weather-blighted first quarter. Spending dropped 2 percent from a year earlier, matching the decline in March when the Beast from the East snowstorm hit sales, Visa and IHS Markit said in a report Monday. Spending in stores, as opposed to online, declined by 5.4 percent, the quickest pace for six years.
*All sources from Bloomberg unless otherwise specified