By MacNicol & Associates In Morning Notes
May 17th, 2018
Daily Market Commentary
- Canadian stocks rose for a ninth day, the longest advance since 2014, led by Canadian National Railway Co. and First Quantum Minerals Ltd.
- Two of North America’s biggest pipeline companies announced plans to repurchase subsidiaries as the industry seeks to curb future tax obligations in the face of a federal overhaul. Williams Cos. is buying the remaining stake in Williams Partners in a $10.5 billion all-stock deal, it said Thursday. Enbridge Inc. earlier said it made all-share proposals to the boards of its units to acquire all outstanding securities… exchange ratios reflect an aggregate value of C$11.4b, or 272m common shares.
- Global stocks were mixed on Thursday as investors digest a mixed bag of economic reports from strong U.S. factory data to weak machinery orders in Japan.
- U.S. stock-index futures retreat as investors await the release of jobless-claims data and the Philadelphia Fed Business Outlook. Walmart, Applied Materials, and Nordstrom are among companies reporting earnings.
- Benchmark U.S. crude oil rose 60 cents to $72.09 per barrel in electronic trading on the New York Mercantile Exchange.
- Gold holds near this year’s low as 10-year Treasury yields continue to edge higher, damping demand for non-interest bearing precious metals.
- Ten-year U.S. Treasury yields hit 3.1 percent on Thursday as global markets continued to adjust to an upbeat outlook for the world’s largest economy.
- House Speaker Paul Ryan warned a new Nafta deal had to be completed by Thursday, but Donald Trump’s trade chief told lawmakers he expects that deadline will not be met. Citing American trade law, Ryan had said May 17 was the last day to receive notice of intent to sign a deal for a new North American Free Trade Agreement that could be passed by the current Congress before a new crop of lawmakers change the political calculus. Talks, however, remain hung up on key issues.
- Debt levels that quadrupled in a decade have made emerging markets vulnerable to tightening financial conditions in the era of rising U.S. interest rates, Fitch Ratings said.
- The Federal Reserve is facing calls within its ranks to consider activating an obscure capital buffer meant to bolster big banks against coming storms when economic conditions are sunny. But for now, those pushing to weigh the demand for billions of dollars in new capital haven’t persuaded the key agency staffers who are reviewing the decision, according to people familiar with talks among U.S. banking agencies.
- Automakers among the biggest decliners in Hong Kong after China said it plans to remove more than 300 new energy vehicle models from a list of cars that get purchase tax exemptions.
- The U.S. stepped up its opposition to the Nord Stream 2 natural gas pipeline linking Russia and Germany, saying the project raises security concerns and that it could draw U.S. sanctions. The U.S. opposes the project because it will increase Europe’s reliance on Russia for gas supplies. It’s also worried the pipeline could open ways for Russia to install undersea surveillance equipment in the Baltic Sea, said Sandra Oudkirk, U.S. Deputy Assistant Secretary of State for Energy diplomacy.
- Hong Kong intervened to defend its currency peg for a second day after the city’s dollar fell to the weak end of its trading band. The Hong Kong Monetary Authority bought HK$9.5 billion ($1.2 billion) of local dollars overnight, the third-biggest intervention since the defense began last month.
- Ocado Group Plc’s agreement to license its home-delivery technology to U.S. supermarket chain Kroger Co. is the online grocer’s biggest deal so far, and a “materially larger” pact than Bernstein’s expectations.
- Prime Minister Theresa May’s inner Cabinet has drawn up a plan to fix the intractable Irish border problem: keeping some European Union customs rules for years after Brexit.
- Italy’s populist parties say they have virtually completed a government program which has dropped a request for a 250-billion-euro write-off from the European Central Bank and pledges tax cuts, pension reform and a review of European Union treaties.
- Special Counsel Robert Mueller appears to be turning his focus to President Donald Trump’s longtime adviser Roger Stone, bringing in a string of Stone’s associates in recent weeks for questioning about his activities during the 2016 campaign.
*All sources from Bloomberg unless otherwise specified