By MacNicol & Associates In Morning Notes
October 4th, 2017
Daily Market Commentary
- Canadian stocks rose for a fifth day, propelled by financial and mining stocks and briefly hitting their highest level since February. The S&P/TSX Composite Index added 24 points or 0.2 percent to 15,728.51. The benchmark has risen for 14 of the last 17 trading days and is less than 200 points from its all-time closing high set last February.
- Canadian Prime Minister Justin Trudeau proposed a tax of one dollar a gram on sales of marijuana when it’s legalized next year, his most detailed proposal yet on how he would raise revenue to pay for extra government costs while discouraging illegal sales. The C$1 (80 U.S. cents) tax could apply to recreational marijuana sold for up to C$10 a gram, Trudeau said after meeting the leaders of Canada’s 10 provinces in Ottawa on Tuesday.
- European stocks are little changed after their longest winning streak since July 2015, as investors weigh the fallout from a political crisis in Spain and prospects for U.S. tax cuts.
- The dollar fell and global stocks were mixed in a day packed with catalysts for markets. Investors are weighing the shortlist of candidates said to be in the running for the leadership of the Federal Reserve, as well as strong data out of Europe and mounting concerns about the crisis in Catalonia.
- Asian stocks gained for a fourth day after U.S. equities’ record close bolstered investor sentiment on global shares. Chinese and South Korean markets remain closed for the rest of the week, while Taiwan is shut today. The MSCI Asia Pacific Index gained 0.3 percent to 162.99 as of 4:36 p.m. in Hong Kong. Financial stocks led a rally in China H shares, with a gauge representing mainland equities closing at its highest level in more than two years.
- Oil declined to near $50 a barrel as U.S. industry data showed an increase in gasoline stockpiles and a boost in crude inventories at the nation’s biggest storage hub. Futures lost as much as 1 percent in New York, after falling 2.4 percent in the previous two sessions.
- Gold advances from near lowest close in almost eight weeks as investors await speeches from Federal Reserve officials, and U.S. payrolls data, for clues on path of U.S. monetary policy.
- Nickel ore shipments from the Philippines may tumble by almost a third this year on the lingering effect of an environmental crackdown in the world’s top shipper, although volumes will pick up in 2018 and help meet a global deficit, according to the head of one of the biggest producers.
- Iron ore shipments from Australia are rising as miners in the world’s biggest exporter boost cargoes, with vessel-tracking data signaling that nationwide flows expanded again last month to near an all-time high. Shipments from six ports including Port Hedland totaled 74.36 million metric tons in September, according to Global Ports data in NOON IRON complied by Bloomberg. That compares with an estimate of 72.2 million tons for August. The busiest ever month was December 2016, when exports were 75.2 million tons.
- India held interest rates at the lowest level since 2010, as it looks to spur growth without stoking inflation. The benchmark repurchase rate was kept at 6 percent, the Reserve Bank of India said in a statement in Mumbai Wednesday, as predicted by 31 of 32 economists in a Bloomberg survey. One had expected a cut to 5.75 percent.
- Centrica Plc slumped to its lowest level since 2003 as the U.K. government will announce measures to curb energy household bills. Shares in the U.K.’s biggest power and gas supplier to homes fell as much as 5.9 percent and SSE Plc dropped 2.8 percent after Energy Secretary Greg Clark confirmed an earlier report by the Sun newspaper that Prime Minister Theresa May will announce new energy price cap legislation in her speech at the Conservative Party conference in Manchester.
- U.S. consumers are putting fewer soft drinks in their grocery carts. But luckily for PepsiCo Inc., they’re still loading up on snacks. The food-and-beverage giant topped analysts’ earnings estimates last quarter after growth of its Frito-Lay business and overseas operations helped make up for moribund beverage demand in North America.
- Amazon.com Inc. was hit by a European Union order to pay 250 million euros ($294 million) plus interest in back taxes to Luxembourg as the world’s biggest online retailer became the latest U.S. giant to fall foul of the bloc’s state-aid rules.
- Royal Dutch Shell Plc said it’s scrapped the $900 million sale of its stake in a Thai natural gas field to a unit of Kuwait’s state oil company because of delays caused by a disagreement with the Southeast Asian nation’s government. Shell and a subsidiary of Kuwait Foreign Petroleum Exploration Co. have mutually agreed to cancel the deal for two subsidiaries that own a combined 22.2 percent of the offshore Bongkot field and adjoining acreage, the European oil major said in a statement Wednesday.
- Catalonia’s separatist leadership said nothing will stop it setting up an independent republic, dismissing the condemnation of Spanish King Felipe VI as the breakaway region’s president prepared to deliver his own address on Wednesday evening. Regional government spokesman Jordi Turull said the monarch’s criticism of Sunday’s illegal referendum, with no reference to the police violence that saw more than 800 people injured, had given a “free bar” to state forces as they try to shut down the secessionists.
- Glencore Plc is doubling down on its zinc bet after the metal’s price rallied to a 10-year high. The Swiss commodities giant, already the world’s top zinc miner, said on Tuesday that it’s planning to increase its stake in Peru’s Volcan Cia. Minera SAA, the largest producer of the metal in Latin America.
- Yahoo, the internet company acquired by Verizon Communications Inc. this year, now believes a 2013 security breach exposed all 3 billion of its users at the time. The assessment, based on new intelligence obtained after the $4.5 billion acquisition, compares with Yahoo’s initial estimate that 1 billion accounts were compromised. The information stolen didn’t include passwords in clear text, payment data or bank accounts. Yahoo is notifying users.
- Office Depot Inc. is betting that a technology makeover can help the chain rebound from a punishing retail slump. The office-supply company agreed to buy CompuCom Systems Inc. for about $1 billion, giving it a platform to sell tech services to business customers. Office Depot also cut its forecast on Tuesday, bringing fresh urgency to its comeback plan. The outlook sent the shares tumbling as much as 12 percent in late trading.
- SIA Engineering Co., the aircraft maintenance provider controlled by Singapore’s national carrier, plunged the most in seven years after JPMorgan Chase & Co. sold its stake in the company. The stock dropped as much as 9 percent Wednesday, the largest intraday decline since August 2010. The shares traded 5.5 percent lower at S$3.27 as of 12:47 p.m. in Singapore.
- Uber Technologies Inc. will move forward with a major investment deal from SoftBank Group Corp. and approved a slate of governance reforms that will limit the influence of co-founder Travis Kalanick and early backers. The 11-person board voted unanimously Tuesday to approve sweeping changes to the company’s power structure, the San Francisco-based company said.
- General Insurance Corp., India’s largest reinsurer, and its owner will seek as much as 113.7 billion rupees ($1.7 billion) after setting terms for the third-biggest initial public offering on record in the South Asian nation.
- The Trump administration will ask Congress to provide $29 billion in disaster aid and national flood insurance for hurricane-recovery efforts, a Republican lawmaker said Tuesday. Of that amount, $16 billion would be used for loan forgiveness under the National Flood Insurance Program and a little more than $12 billion would go for federal disaster relief operations, said the lawmaker, who spoke on condition of anonymity.
- Trading of European stocks on dark markets will probably triple as a result of the MiFID II overhaul, the opposite of what the architects of the law intended, as the new rules give some venues flexibility in how they price shares.
- U.S. Securities and Exchange Commission Chairman Jay Clayton will make a tough sales pitch Wednesday when he tries to convince lawmakers that his agency can protect reams of personal data shortly after it disclosed a hack that shook confidence in Wall Street’s top regulator. Clayton is testifying at a U.S. House hearing, where he is expected to be grilled about a massive new database being built that is meant to help the SEC quickly figure out what causes market disruptions and investigate illegal trading.
- Wells Fargo & Co. had its credit rating cut by one level by Fitch Ratings on concerns about the bank’s governance and lower future earnings. The lender’s long-term rating fell to A+ from AA- and the outlook is stable, Fitch said Tuesday in a statement. The bank subsidiary was also cut one grade to AA-, the ratings company said.
*All sources from Bloomberg unless otherwise specified