April 5th, 2017

Daily Market Commentary




Economic News:

  • The ISM Non-Manufacturing PMI in the  US was reported at 55.2, below estimates.
  • The Markit Services PMI was quoted at 52.8, also below estimates.
  • The EU Markit PMI Composite was quoted at 56.4, below estimates.


  • Toronto’s residential housing market showed no signs of cooling last month, with the average sale price soaring a record 33 percent from a year ago, pushing the cost of a detached home in the heart of the city to almost C$1.6 million ($1.2 million).
  • Quebec is reaping the rewards of its improved finances in the bond market, lowering its long-term borrowing costs to near parity with Ontario for the first time. The spread, or difference in yields, between Ontario’s 10-year bond maturing in June 2026 and Quebec’s securities due in September that year shrank to a record-low one basis point on March 31.

United States:

  • U.S. index futures were little changed as investors weighed increased equity valuations amid skepticism on economic growth as the earnings season gets under way. The benchmark was little changed on Tuesday, with volatility dropping for the first time in four sessions.
  • JAB Holding Co. agreed to buy U.S. bakery chain Panera Bread Co. for about $7.5 billion, adding to a food empire that spans coffee, bagels and doughnuts. Panera investors will receive $315 per share in cash, the companies said in a statement Wednesday. That’s 20 percent higher than the closing price on March 31.
  • Seadrill Ltd., the offshore driller controlled by billionaire John Fredriksen, plunged for a second day amid speculation the company will be forced to file for bankruptcy as talks with investors and creditors drag on. Seadrill on Tuesday reached an agreement to extend the maturity on loans totaling $2.9 billion, pushing back a deadline for the restructuring to July 31 from the end of this month.


  • European stocks were little changed as miners and oil companies climbed, while auto-related shares trailed. The Stoxx Europe 600 Index rose less than 0.1 percent at 8:38 a.m. in London. The benchmark has climbed in five of the past six sessions, and last week completed its third straight quarterly gain.
  • The U.K.’s services sector grew faster than expected in March and surging costs prompted companies to raise their prices at the quickest pace in 8 1/2 years. The momentum in IHS Markit’s monthly Purchasing Managers’ Index was accompanied by stronger growth in new business. Even so, the survey reflected gathering storm clouds for the U.K. economy as hiring slowed and the pickup in prices added to pressure on consumers already facing the fastest inflation since 2013.
  • The European Union’s chief Brexit negotiator said the U.K. must settle the details of its divorce from the EU before discussing any future free-trade deal or risk crashing out without an accord, in a rebuff to Prime Minister Theresa May.
  • Chinese stocks jumped the most in more than seven months as materials and industrial companies led gains on optimism plans for a new economic zone near Beijing will boost earnings.
  • China National Chemical Corp. won European Union antitrust approval for its $43 billion takeover of Swiss pesticide maker Syngenta AG, a day after the U.S., bringing China’s largest foreign acquisition closer to the finish line.

*All sources from Bloomberg unless otherwise specified