December 11th, 2020
Daily Market Commentary
- Canadian equity markets erased earlier losses to close Thursday’s session with a small gain. The S&P/TSX Composite index rose 0.2% in Toronto, led by energy. Meanwhile, consumer staples were the worst performing stocks.
- Capstone Mining enters into a definitive Precious Metals Purchase Agreement with Wheaton Precious Metals International, a unit of Wheaton Precious Metals. Wheaton will pay an upfront cash consideration of $150 million upon closing for 50% of the silver production until 10 million ounces have been delivered, thereafter dropping to 33% of silver production for the life of mine from the company’s Cozamin Mine in Zacatecas, Mexico.
- European equities fell as the U.K. warned of a stronger possibility of a no-deal Brexit, while Ericsson AB led telecoms lower after filing a lawsuit. The Stoxx Europe 600 Index dropped as much as 1.1%, trading down 0.7% by 9:15 a.m. in London. Telecoms tumbled as Ericsson slumped after suing Samsung Electronics Co. in the U.S., risking a hit to its operating income. The more domestically oriented FTSE 250 Index was 0.6% lower, after U.K. Prime Minister Boris Johnson urged business and the public to prepare for life at the end of the year without a trade deal with the European Union.
- Energy shares led gains in Asia on Friday, putting the regional benchmark stock gauge on course for a sixth straight weekly gain. Hong Kong-listed Cnooc rallied 6.1%, recovering from recent declines following its addition to a U.S. blacklist. China Petroleum & Chemical climbed 4.5% as oil prices headed for a weekly advance, while in India, Oil & Natural Gas Corp. surged as much as 14% after Morgan Stanley upgraded the stock.
- S&P 500 e-mini futures and Nasdaq 100 futures fall 0.6%, with the fate of an additional relief package in Washington remaining unresolved as Democrats and Republicans continue to negotiate
- Oil retreated in London, slipping from a nine-month high and cooling a rally that has added more than 40% to crude prices since early November.
- Gold steadied as the dollar strengthened amid fading prospects for a U.S. stimulus deal, while jobs data raised questions over the economic recovery. The attempt to draw up a coronavirus relief package hit another roadblock as Senate Majority Leader Mitch McConnell’s top lieutenants said key portions of a compromise proposal aren’t likely to get backing from the majority of Republicans. Meanwhile, applications for U.S. unemployment benefits surged last week, topping estimates with the highest level since September, casting a shadow over the strength of the recovery.
- European Union leaders meeting in Brussels resolved a standoff with two eastern member states that had threatened to delay a historic $2.2 trillion budget and stimulus package just as the latest wave of coronavirus infections ravages the continent’s economies.
- Traders loaded up on bets the Bank of England will cut interest rates to help contain the fallout of a potential collapse in post-Brexit trade talks after Governor Andrew Bailey said the central bank has a lot in its armory to deal with any disruption. Speaking after the publication of the BOE’s health check for the financial system, Bailey said the central bank has a substantial array of tools it would deploy if a disruptive Brexit causes substantial stress in markets. Investors are now almost fully pricing in a 10-basis-point cut to 0% in June.
- Wall Street’s biggest banks are predicting the coronavirus-hit world economy will crawl through the early days of 2021 before bouncing back as vaccines and more fiscal stimulus flow into it. After a year which saw the unanticipated shock of the deepest recession since the Great Depression, economists are bracing for a shaky start to the new year as 2020 ends with a spike in infections and further rounds of restrictions.
- President Donald Trump and his party raised $207.5 million in a less than three-week stretch after the U.S. election, fueled by outrage-filled solicitations to donors as he waged an unsuccessful challenge of the results. Money flooded into Trump’s coffers at a much higher rate after he began to seek contributions to fight widespread voter fraud and election rigging, despite no evidence of either, after his loss to President-elect Joe Biden, according to filings with the Federal Election Commission.
- Chinese authorities have detained Haze Fan, who works for the Bloomberg News bureau in Beijing, on suspicion of endangering national security. Fan was last in contact with one of her editors around 11:30 a.m. local time on Monday. Shortly after, she was seen being escorted from her apartment building by plain clothes security officials.
- Barclays Plc is looking to reduce its real estate expenses in the U.K., U.S. and India as the shift to remote working adds fuel to its cost-cutting ambitions. The bank could announce changes early next year although the board has not taken a final decision on the extent and timing of any measures, people with knowledge of the matter said.
- Vaccine makers, including two of the biggest in the world, suffered setbacks in the push to get more Covid-19 shots across the line, tempering a run of positive news. Sanofi and GlaxoSmithKline Plc delayed advanced trials of their experimental Covid-19 shot after it failed to produce a strong enough response in older people, pushing its potential availability to the end of next year.
*All sources from Bloomberg unless otherwise specified