December 18th, 2020
Daily Market Commentary
- Oil workers in Alberta are falling victim to a growing spread of the pandemic in the Canadian province’s remote north, with a Chevron Corp.site among the latest to be struck. Chevron’s Kaybob operation in the Duvernay shale formation and Syncrude Canada Ltd.’s Aurora oil-sands mine were added to a government list that now figures 11 oil-production sites as outbreak locations. Other companies in the list include Canadian Natural Resources Ltd., Suncor Energy Inc. and Imperial Oil Ltd. After being spared from the worst of the pandemic earlier this year, Canada is now averaging 6,500 new cases a day, more than triple the rate during the initial wave in April and May. Alberta, one of the last provinces to be badly hit, is now under strict lockdown measures with the highest rate of new active cases in the country.
- Meat packers across North America are bracing for a resurgence of coronavirus cases, trying to avoid the shutdowns that left supermarket shelves empty earlier in the pandemic. Cargill Inc. has temporarily idled one of its beef plants in Canada after some employees tested positive. JBS, the world’s top meat producer, sent thousands of vulnerable U.S. workers home on paid leave, while Sanderson Farms Inc. said it’s now facing higher absenteeism at its plants than earlier in the pandemic.
- Canada’s billionaire Weston family may look for deals in its namesake food business after restoring its profitability, according to Scotia Capital Inc. George Weston Ltd., the Toronto-listed holding company that controls supermarket chain Loblaw Companies Ltd., could either bulk up or sell Weston Foods, its smallest business unit, Scotia Capital analyst Patricia Baker said Thursday in a report to investors.
- European stocks were fairly steady on the final day of the week, edging higher for a fifth straight session, as investors monitored commentary on Brexit trade talks. The Stoxx Europe 600 index erased a small decline to gain 0.2% at 9:17 a.m. in London, with communications and health care among the best performers and miners advancing after copper topped $8,000 a ton for the first time in more than seven years. Real estate and financials slipped.
- Asian stocks traded lower on Friday as shares in Australia and New Zealand slumped. Even so, the regional stock gauge was headed for a seventh straight weekly advance, the longest run since January. A cluster of Covid-19 infections in Sydney’s northern beaches stoked investor caution, causing Australia’s benchmark gauge to slip 1.2%. Qantas Airways fell 3.5% as travel names dropped. Japan’s Nikkei 225 fell 0.2% as the central bank left policy unchanged. Data showed the country’s key consumer prices slid at the fastest pace in 10 years in November.
- The European Union’s chief Brexit negotiator, Michel Barnier, warned British Prime Minister Boris Johnson that he will have to to accept limits on access to the single market in return for greater control over fishing — or face no deal. After his British counterpart issued a statement on Thursday night describing the talks as “blocked,” Barnier said a deal could be struck if both sides make “a real effort.” But, in a speech to the European Parliament on Friday, he gave a stark assessment of the ultimatum the EU is giving to the British: access to the EU’s single market will be conditional on keeping British fishing waters open to boats from the bloc.
- Oil was steady after its highest close in almost 10 months as U.S. lawmakers worked toward finalizing a stimulus deal that may boost near-term demand ahead of a broad roll-out of the Covid-19 vaccine. Futures in New York were near $48, headed for a seventh weekly gain. Oil is the “vaccine trade” at the moment, according to Goldman Sachs Group Inc., and prices have gained further support as the U.S. works through the final points of a stimulus package worth almost $900 billion.
- Gold headed for a third weekly advance as U.S. lawmakers tried to agree an aid deal and investors weighed comments from the Federal Reserve about future support. As well as expectations for more stimulus, gold has been boosted this week by the dollar’s slump to the lowest in two years.
- Copper topped $8,000 a ton for the first time in more than seven years, with Goldman Sachs Group Inc. and BlackRock Inc. pointing to the start of a new long-term bull market as supply lags an expected demand boom. The market is witnessing the sharpest rally in more than a decade, with China’s appetite for commodities and supply snags early on in the Covid-19 pandemic lifting copper about 80% from its March lows. Expectations for a deficit, the weaker dollar, and its role in green technology have also fueled gains.
- The U.S. Food and Drug Administration will work quickly toward authorizing Moderna Inc.’s Covid-19 vaccine that agency advisers voted Thursday to recommend, Commissioner Stephen Hahn said. The regulator told Moderna “that it will rapidly work toward finalization and issuance of an emergency use authorization,” Hahn said late Thursday in a statement. “The agency has also notified the U.S. Centers for Disease Control and Prevention and Operation Warp Speed, so they can execute their plans for timely vaccine distribution.”
- Tesla is set to become the most valuable company to ever be added to the S&P 500 next week as Wall Street’s most polarizing stock ends its extraordinary year with a dramatic victory over its many critics. Tesla Inc. edged higher Friday as Wall Street’s most polarizing stock prepares for its debut on the S&P 500 next week as the benchmark’s sixth-largest company with a market value of more than $620 billion.
- Coinbase Global Inc., the biggest U.S. cryptocurrency exchange, said it has filed confidentially with the Securities and Exchange Commission to go public it what’s anticipated to be a break-through moment for the industry. The San Francisco-based company said in a statement that it expects its draft registration filing to become effective after the SEC completes its review process. The company didn’t provide further details of its listing plans and a representative declined to comment beyond the announcement. Coinbase was valued at more than $8 billion in 2018 after a $300 million funding round led by Tiger Global Management.
- Siemens AG, Europe’s largest engineering company, is exploring a fresh attempt to sell its postal and airport logistics unit, according to people familiar with the matter. The Munich-based company is discussing options for Siemens Logistics GmbH with potential advisers, the people said, asking not to be identified because discussions are private. It could start gauging interest in the unit, which makes equipment to sort baggage and parcels, as soon as the first half of next year, one of the people said.
- Congress is facing down a midnight deadline to pass a pandemic relief measure as part of a massive government spending bill or rush through another stopgap to keep the government funded through at least the weekend while talks continue. Several sticking points on the aid package have delayed an agreement. Some senators are objecting to certain provisions in the stimulus measure and may not go along with another funding extension if its needed, Senator John Thune, the chamber’s No. 2 GOP leader, said Thursday.
- The U.S. is preparing to blacklist Semiconductor Manufacturing International Corp. and dozens of other Chinese companies, Reuters reported, citing people familiar with the matter. Shares in China’s top chipmaker slid 5.2% Friday in Hong Kong after Reuters reported outgoing President Donald Trump is set to add around 80 more companies and their affiliates to the Commerce Department’s Entity List. The majority of those are Chinese and will join the likes of Huawei Technologies Co. on a list that denies them access to U.S. technology from software to circuitry, it said.
- UiPath Inc., an automation software maker that could be valued at more than $20 billion, said it has filed confidentially for an initial public offering. The size and price of the offering hasn’t been determined yet, UiPath said in a statement Thursday confirming an earlier report by Bloomberg. The IPO could come in the first half of 2021, according to people familiar with the matter. The New York-based software maker that helps companies automate routine processes was working with JPMorgan Chase & Co., Morgan Stanley, Bank of America Corp. and Credit Suisse Group AG, Bloomberg has reported.
*All sources from Bloomberg unless otherwise specified