February 15, 2017

Daily Market Commentary




Economic News:

  • European stocks rose, heading for their longest winning streak in 18 months, as they joined a global equity rally fueled by Federal Reserve Chair Janet Yellen’s stance that more interest-rate increases would be appropriate if the world’s largest economy stays on course.
  • Chinese stocks in Hong Kong jumped the most in Asia, led by banks, after record levels of new credit fueled optimism over the strength of the economy. Banks accounted for seven of the 10 biggest movers, with Agricultural Bank of China Ltd. surging 6.1 percent. CGN Power Co. led gains by power generators, while Galaxy Entertainment Group Ltd. fell from a two-month high.
  • Federal Reserve Chair Janet Yellen set a relatively high hurdle for shrinking the central bank’s balance sheet, leading some analysts to conclude that such a move won’t occur this year. She told the Senate Banking Committee on Tuesday that the Fed’s focus was on raising interest rates to keep the economy in balance, and not on reducing its holdings of bonds.



  • Metals: Gold: 1226.52 (-$1.61, -0.13%), Silver: 17.88 (-$0.08, -0.44%); Copper: 2.7490 (+0.44%); Aluminum: 0.8587 (+0.34%); Nickel: 4.9048 (+0.42%); Zinc: 1.3107 (-0.45%)
  • Energy: Crude: 52.86 (-0.64%); Brent: 55.64 (-0.59%); Nat Gas: 2.97 (+2.24%)
  • Saudi Arabia told OPEC that it cut oil production by the most in more than eight years, going beyond its obligations under a deal to balance world markets. The kingdom reported that it reduced output by 717,600 barrels a day last month to 9.748 million a day.
  • The world’s two biggest copper mines may both be halted by the end of the week as Freeport-McMoRan Inc. said it plans to suspend Grasberg operations in Indonesia, days after BHP Billiton Ltd. shut Chile’s Escondida. Prices headed for the highest close in more than 20 months.
  • The top nickel shipper intensified a mining crackdown as the Philippine environment department cancelled 75 agreements for projects near watersheds, vowed no new production contracts will be issued in sensitive areas and pledged more checkups on mines already slated for closure.
  • China, the world’s biggest producer and consumer of coal, is considering reinstating output restrictions to avoid the return of a glut after easing limits during winter. Shares in the country’s coal miners jumped along with futures prices.



  • Six Canadian lenders including Royal Bank of Canada and Toronto-Dominion Bank reached record highs Monday, extending a North American bank rally as analysts predict higher profits.
  • Canadian stocks rose, with the benchmark index extending a record high, as a rally in health-care shares helped offset losses in utilities. Utility shares fell the most as Federal Reserve Chair Janet Yellen stressed the need for more interest-rate increases in a testimony before Congress, reducing the allure of equity income relative to fixed income.
  • The European Parliament approved a landmark free-trade agreement with Canada, shoring up Europe’s market-opening clout in the face of a populist surge across the continent and U.S. President Donald Trump’s protectionist tilt.
  • Allianz SE’s infrastructure and private equity investment arm and the Abu Dhabi Investment Authority are among companies planning binding offers for part of a 15 percent stake in Italian toll-road operator Autostrade per L’Italia SpA, people familiar with the matter said. Caisse de Depot et Placement du Quebec, Canada’s second-largest pension fund, is also weighing an offer.
  • Teck Resources Ltd. posted profit that beat expectations as Canada’s largest diversified miner received higher prices for its steelmaking coal. Net income of C$697 million ($533 million) in the fourth quarter compared with a year-ago loss of C$459 million.


United States:

  • The U.K. government says it still plans to have U.S. President Donald Trump make a state visit to Britain even after a petition calling for the invitation to be rescinded attracted more than 1.8 million signatures.
  • White House National Security Adviser Michael Flynn resigned Monday amid a snowballing controversy over whether he lied about his contacts with a Russian official, throwing President Donald Trump’s security team into turmoil just weeks into his term.
  • PepsiCo Inc. posted fourth-quarter profit that exceeded analysts’ estimates after its push into healthier products bolstered sales in North America. Earnings were $1.20 a share, excluding some items, the Purchase, New York-based Company said Wednesday.
  • As President Donald Trump calls for $1 trillion of spending on roads, rail, bridges and airports, the U.S. Transportation Department is being faulted for allocating billions for infrastructure upgrades despite “high-level concerns” raised by application reviewers.
  • American International Group Inc. posted its fourth loss in six quarters, burned again by higher-than-expected claims costs as Chief Executive Officer Peter Hancock struggles to sustain profitability. The net loss widened to $3.04 billion, or $2.96 a share, from a $1.84 billion, or $1.50, a year earlier.



  • Rolls-Royce Holdings Plc Chief Executive Officer Warren East said the struggling aircraft-engine manufacturer will deepen costs cuts and restructure or sell the weakest parts of its business after profit dropped by almost half in 2016.
  • India’s clampdown on black money to boost transparency in the financial system continued to cut demand for gold in the world’s second-largest consumer, with imports extending a decline last month. Overseas purchases fell 28 percent to 58.6 metric tons in January from a year earlier, according to a person familiar with provisional data from the finance ministry.
  • Toshiba Corp. missed its own deadline for announcing earnings and detailing losses in its nuclear business, shaking investor confidence that the Japanese company has control over its finances. Toshiba’s shares dropped the most in almost a month after it failed to release earnings for the nine months through December at noon Tokyo time, as it had previously pledged.
  • Tata Motors Ltd.’s quarterly earnings plunged 97 percent after the company provided for damages to its luxury vehicles from explosions at the Tianjin port in China and a decline in contributions from its Jaguar Land Rover unit. The shares slumped the most in three months. The company posted net income of 937.7 million rupees ($14 million) in the three months ended December, after a 7.17-billion rupee charge related to the August 2015 explosion.
  • PSA Group, the maker of Peugeot and Citroen cars, is exploring an acquisition of General Motors Co.’s European business, according to people familiar with the matter, in a deal that would transform the region’s automotive landscape.
  • Credit Suisse Group AG posted a fourth-quarter loss of 2.35 billion francs ($2.34 billion) after taking a charge to settle a U.S. investigation into the role of its mortgage securities business in the 2008 financial crisis. The bank pledged to cut between 5,500 and 6,500 jobs this year.
  • Anglo American Platinum Ltd. agreed to sell holdings in a South African mine and nearby chrome-processing plant for as much as 6.4 billion rand ($493 million) as the world’s largest platinum producer streamlines to focus on modern, lower-cost operations.




*All sources from Bloomberg unless otherwise specified