February 22, 2017
Daily Market Commentary
- Retail Sales in Canada were reportedly down 0.5% in month-over-month terms in December.
- The US Redbook index, which measures same-store sales growth of general merchandisers, was reportedly up 0.5% and 1.1% in month-over-month and year-over-year terms, respectively.
- Existing home sales in the US in January were up 3.3%, far above estimates.
- The Eurozone Consumer Price Index was down 0.8% and up 1.8% in month-over-month and year-over-year terms, respectively.
- UK GDP was up 0.7% and 2% in quarter-over-quarter and year-over-year terms, respectively.
- Goldman Sachs Group Inc. handed a surprise gift to bondholders in Canada this week by redeeming debt sooner than investors had expected, and some money managers are betting that other banks will follow its lead. The New York-based bank said Tuesday that it was redeeming all of its C$500 million ($380 million) in subordinated notes maturing in April 2022 for a price equal to principal plus accrued interest.
- ConocoPhillips said proved reserves of oil and natural gas tumbled 21 percent to a 15-year low as weak energy prices made some oil-sands assets in western Canada unprofitable. The company’s proved reserves — an important investor tool for calculating future earning power — fell to the equivalent of 6.42 billion barrels of crude at the end of 2016, down from 8.18 billion a year earlier.
- Service-related stocks and electronics makers provided the biggest support to the benchmark, while real estate companies and food shares weighed on the gauge. The S&P 500 Index reset its all-time high Tuesday on confidence in U.S. consumption.
- Planting decisions for U.S. corn and soybean farmers are a bit of a no-brainer this year. After confronting the prospects of losses on both crops in 2016, soybeans are now more profitable, which means the world’s largest grower may harvest a record crop for a second straight year.
- President Donald Trump’s sweeping crackdown on undocumented immigrants will strain an already tight U.S. job market, with one study suggesting that removing all of them would cost the economy as much as $5 trillion over 10 years. That represents the contribution of the millions of unauthorized workers to the world’s largest economy, about 3 percent of private-sector gross domestic product.
- The euro extended declines and bonds rose as European political risk ensured an ongoing demand for havens. The dollar edged higher before the release of Fed minutes. Europe’s currency dropped a fourth day, briefly passing 1.05 per dollar for the first time in more than six weeks as sovereign bonds across the region advanced.
- Bayer AG signaled that it remains confident about completing its $66 billion takeover of Monsanto Co. by the end of the year, even as it may face delays in winning over regulators. The German drugmaker will only seek approval for the transaction in the European Union next quarter after regulators there requested more information.
- Airbus Group SE booked new charges against the delayed A400M military-transport plane and warned that cost overruns will extend into 2018 at least, overshadowing company forecasts for increased earnings this year. Europe’s biggest planemaker announced a 2.2 billion-euro ($2.3 billion) hit to cover the cost of the latest glitches to afflict the troubled troop carrier and asked government buyers to help ease the burden going forward.
- Asian stocks extended the rally in equities worldwide after U.S. shares climbed to fresh records amid optimism global growth has started to accelerate. Hong Kong stocks rose the most in the region, driven by property shares, while Japan’s Topix closed at a 14-month high.
- China is considering easing limits on foreign ownership in life insurers, potentially removing a drag on the local business of global companies that are seeking to expand in the world’s second-biggest market, according to people familiar with the matter. The government may raise the long-standing 50 percent ceiling on an overseas life insurer’s stake in their local joint venture or let them wholly own a local unit.
- India will double the installed capacity in solar parks to 40 gigawatts, a measure aimed at fulfilling Prime Minister Narendra Modi’s ambitious green energy goals. The world’s second most populous country will add 50 new solar parks to install another 20 gigawatts of capacity, Power Minister Piyush Goyal told reporters after a cabinet meeting.
- Toshiba Corp. jumped the most on record on optimism the company will be able sell its memory chip division and survive the crisis caused by a writedown at its nuclear business. Shares soared 22 percent, the most on record, according to data compiled by Bloomberg going back to 1974. Volume on Wednesday was three times the 30-day average.
*All sources from Bloomberg unless otherwise specified