January, 27th 2017
Daily Market Commentary
- European stocks edged lower, trimming a weekly gain, as UBS Group AG paced banks’ first decline in four days.
- S. stock-index futures were steady on Friday, with benchmark indexes set to hover close to record highs reached this week, as investors await further confirmation of a rebound in corporate profits before chasing stocks higher.
- The dollar pared its weekly loss, benefiting from central bank action in Japan and heightened political risks from Turkey to Mexico. European stocks retreated as UBS Group AG led a decline in banking shares.
- Import prices in Germany, Europe’s largest economy, increased at the fastest pace in almost five years in December, adding to signs that inflation pressures may be stronger than anticipated.
- The world’s most famous measure of volatility in financial markets is flashing a sign akin to boredom — languishing around levels that prevailed before the global crisis. Problem is, the VIX is tied to the U.S. S&P 500 index. Take a step back to look at the global picture, and the early days of 2017 are showing elevated jumpiness similar to that seen in the past two years.
- While equity volatility is currently low, investors are preparing for more turmoil ahead as Europe’s elections approach. Futures betting on swings in the Euro Stoxx 50 Index over the next three months trade at a record high relative to two-month contracts, a premium that isn’t priced in to the same extent in the currency market.
- Metals: Gold: 1184.39 (-$4.11, -0.35%), Silver: 16.74 (-$0.07, -0.39%); Copper: 2.6785 (+0.21%); Aluminum: 0.8272 (+0.22%); Nickel: 4.3061 (+0.90%); Zinc: 1.2576 (+0.36%)
- Energy: Crude: 53.41 (-0.69%); Brent: 55.76 (-0.85%); Nat Gas: 3.27 (-3.43%)
- Gold retreats for fourth straight day, poised for longest losing run since October, after U.S. stocks extend rally, signaling investors favor riskier assets.
- The head of Potash Corp. of Saskatchewan Inc., the fertilizer producer that’s planning to merge with Agrium Inc., says better pricing for its namesake fertilizer and strengthening demand may help contract negotiations with India and China.
- Celestica Inc., a Canadian designer and manufacturer of electronic components, is back on the acquisition hunt. The Toronto-based firm is planning to make several purchases in the second half of 2017, targeting companies with annual revenue from $250 million to $350 million, Chief Executive Officer Rob Mionis said in a phone interview.
- Canadian National Railway Co. reported fourth-quarter profit that topped analysts’ estimates as the country’s biggest rail carrier reduced labor and equipment-rental costs. Adjusted earnings rose to C$1.23 a share, Canadian National said Tuesday in a statement.
- AltaGas Ltd. is buying WGL Holdings Inc. for $6 billion in the latest Canadian blockbuster takeover of a U.S. energy company.
- Cisco Systems Inc. agreed to acquire AppDynamics Inc. for $3.7 billion, snapping up the fast-growing software maker just before it planned to go public.
- The dollar has peaked and will probably decline this year under President Donald Trump, according to UBS Group AG’s wealth-management unit, which expects the currency’s impending weakness will help to benefit prices of base and precious metals.
- Freeport-McMoRan Inc., the world’s biggest publicly traded copper producer, can’t maintain its operations in Indonesia unless the government reinstates its ability to export semi-processed metal, Chief Executive Officer Richard Adkerson said.
- Active asset managers may get an opportunity to show their mettle as correlations between individual stocks drop to levels not seen since 2007. Still, while active U.S. equity-fund managers did better in the seven years before the financial crisis, when correlations were lower, more than half failed to beat the benchmark.
- Johnson & Johnson agreed to buy Actelion Ltd. for $30 billion and spin off the Swiss drug maker’s research and development operations, clinching its largest deal ever to become a leader in medicines for a rare type of high blood pressure.
- Honeywell International Inc. posted fourth-quarter profit that matched analysts’ estimates as sales tied to the oil and gas industry rebounded.
- UBS Group AG said clients pulled a net 15.2 billion francs ($15.2 billion) in the final three months of last year, and margins at its wealth management business declined for a third straight quarter, even as rising stock markets and higher interest rates in the U.S. lifted earnings.
- China’s escalating crackdown on capital outflows is sending shudders through property markets around the world. Less than a month after China announced fresh curbs on overseas payments, anecdotal reports from realtors, homeowners and developers suggest the restrictions are already weighing on the world’s biggest real estate buying spree.
- Unilever shares fell after saying it will get off to a slow start in 2017, casting gloom over the European consumer-staples industry as the sector’s earnings season kicks off.
- Tesco Plc agreed to buy Booker Group Plc for about 3.7 billion pounds ($4.6 billion), pooling the U.K.’s biggest supermarket chain with the No. 1 food wholesaler and gaining access to the fast-growing market to supply restaurants and hotels.
- BOJ unexpectedly increased target amount for 5-to-10 year JGBs at its outright purchase operations Friday, signaling it wants to cap recent rise in 10-year yields.
*All sources from Bloomberg unless otherwise specified