July 14th, 2017


Daily Market Commentary



Canadian Headlines

  • Billionaire Len Blavatnik’s year-old quest to build the Netflix of sports will take its first step into North America with the introduction of his DAZN streaming platform in Canada, according to people familiar with the matter. DAZN, backed by Blavatnik’s Access Industries Holdings LLC, may announce the Canadian expansion this month, said the people, who asked not to be identified discussing private plans.
  • OPEC producers are finding that shale oil drillers aren’t their only adversaries in their battle to drain a three-year crude glut. As oil rigs in the U.S. jumped 45 percent this year, north of the border, oil-sands companies including Devon Energy Corp., Suncor Energy Inc. and Cenovus Energy Inc. have ramped up operations as well. Their thermal production sites are running as much as 30 percent above capacity this year, squeezing barrels from existing production sites to maximize revenue.



World Headlines

  • European stocks held on to a weekly advance spurred by optimism over Federal Reserve monetary policy, while investors awaited U.S. bank earnings. The benchmark has climbed 1.6 percent this week, the most since early May, after comments by Fed Chair Janet Yellen spurred expectations the central bank won’t rush to tighten policy.
  • U.S. stock index futures held steady as investors awaited the release of June inflation figures and earnings from Wall Street banks. S&P 500 contracts expiring in September slipped less than 0.1 percent at 6:34 a.m. in New York. That signals the underlying benchmark may continue to trade within 0.7 percent of its record-high close, where it has been during the past two days.
  • Asian equities were set for their biggest weekly jump in four months amid expectations that a global economic recovery is intact, with the benchmark regional gauge on course for its longest string of gains since April.
  • Oil is set to rise this week, 2017 demand is seen growing more than previously expected, and U.S. stockpiles are declining, yet prices are still only about $1 higher than when OPEC pledged to curb output late last year.
  • Gold heads for first weekly gain in three as investors digest Federal Reserve Chair Janet Yellen’s two-day testimony, and the inflation outlook ahead of U.S. data due later Friday.
  • The Bank of Japan may be listening to the market and allowing more room for shorter-maturity bond yields to rise as long as the benchmark10-year stays in its preferred range. The central bank held a fixed-rate operation to cap the 10-year yield last Friday when it climbed to a five-month high. It decided against conducting a similar operation for the five year on Monday when the yield rose to the highest since January 2016.
  • The U.K. minister evaluating 21st Century Fox Inc.’s purchase of Sky Plc may not make a decision on the next step in the process before Parliament goes on recess next week, according to a spokesman, a delay that would potentially push a final ruling to March 2018. Culture Secretary Karen Bradley needs time to evaluate public feedback on the 11.7 billion-pound ($15.2 billion) deal before making a final decision on whether to send it to the Competition & Markets Authority.
  • The world’s biggest oil producers are starting to take electric vehicles seriously as a long-term threat. OPEC quintupled its forecast for sales of plug-in EVs, and oil producers fromExxon Mobil Corp. to BP Plc also revised up their outlooks in the past year, according to a study by Bloomberg New Energy Finance released on Friday. The London-based researcher expects those cars to reduce oil demand 8 million barrels by 2040, more than the current combined production of Iran and Iraq.
  • India is considering tracking digital currencies like bitcoin through the central bank and capital markets regulator along with intelligence agencies to monitor money laundering and terrorist financing, people with the knowledge of the matter said. A federal government panel is examining options such as banning, regulating or limited intervention for virtual currencies in India, an area that’s currently neither regulated nor recognized by the government, said the people who asked not to be identified as the discussions are not public.
  • The U.K. acknowledged for the first time on paper that it will have to pay money to the European Union when it withdraws from the bloc, seeking to damp down a row over the country’s so-called Brexit bill.
  • Altice NV agreed to buy Prisa’s Portuguese broadcasting unit Media Capital in a deal that helps billionaire Patrick Drahi’s investment company expand its footprint in the southern European country. Altice will acquire Prisa’s almost 95 percent stake in Media Capital for 440 million euros ($502 million) including debt, Madrid-based Prisa said in a statement Friday, confirming an earlier Bloomberg News report. Prisa said the sale of Media Capital will result in a consolidated accounting loss of about 69 million euros.
  • European car demand rose at a slower pace in June as fewer selling days in Germany and Brexit-related concerns in the U.K. weighed on a peaking vehicle market. Industrywide registrations increased 2.1 percent from a year earlier to 1.54 million vehicles last month, with Toyota and Fiat models posting the biggest gains, the European Automobile Manufacturers’ Association, or ACEA, said Friday in a statement.
  • The eclipse set to darken skies next month threatens to sideline solar farms and rooftop panels in a wide swath of the U.S., wiping out enough power generation to supply about 7 million homes. This rare event, during which the moon will completely obscure the sun, will cast a shadow along a 70-mile-wide (113-kilometer) corridor stretching from Oregon to South Carolina on Aug. 21.
  • Credit Suisse Group AG has started a new company to maintain critical operations in the event of insolvency, following UBS Group AG in fulfilling a regulatory requirement designed to prevent another banking crisis. Credit Suisse Services AG went live this month, according to Switzerland’s official registry. About 1,700 people have been transferred to the subsidiary, similar to one registered in the U.S. last year and that started operations in January as part of the bank’s emergency plan there.
  • AT&T Inc. is planning major organizational changes to follow the $85.4 billion acquisition of Time Warner Inc., including a redefined role for Chief Executive Officer Randall Stephenson, as the telecommunications giant morphs into a media company.
  • A Chinese consortium agreed to pay S$16 billion ($11.6 billion) for Global Logistic Properties Ltd., the warehouse operator backed by Singapore’s sovereign wealth fund, in Asia’s biggest buyout. GLP accepted the takeover offer from a management-backed group that includes private equity firms Hillhouse Capital Management and Hopu Investment Management. The group, which also includes founder Ming Mei’s SMG, Bank of China Group Investment and a unit of China Vanke Co., offered S$3.38 a share, GLP said in a statement to Singapore’s stock exchange.
  • U.S. Secretary of State Rex Tillerson said a dispute between a Saudi Arabian-led bloc and Qatar may last “quite a while” as the two sides still refuse to speak to each other directly and are no closer to resolving the key demands made after the crisis started.
  • Senate Majority Leader Mitch McConnell’s latest health care draft almost certainly is headed to rewrite again to find a way to appease the handful of Republican moderates worried about Medicaid cuts in their states. The bill already has drawn two firm noes– Rand Paul of Kentucky and Susan Collins of Maine — leaving McConnell no margin for losing Republican support to get the 50 votes he needs as senators await a Congressional Budget Office analysis expected early next week.
  • A Japanese group’s plans to explore for Russian oil with state-run Rosneft PJSC have been stymied by U.S. intervention over sanctions, according to people familiar with the matter. Washington’s objection to the Japanese project to explore for oil in the ocean off Russia’s Far East shows the U.S. Treasury is maintaining a firm line on sanctions, even as some international companies press on with Russian energy deals.
  • EasyJet Plc will create a new airline based in Vienna that will shield its routes within the European Union from any fallout from Britain’s negotiations to exit the bloc. The approval process for an air operator certificate that EasyJet filed with Austria’s aviation regulator is “now well advanced,” and the Luton, England-based company expects clearance in the near future, the carrier said in a statement Friday.
  • Las Vegas will be getting its first new casino on the Strip in a decade. And the only casino currently operating in New York City, at the Aqueduct Racetrack in Queens, is being upgraded to include a 400-room hotel with a celebrity-chef restaurant. They’re both part of the huge U.S. expansion plans of the Genting Group, a Malaysian conglomerate that’s seeking to move beyond its Asian roots — not just in New York and Las Vegas, but in Miami and suburban Massachusetts as well.


*All sources from Bloomberg unless otherwise specified