July 19th, 2017
Daily Market Commentary
- Canadian stocks failed to find traction despite higher oil and gold prices, falling for a second day as the benchmark stock index was pressured by a mixed basket of financials, industrials and miners. The S&P/TSX Composite Index lost 16 points or 0.1 percent to 15,149.57. Energy stocks edged up 0.2 percent as the price of crude gained 0.8 percent, boosted by fears of a worse-than-usual hurricane season.
- Taseko Mines gets approval from Province of British Columbia to undertake a site investigation program to conduct exploratory work at New Prosperity Gold-Copper project site. Permit will allow company to gather information for the purpose of advancing mine permitting under the British Columbia Mines Act.
- The extreme weather that’s gripped the U.S. Great Plains is also threatening agricultural output in Canada as hot, dry conditions parch fields and stunt crop growth. Some fields in Canada’s southern prairies have received less than 40 percent of average rainfall since April 1, according to data from Agriculture and Agri-Food Canada. Crop conditions have deteriorated in parts of Alberta and Saskatchewan, the country’s largest growers of wheat and canola.
- AlbaCore Capital is seeking to increase its assets to more than 1 billion ($1.2 billion) euros, according to people familiar with matter. The European credit fund, which was started last year with 500 million euros from Canada’s Public Sector Pension Investment Board, plans to lock up the money it raises for five to seven years, said the people, who asked not to be identified because they’re not authorized to discuss the matter publicly.
- Stock investors are weaning themselves off reliance on the European Central Bank’s ability to put a floor on markets, pushing corporate health to center stage instead. This year, an earnings revival has been enough to lure dip buyers facing a potential shift in monetary policy. The Euro Stoxx 50 Index is up 5.9 percent in 2017 and some $23 billion have flown into funds tracking the region.
- U.S. stock-index futures were little-changed as investors awaited reports on housing starts and bank earnings. S&P 500 contracts expiring in September were almost flat at 2,460 as of 5:24 a.m. in New York after the underlying gauge closed at a record high Tuesday. Nasdaq 100 futures added 0.3 percent on Wednesday. The technology-laden benchmark has climbed eight days. Contracts on the Dow Jones Industrial Average were little-changed.
- Chinese equities traded offshore and on the mainland closed at the highest levels since 2015, with financial shares leading gains in Hong Kong and materials companies driving large caps higher onshore.
- Oil was steady amid mixed signals on U.S. crude inventories, with industry data showing supplies increased last week while government statistics were expected to indicate a decline. Futures were little changed in New York after adding 0.8 percent on Tuesday. U.S. inventories rose by 1.63 million barrels last week.
- Gold headed lower for the first time since Thursday as the euro came off a 14-month high ahead of the European Central Bank’s policy meeting Thursday.
- While European Central Bank policy makers look forward to a summer break, the institution is quietly working on stimulus plans for them to consider on their return. The ECB’s Frankfurt-based staff are examining scenarios for the future path of quantitative easing ahead of a Governing Council decision that is expected to take place in September or later, according to euro-area officials familiar with the matter.
- Dalian Wanda Group Co. and Sunac China Holdings Ltd. altered China’s biggest property deal, pulling another company, Guangzhou R&F Properties Co., into the transaction where Wanda is selling off hotels and theme parks. The twist comes nine days after a $9.3 billion deal was announced for Sunac alone to buy Wanda assets.
- Morgan Stanley reported FICC sales & trading revenue for the second quarter that matched the average analyst estimate. 2Q FICC sales & trading revenue $1.20 billion, estimate $1.20 billion. 2Q net revenue $9.50 billion, estimate $9.13 billion.
- McCormick & Co. agreed to acquire Reckitt Benckiser Group Plc’s food business for $4.2 billion, adding French’s mustard andFrank’s RedHot sauce to its lineup of spices and seasonings. The deal brings a stable of well-known condiments to Sparks, Maryland-based McCormick. For Reckitt Benckiser, unloading the products continues an overhaul that began with an expansion into baby formula through the British company’s acquisition of Mead Johnson Nutrition Co. for $16.6 billion.
- Crown Castle International Corp. agreed to buy Lightower Fiber LLC for $7.1 billion to double the reach of its fiber-optic network and help meet surging demand for high-speed data and streaming video. The cash acquisition will immediately add to profit and increase Crown Castle’s ability to pay dividends, the company said Tuesday in a statement.
- State Grid Corp. of China and China Southern Power Grid Co. are among early bidders for a stake in Chilean utility Transelec SAthat could fetch about $1 billion, according to people familiar with the matter. The Chinese state-owned firms are bidding for a 27.7 percent holding in the company being sold by Brookfield Asset Management Inc.
- Discovery Communications Inc. and Viacom Inc., two cable network owners hurt by the rise of Netflix Inc. and YouTube, have held separate talks to combine with Scripps Networks Interactive Inc., owner of HGTV and the Food Network, according to a person with knowledge of the matter. Scripps, with a market value of $8.7 billion, surged 10 percent in late trading. Shares of Discovery, the $15 billion owner of Animal Planet and TLC, also rose, while Viacom Inc., the $14.5 billion parent of Nickelodeon and MTV, was little changed.
- Apple Inc. and its Asian contract manufacturers are hitting back at Qualcomm Inc. with legal claims that try to undermine the chipmaker’s attempt to force them to pay licensing fees. Qualcomm is asking for payments massively in excess of what it would normally receive, Apple, Compal Electronics Inc., Hon Hai Precision Industry Co. and others said early Wednesday in court filings.
- Volvo AB shares fell the most in more than a year as the truck division’s profitability shrank in the second quarter amid a continuing decline in North American deliveries. Volvo dropped as much as 7.8 percent, the steepest intraday plunge since June 27, 2016, and was trading down 5.8 percent at 137.1 kronor as of 12:37 p.m. in Stockholm, valuing the Gothenburg, Sweden-based manufacturer at 292 billion kronor ($35 billion).
- Bain Capital and Cinven officially offered to buy Stada Arzneimittel AG for 5.4 billion euros ($6.2 billion), moving forward with their second attempt at acquiring the biggest independent German generic-drugs maker.
- BP Plc is considering forming a master-limited partnership and holding an initial public offering for pipeline assets located in the U.S. Assets being considered include crude, natural gas and refined-product pipelines in the Midwest and U.S. Gulf of Mexico, BP said in a filing. The potential IPO of the unit could be held in the second half of this year, if the company decides to pursue it.
- NRG Energy Inc. says buyers are hungry for the company’s renewable-energy business as the power generator looks to cut debt and sell assets under pressure from billionaire investor Paul Singer. Almost a week after the largest U.S. independent power producer disclosed that it’s looking to slim down, the company is seeing “robust engagement from a variety of potential co-sponsors or sponsors” for its clean-energy units.
- Landis+Gyr AG, the world’s largest smart electricity meter manufacturer, is set for its initial public offering on July 21, the second leading smart meter company to go public. The Swiss company commands a 26 percent share of installed meters worldwide, excluding China, in a market that looks set to grow rapidly over the next three years.
- Greece’s much anticipated return to bond markets this week has been held off partly due to a ceiling set by the International Monetary Fundon the amount of debt the country can hold, according to three officials familiar with the matter who asked not to be identified as the talks are confidential.
- Akzo Nobel NV Chief Executive Officer Ton Buechner resigned unexpectedly for health reasons amid the pressure of battling activist investor Elliott Management Corp. and the threat that rival-turned-suitor PPG Industries Inc. could return with another takeover attempt later this year.
- The London Metal Exchange is likely to adopt measures including a cut in fees and a charge for over-the-counter trades to try to quell a rebellion over costs and reverse a decline in its market share, according to two people familiar with the plans.
- A meeting of 16 nations in India on a mega Asia trade pact is happening in the shadow of elevated border tensions between India and China, a wrinkle that could further slow progress on the deal. Trade officials gathered in the southern city of Hyderabad are seeking to hammer out agreement on sticky issues like the free movement of people in the pact that takes in the world’s second and third-biggest economies — China and Japan — but does not involve the U.S.
- Electrolux AB raised its outlook for growth in North America as second-quarter profit beat estimates and Europe’s biggest maker of household appliances sold more air conditioners to U.S. customers. Demand for appliances in the Stockholm-based company’s biggest market is expected to grow by 3 percent to 4 percent this year, Electrolux said in a statement Wednesday.
*All sources from Bloomberg unless otherwise specified