March 7th, 2017

Daily Market Commentary




Economic News:

  • The Canadian economy posted a trade surplus of $810 million in January, above estimates.
  • The Redbook Index, which measures same-store sales growth of US general merchandising companies, was reportedly down 0.8% and up 1% in month-over-month and year-over-year terms, respectively.
  • Eurozone GDP was up 0.4% and 1.7% in quarter-over-quarter and year-over-year terms, respectively. Both figures were in line with estimates.


  • Canadian stocks rose for a second day, reversing earlier losses, as energy shares led a rebound amid an analyst comment that the industry may have fallen too far too fast. Energy, telecom and financial shares rose at least 0.5 percent, offsetting losses among materials and health-care companies.
  • Canadian pension fund manager Caisse de Depot et Placement du Quebec is among suitors vying to buy a stake in Kotak Mahindra Bank Ltd. being sold by India’s richest banker, people with knowledge of the matter said. The stake Kotak needs to sell is worth about 54 billion rupees ($810 million) based on Tuesday’s stock price.
  • Canadian drugmaker Valeant is looking to pull off its most daring move yet to rein in a $30 billion debt load. Less than a year after senior lenders agreed to relax terms on Valeant’s credit agreement, it’s now asking those creditors to drop most of the restrictions altogether and for more time to repay. Creditors would get a small fee for that, and a higher rate for the longer maturities.

United States:

  • Republicans unveiled their long-awaited legislation to repeal and replace the Affordable Care Act, proposing to phase out key parts of the law over several years as they try to break through a stalemate between moderates and conservatives in their party. Called the American Health Care Act, House Republicans’ proposal includes a refundable, age-based tax credit to help people buy insurance.
  • Shares of U.S. companies less affected by economic cycles have more room to rebound in the next three to six months, according to BCA Research. The FTSE Defensive Index has climbed as much as 5.8 percent against the FTSE Cyclical Index since Dec. 8, when the ratio between them dropped to the lowest level since they were introduced in 2013.
  • After a euphoric market debut, Snap Inc. shares dropped for the first time in three days and fell below the opening price of $24 on their first day of public trading after analysts began weighing in with their thoughts on the company’s true valuation.


  • European stocks were little changed, as investors assessed the last batch of earnings results this season while focus shifts to the European Central Bank’s meeting on Thursday. Mining shares rose the most, bouncing back from a three-day drop, while PSA Group led automakers higher.
  • Electricite de France SA, Europe’s biggest power producer, began a sale of 4 billion euros ($4.2 billion) of shares to bolster its balance sheet and help fund a planned nuclear plant in southwest England.
  • Asian stocks rose a second day as investors looked beyond a near-certain U.S. interest-rate increase this month, and energy companies advanced on the likelihood of further output cuts by OPEC amid global oversupply.
  • China’s foreign-currency reserves unexpectedly halted a seven-month losing streak, rising in February amid tighter controls on capital outflows and a rally in the yuan. The stockpile increased by $6.9 billion to $3.005 trillion last month, the People’s Bank of China said Tuesday.
  •  China is taking steps to support its stock market during this week’s National People’s Congress, including a ban on net share sales by some large mutual funds, according to people familiar with the matter. Regulators ordered the funds to avoid net selling during the annual meeting of Chinese lawmakers in Beijing, which runs through the middle of next week.


*All sources from Bloomberg unless otherwise specified