May 15th, 2018


Daily Market Commentary


Canadian Headlines

  • Canadian stocks gained for a seventh day as auto supplier Magna International Inc. rose to a record high and cannabis producer Canopy Growth Corp. planned to dual-list on the New York Stock Exchange.
  • Government housing regulations are a key force behind rising prices for new homes in Canada’s costliest cities, according to policy-research group C.D. Howe Institute. Zoning rules, delays on permit approvals and municipal development fees all contributed to a steep increase in prices of single-family detached houses across Canada, C.D. Howe said in a report Tuesday.
  • DHX Media Ltd. said Monday the sale of nearly half of its stake in the Peanuts entertainment business to a Sony Corp. division for $237 million in cash will help reduce the Canadian animation company’s debt load and improve its operating results.
  • Countries like Spain, Italy, and Colombia are likely the next growth opportunities for Canadian cannabis companies after a flurry of consolidation at home. The marijuana industry saw its largest deal to date on Monday with Aurora Cannabis Inc. agreeing to acquire MedReleaf Corp. for C$2.9 billion ($2.27 billion).



World Headlines

  • European stocks opened lower as investors weighed the progress of trade talks between China and the U.S. and as telecom shares retreated led by Vodafone Group.
  • Asian shares fell on Tuesday, with a regional benchmark set for its first day of losses in four, after U.S. 10-year Treasury yields touched 3 percent and data from China showed consumers spent less in retail outlets than economists expected last month.
  • U.S. stock index-futures slipped amid fresh worries over the pace of global growth and ahead of Chinese Vice Premier Liu He’s U.S. visit. The 10-year Treasury yield rose above the 3% threshold again.
  • Oil held near $71 a barrel on heightened political risks in the Middle East following unrest in Gaza and the return of sanctions against Iran.
  • Gold falls a 3rd day as 10-year Treasury yields hold above 3%, weighing on non-interest bearing precious metals and countering uncertainties around global trade relations and tensions in Middle East.
  • Aluminum falls in London after data showed Chinese production rose to a 10-month high in April. Copper also comes under pressure after signs of slower investment in Chinese infrastructure and property markets
  • Nafta negotiators from the U.S., Canada and Mexico are poised to miss the deadline this week cited by House Speaker Paul Ryan, the latest blown marker for reworking the 24-year-old deal.
  • Economic growth slowed across Europe at the start of the year, with Germany seeing its pace of expansion cut in half amid weaker trade. The 0.3 percent increase in Europe’s largest economy was softer than forecast and the weakest in more than a year. Dutch and Portuguese growth also cooled more than expected in the first quarter, while a similar trend was seen across central and eastern Europe.
  • China’s economic momentum broadly held up in April with industrial production exceeding forecasts, though slowing investment signaled a moderation in the coming months.
  • Britons got their first real pay increase in more than a year in the first quarter as wage growth overtook the rate of inflation. Average earnings excluding bonuses rose 2.9 percent from a year earlier, the fastest pace since August 2015, the Office for National Statistics said Tuesday.
  • Canaan Creative, the world’s second-biggest maker of bitcoin mining hardware, has submitted an application for a Hong Kong initial public offering that could raise about $1 billion, people with knowledge of the matter said.
  • Home Depot Inc.’s lackluster results last quarter are adding to concerns the U.S. housing market is cooling off. Revenue and comparable-store sales at the world’s largest home-improvement retailer missed analysts’ estimates, although profit beat expectations for the 16th-straight quarter.
  • Wall Street is poised to get a big reprieve from the Volcker Rule, as U.S. agencies prepare to scrap a restrictive presumption that most short-term trades violate the post-crisis regulation, three people with knowledge of the matter said.
  • Cars that drive themselves are finding the clearest paths to showrooms in the U.K., Germany, South Korea and Singapore, where governments have enacted legislation allowing autonomous vehicles to be tested on public roads. And China’s not far behind. Those nations are outpacing the U.S., where the absence of national legislation to clarify a “checkerboard of state rules” hampers the deployment of driverless cars, Bloomberg New Energy Finance said in a report.
  • The end to a federal ban on U.S. sports betting offers major potential for European gambling operators such as William Hill Plcand Paddy Power Betfair Plc, though the scale and timing of the opportunity remains to be seen, according to analysts.

*All sources from Bloomberg unless otherwise specified