May 16th, 2018


Daily Market Commentary

Canadian Headlines

  • Canadian stocks eked out an eighth consecutive gain as Air Canada and pot producer Aphria Inc. helped to propel the health care and industrial sectors higher.
  • Canada’s finance minister is set to give his most detailed look at talks with Kinder Morgan Inc. over its Trans Mountain oil pipeline. Bill Morneau will hold a news conference Wednesday in Ottawa at 9 a.m. to “update Canadians on the ongoing discussions regarding the Trans Mountain Expansion project,” according to a media advisory issued late Tuesday.
  • Prime Minister Justin Trudeau has reportedly told President Donald Trump that a NAFTA agreement is imminently within reach as long as some controversial demands are set aside.



World Headlines

  • U.S. equity futures steadied alongside European stocks as global markets regained some composure following a hectic Tuesday session. The dollar rose a fourth day as concerns surrounding Italy weighed on the euro, and Treasury yields edged lower after their spike a day earlier.
  • Asian stocks were little changed, recovering from an earlier drop, as European peers opened higher and U.S. Treasury yields retreated from a spike a day earlier.
  • Oil traded near $71 a barrel as rising stockpiles and signs of slower demand growth countered concerns Iranian supplies will soon be curbed by sanctions.
  • American Petroleum Institute reported Tuesday that U.S. crude supplies rose by nearly 4.9 million barrels for the week ended May 11, according to sources. The API data showed a decline of 3.4 million barrels in gasoline stockpiles, while inventories of distillates edged down by 768,000 barrels, sources said.
  • Gold trades little changed, after falling to the lowest level this year on Tuesday as 10-year Treasury yields rise to highest since 2011.
  • China’s thirst for energy is roiling markets in Europe, jolting the outlook for coal-hungry utilities as they struggle to cope with tighter pollution and environmental rules. Coal for delivery next year in Northwest Europe touched a record $90.65 a ton on Tuesday, a fifth consecutive day of gains that together with higher costs on carbon emissions lifted the price of electricity in the process.
  • Japanese GDP recorded its first contraction in nine quarters, which in the near term could take some of the wind out of inflation’s sails. Weak business spending, residential investment and stagnant private consumption were mainly to blame.
  • AstraZeneca Plc is considering a sale of the U.S. rights for its popular cholesterol treatment Crestor as the U.K. drugmaker continues to raise cash by divesting lower-growth products with expired patents, people familiar with the matter said.
  • The European Union set out to identify “practical solutions” for salvaging the Iran nuclear accord within weeks, as the bloc strives to contain the fallout from President Donald Trump’s decision to pull the plug from the landmark deal.
  • Starbucks Corp. unveiled a bold plan to more than triple revenue in China over the next five years, at a time when other American corporates worry that simmering trade tensions may disrupt their businesses in the world’s second-largest economy.
  • Microsoft Corp. is planning to release a line of lower-cost Surface tablets as soon as the second half of 2018, seeking a hit in a market for cheaper devices that Apple Inc. dominates with the iPad, according to people familiar with the matter.
  • Institutional investors haven’t been this skeptical on Apple Inc. since at least the financial crisis. They reduced their holdings in the iPhone maker by about 153 million shares in the first three months of the year, an analysis of 13F filings showed.
  • Novartis AG’s top lawyer became the first executive to take the fall for the controversial $1.2 million in payments he helped arrange to Donald Trump’s attorney, as the drug-maker tries to contain the furor from last week’s revelation.
  • North Korea threatened to walk away from its meeting with President Donald Trump next month if the U.S. made a “one-sided demand” for the regime to surrender its nuclear weapons.
  • HSBC Holdings Plc’s Saudi Arabia unit offered to pay a 29 percent premium to acquire Royal Bank of Scotland Group Plc’s local venture in a $5 billion stock deal.
  • Tencent Holdings Ltd. posted a quarterly profit that exceeded estimates, bolstered by mobile game blockbusters like PlayerUnknown’s Battlegrounds as users on China’s most popular social network surpassed a billion for the first time.
  • Paddy Power Betfair Plc is in talks to merge its U.S. unit with closely held website FanDuel as the Irish bookmaker positions itself for expanded sports betting in the U.S. following a Supreme Court ruling this week.



*All sources from Bloomberg unless otherwise specified