May 21st, 2016

Daily Market Commentary

 

ECONOMIC NEWS:

  • New Home Sales in the US were up 619K in month-over-month terms, above estimates.
  • The Redbook Index, which measures same-store sales growth of US General Merchandising companies, was reportedly up 0.4% and 2.1% in month-over-month and year-over-year terms, respectively.

Commodities:

  • Gold fell for a fifth day, the longest run of losses in six months, as speculation that the Federal Reserve will raise interest rates as early as next month strengthened the dollar and dented the metal’s allure.
  • Iron ore has pivoted from boom to gloom in a few short weeks. Benchmark prices stand barely above $50 a metric ton as spectacular losses this month driven by rising supplies and a more cautious approach from mills in China have eviscerated April’s speculation-driven rally.
  • Brent crude, the global benchmark, declined for a fifth day as Canadian oil-sands producers prepared to restart operations after wildfires took more than a million barrels out of production.

Canada:

  • All of the Canadian oil-sands facilities that workers fled last week as a wildfire spread are being allowed to prepare for restart as cool, humid weather has helped contain the inferno.
  • Bank of Canada Governor Stephen Poloz can thank the U.S. Federal Reserve for making his job a little easier by cooling the loonie rally and taking expectations of an interest-rate cut off the table.

United States:

  • U.S. stock-index futures rose, indicating the S&P will rebound, before new-home sales data that may show an improving economy as investors gauge the prospects for a Federal Reserve rate increase next month.
  • The U.S. currency touched its strongest level in eight weeks against the euro, while Australia’s dollar and the Malaysia’s ringgit were among the biggest losers, as the prospect of higher interest rates boosted demand for the greenback
  • Tudor Investment Corp., one of the oldest and most expensive hedge funds, is trimming fees as the finance industry’s highest-paid money managers face a growing backlash over their lackluster performance.

 

International:

  • A drop in the euro helped boost European stocks as investors assessed the implications of a possible Federal Reserve interest rate increase as early as June.
  • Deutsche Bank AG Chief Executive Officer John Cryan said his bank has never had more capital and could easily repay its debt many times over, responding to a credit-rating cut by Moody’s Investors Service.
  • HSBC Holdings Plc, the U.K.’s biggest lender, is selling the riskiest type of bank debt about a month before a referendum that could lead to the country leaving the European Union.
  • Tencent Holdings Ltd. is in talks to buy a majority stake in gamemaker Supercell Oy from SoftBank Group Corp. , the Wall Street Journal reported.
  • Asian stocks fell, on course for the lowest closing level in almost seven weeks, as exporters in Japan were weighed down by the yen and speculation mounted the U.S. is closer to raising interest rates.
  • Toyota is recalling more than 1.5 million additional vehicles in the United States over concerns with airbag inflaters from the Japanese parts manufacturer Takata.
  • Sony Corp. forecast annual profit that fell short of estimates, hurt by costs to repair a factory that was damaged in the Kyushu earthquake, lost sales and slowing demand for smartphone components.
  • Southeast Asia’s Internet economy, spanning online shopping to games and advertising, will surge sixfold to about $200 billion in the next decade, according to joint research by Google Inc. and Temasek Holdings Pte.

*All information is taken from Bloomberg, unless otherwise noted.