September 29th, 2017


Daily Market Commentary


Canadian Headlines

  • Canadian stocks eked out a small gain and closed at the highest since mid-May, helped by strong earnings at BlackBerry Ltd. and rising copper prices. The S&P/TSX Composite Index added 9 points or 0.1 percent to 15,618.25. Technology saw the largest gains, up 0.8 percent as BlackBerry jumped 13 percent, the most since April.
  • U.S. officials in Nafta negotiations are making proposals on battleground issues that Canada and Mexico would never agree to, intensifying doubts of reaching compromise on their tight timeline, according to three officials familiar with the talks. U.S. proposals on government procurement, textiles and fresh produce are seen by the Canadian and Mexican governments as red-line issues with little or no hope of agreement, said the officials, who spoke on the condition of anonymity because the discussions are private.



World Headlines

  • European stocks are little changed on the last day of a quarter of gains as investors assess the outlook for interest rates and the dollar’s advance against the euro eases the burden on Europe’s exporters. The Stoxx Europe 600 Index rises less than 0.1%. Gains in miners and real estate shares offset a drop in travel companies and banks.
  • The dollar looked poised to finish its best weekly gain of the year with a whimper, fluctuating as investors continued to weigh the prospects for tax cuts in the world’s largest economy. Equities in the region drifted even as they headed for the best month this year, after stocks in Asia had earlier followed the S&P 500 higher.
  • Asian equities rebounded from early losses, with the regional benchmark poised for its longest string of monthly gains in a decade even as investors unwind from some positions and China and South Korea prepare for week-long holidays. The MSCI Asia Pacific Index rose 0.4 percent to 161.17, as of 4:41 p.m. in Hong Kong with about six stocks rising for every four that fell. The measure hasn’t gained for nine straight months since the end of July 2007.
  • Oil was poised for its biggest quarterly gain in more than a year on forecasts for rising demand and Turkey’s threat to halt Kurdish exports through its territory after the region voted for independence from Iraq. Futures were little changed in New York, up more than 9 percent in September. OPEC and the International Energy Agency this month boosted demand forecasts, signaling the surplus that has weighed on prices may shrink further.
  • Gold is on course for the biggest monthly decline this year as U.S. dollar rebounds amid optimism that President Donald Trump’s tax reform plans will boost economic growth.
  • Iron ore’s become the punch bag of the commodities world. The raw material is down 20 percent in September, putting it on course for the first back-to-back quarterly loss since 2015, and there’s rising concern that the final three months of the year may bring further declines.
  • Volkswagen AG will take a surprise charge of about 2.5 billion euros ($3 billion) in the third quarter as plans to buy back or retrofit tainted U.S. diesel cars proves more complex than expected, bringing total damages from the two-year-old scandal to over 25 billion euros.
  • Mark Carney has yet to see anything that would dissuade him from supporting a Bank of England interest-rate increase in the next few months. It’s the latest hint that policy tightening is on the way, just weeks after the governor and his colleagues on the Monetary Policy Committee said that signs of a pickup in wages and lessening slack in the economy could soon justify the first rate hike in a decade.
  • The six largest U.S. banks could see net income rise $6.4 billion, or 7 percent, if President Donald Trump and Republicans in Congress can push through their proposed corporate tax rate cut. Banks stand to benefit more than other industries because they typically have fewer deductions. The top six firms — JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley — paid an average of 26 percent in federal taxes last year, almost twice the average for nonfinancial companies.
  • Ryanair Holdings Plc must make a public statement by 5 p.m. London time Friday detailing compensation options available to people affected by its cancellation of more than 20,000 flights, the U.K. airline regulator said. The Civil Aviation Authority, which began an enforcement action this week accusing Ryanair of “persistently misleading” some 715,000 passengers about their legal entitlements, ordered the Dublin-based carrier to make clear all alternatives in a press release.
  • SoftBank Group Corp. founder Masayoshi Son has made a name for himself building a telecommunications and technology empire. He’s now planning an expansion in asset management. The Japanese firm is eyeing further acquisitions in the financial sector in order to potentially create a $300 billion asset management arm that would also house its $93 billion Vision Fund for technology investments, according to people familiar with the matter.
  • Bayer AG sold another 1 billion euros ($1.2 billion) of shares in Covestro AG and said it no longer controls the German chemical company that it listed on the Frankfurt stock exchange two years ago.
  • John Cryan is facing increasing skepticism he can revive growth at Deutsche Bank AG as the lender struggles to win back clients and market share after last year’s slump. Deutsche Bank had its long-term credit grade cut one level by Fitch Ratings late Thursday, which said the lender will take longer to revive growth under a turnaround plan unveiled in March.
  • Netcare Ltd. agreed to buy out partners in U.K. unit BMI Healthcare to take full control of the business and increase exposure outside its home market of South Africa. Apax Partners LLP will sell its 32 percent stake in BMI for 54 million Netcare shares, the Johannesburg-based company said in a statement on Thursday.
  • Ethereum and bitcoin dropped after South Korea banned domestic initial coin offerings and margin trading in cryptocurrencies. The Financial Services Commission in Seoul said all forms of ICOs are prohibited in the country, including projects that share profits, rights, dividends, and other “coin-style” offerings, according to a statement.
  • American Airlines Group Inc. will add more seats to some of its single-aisle jetliners as part an effort to boost sales by $1.4 billion in the next four years. It’s also targeting $1 billion in cost savings. The carrier’s Boeing Co. 737-800 jets will be revamped to fit 12 more passengers while the Airbus SE A321 planes will carry as many as nine more, according to a presentation Thursday.
  • Uber Technologies Inc. Chief Executive Officer Dara Khosrowshahi is flying into London next week for a diplomatic mission with city regulators in hopes of negotiating a deal that prevents the ride-hailing service from being banned in its largest European market. With Uber’s new CEO grappling with a host of challenges, the visit on Oct. 3 shows how damaging the ban could be to Uber’s business. The British capital is one of the company’s most successful markets, with about 40,000 drivers and 3.5 million people using the app at least once every 90 days.
  • Inc. is searching for office space in Dublin that could hold as many as 800 people, according to two people with knowledge of the matter. The e-commerce giant is looking for as much as 7,432 square meters (80,000 square feet) of office space in the Irish capital, according to the people, who asked not to be named because the information is private. Amazon declined to comment.
  • Invesco Ltd. agreed to buy exchange-traded funds run by Guggenheim Partners for $1.2 billion, the two firms said in a statement Thursday. The agreement for the 79 funds with about $36.7 billion in total assets will consist of a cash payment and is expected to close in the second quarter of next year.
  • Bain Capital’s consortium plans to take Toshiba Corp.’s flash-memory unit public two to three years after closing its 2 trillion yen ($18 billion) acquisition of the business, according to people familiar with the matter. The precise timing of the initial public offering will depend on the unit’s finances and market conditions and could change substantially, said the people, asking not to be identified because the matter is private.
  • A key opponent of 21st Century Fox Inc.’s 11.7 billion pound ($15.7 billion) bid for Sky Plc is seeking a fresh investigation into whether the pay-TV provider would remain fit to hold a broadcasting license under the control of media billionaire Rupert Murdoch.
  • The clock has started ticking on billionaire Elon Musk’s challenge to build the world’s largest lithium-ion battery system in the Australian outback. Against a backdrop of wind turbines 150 miles (241 kilometers) north of Adelaide, the Tesla Inc. chief executive announced a contract for the project had been signed with South Australia’s power distributor, triggering a 100-day self-imposed deadline to install the electricity storage system.



*All sources from Bloomberg unless otherwise specified