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Daily Markets Update, 6 November

 

 

 

 

  • Global Stocks Drift Lower
  • US Stocks slightly higher
  • Nasdaq: Megadeal in chip sector
  •  Saudi anti graft probe boost Oil
  • Paradise Papers leak reveals secrets of the world elite’s hidden wealth
  • Commodities rise with steel, gold and copper all higher

 

 

A potential $103-billion megadeal in the chip sector lifted the tech-heavy Nasdaq on Monday but the S&P and the Dow Industrials remained flat.

Broadcom (AVGO.O) offered to buy the smartphone chip supplier Qualcomm in what could be the biggest merger in the tech sector.

Investors also kept an eye on President Trump’s comments on North Korea’s nuclear missile program and trade during his 12-day tour to Asia.

Stocks fluctuated and bonds advanced, while the euro and dollar slipped.

 

Oil prices are now up 3% since Thursday’s close as Saudi Arabia arrest potential rivals of crown prince and “modernizer” Mohammed bin Salman . Saturday night which left more than sixty Saudi royals and other elites in detention, including the former head of the country’s National Guard.

Saudi purges rattled investors.

Oil markets seem to be interpreting the arrests as a sign of the crown prince’s strength, and that makes it more likely the initial public offering of Saudi Aramco—his pet policy—will go ahead.

 Brent crude rose above $62/bbl for the first time in over two years.

U.S. stocks opened slightly lower. The Stoxx Europe 600 Index swung between gains and losses, even as a European purchasing managers index indicated strong momentum at the start of the fourth quarter.

 

BBC: Paradise Papers: Wilbur Ross says ‘nothing improper’ about Russia links

Donald Trump’s commerce secretary says there is “nothing improper” about his business links to Russian figures who are currently under US sanctions.

Wilbur Ross was accused of misleading senators after leaked documents showed his interests in a firm in which some shareholders have ties to the Kremlin.

He told the BBC that the US had not sanctioned the company, Sibur, so “there’s nothing wrong with that”.

Graphic showing who is hiding their cash

Mr Ross also denied he had failed to disclose the information.

Tax haven secrets of ultra-rich exposed : A huge new leak of financial documents has revealed how the powerful and ultra-wealthy, including the Queen’s private estate, secretly invest vast amounts of cash in offshore tax havens.

The source this time is Appleby, an offshore law firm that relies on global tax havens such as the Isle of Man – more than 13 million documents were leaked to the Süddeutsche Zeitung.

 

Stocks markets hit fresh highs. Global equities now worth $92.4tn, equals to 120% of global GDP,  Still the Uber rich get on with  off shore dark money.

Some important Events this week :

  • The European Commission’s chief Brexit negotiator Michel Barnier and U.K. Brexit Secretary David Davis resume talks.
  • Earnings season continues with announcements from Toyota Motor Corp., BMW AG, Walt Disney Co., Adidas AG, and Siemens AG. European financial companies set to report include Intesa Sanpaolo SpA, Banca Monte dei Paschi di Siena SpA,Credit Agricole SA, Allianz SE and Zurich Insurance Group AG.
  • Donald Trump continues on his first official trip to Asia as president, accompanied by Secretary of State Rex Tillerson and a group of U.S. business leaders.
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Main moves in markets from Bloomberg

Stocks

  • The S&P 500 Index was essentially unchanged at 2,587.91 at 9:42 a.m. in New York.
  • The Stoxx Europe 600 Index climbed 0.1 percent.
  • The U.K.’s FTSE 100 Index gained less than 0.05 percent to the highest on record.
  • Germany’s DAX Index fell 0.1 percent.
  • Japan’s Nikkei 225 Stock Average rose less than 0.1 percent to the highest since June 1996.
  • The MSCI Asia Pacific Index increased less than 0.1 percent.
  • The MSCI Emerging Market Index increased 0.3 percent.

Currencies

  • The Bloomberg Dollar Spot Index was essentially unchanged.
  • The euro fell 0.1 percent to $1.1595, the weakest in almost 16 weeks.
  • The British pound climbed 0.2 percent to $1.3109.
  • The Japanese yen dipped less than 0.05 percent to 114.10 per dollar.

Bonds

  • The yield on 10-year Treasuries declined one basis point to 2.327 percent, the lowest in more than two weeks.
  • Germany’s 10-year yield fell three basis points to 0.336 percent, the lowest in almost two months.
  • Britain’s 10-year yield declined two basis points to 1.246 percent, the lowest in more than seven weeks.
  • Japan’s 10-year yield decreased three basis points to 0.024 percent, the lowest in almost eight weeks.

Commodities

  • West Texas Intermediate crude gained 0.6 percent to $55.96 a barrel, the highest in about nine months.
  • Gold increased 0.1 percent to $1,271.55 an ounce.
  • Copper rose 1.1 percent to $3.15 a pound, the highest in more than a week.

 

Stocks News

Gun stocks will be on watch this morning as Democrats renew their calls for reform following the deadliest church shooting in American history. Dressed in black tactical gear and armed with an assault rifle, Devin Patrick Kelley shot dead 26 people and wounded about 20 others at the First Baptist Church of Sutherland Springs, TX on Sunday. The suspect was then killed during a high speed car chase. Related tickers: AOBC, RGR, CAB, SPWH, VSTO, OLN

Billionaire businessman Len Blavatnik is looking to buy an up-to-$3B stake in Teva (NYSE:TEVA), whose stock price hit a 17-year low last week after the drugmaker cut its annual profit forecast. The company has a $12.3B market cap. According to Israeli media reports, the investment could either be done through a private stock listing, which would help Teva deal with its nearly $35B debt burden, or the shares could be bought from Allergan (NYSE:AGN).

Following months of talks, Sprint (NYSE:S) -7.1% premarket after the company ended merger discussions with T-Mobile (NASDAQ:TMUS), stating it couldn’t reach an agreement on pricing and governance terms. SoftBank (OTCPK:SFTBY) is now looking to increase its stake in Sprint, but won’t cross the 85% threshold that would make its U.S. carrier a candidate for delisting. Sprint has also set a deal with Altice USA (NYSE:ATUS) to combine on a mobile virtual network operator.

Competition laws will permit Amazon (NASDAQ:AMZN) to undercut local businesses with loss-making prices when it opens for business in Australia, which is expected to happen later this month. “If you open a store in a new town and you set a common price point, you are going to lose money initially if you don’t have scale,” said ACCC Chairman Rod Sims. “Eventually, if you get your business plan right, you will make that price point, that is in no way illegal.”

The industry is changing… J.C. Penney (NYSE:JCP) will no longer have a chief merchandising officer, once one of the most powerful jobs in retail, as John Tighe leaves the company and won’t be replaced. It comes after J.C. Penney saw its shares drop to an all-time low last month after slashing its forecasts for 2017. The firm has also watched its shares drop 88% over the past five years.

A planned $1B Apple data center is facing uncertainty after Irish Prime Minister Leo Varadkar said CEO Tim Cook would no longer commit to it, adding that Dublin would do whatever necessary to get it built. The country relies on foreign multinational companies like Apple (NASDAQ:AAPL) for the creation of one in every 10 jobs across the economy and sees major investments as a means of securing their presence in Ireland.

Halting production work on House of Cards earlier last week, Netflix (NASDAQ:NFLX) has now moved to sever all ties with Kevin Spacey following claims of sexual misconduct against one of its biggest stars. Spacey is among several big names in the entertainment business to be accused of sexual harassment by people coming forward in the wake of allegations against movie producer Harvey Weinstein.

Ford is gearing up to launch a Chariot bus network in London, gatecrashing the capital’s crowded transport market and establishing a new rival to UBER. The move, which still has to gain approval from TfL, comes just weeks after Ford’s (NYSE:F) San Francisco service was briefly suspended by California regulators for inspection failures. Chariot also operates in three other cities: New York, Austin and Seattle.

Resurrection? United Continental (NYSE:UAL) is considering replacing widebody planes with new 767 passenger jets, WSJ reports. Boeing (NYSE:BA) stopped making the passenger model three years ago but is now looking at ways to restart production of the plane to meet emerging demand from carriers seeking to replace aging airliners in the next several years.

Rebuffed by American Airlines (NASDAQ:AAL), Qatar Airways has broadened its global reach by purchasing a 9.61% stake in Cathay Pacific (OTCPK:CPCAY). For the state-owned carrier, its first major stake in an Asian airline will allow it to boost its global influence and potentially increase traffic through its Doha hub, amid the worst political crisis in years among Gulf Arab states.

HSBC has pledged to provide $100B in financing and investment by 2025 to help combat climate change, facilitating financial flows to help boost support for clean energy and lower carbon technologies. “This will involve direct lending, bonds and project finance, alongside new products in asset management,” said an HSBC spokesman.

A consortium including BP, Royal Dutch Shell (RDS.A, RDS.B) and Statoil (NYSE:STO) is developing a blockchain-based digital platform for energy commodities trading that’s expected to take off by the end of 2018. “Ideally, it would help to eliminate any confusion over ownership of a cargo and potentially help to make managing risk more exact if there are accurate timestamps to each part of the trade,” said Edward Bell, commodities analyst at Emirates NBD.

Goldman Sachs’s asset management division is likely nursing a multimillion-dollar paper loss on a controversial Venezuelan bond purchase it made this summer, FT reports. With the country now seeking to restructure all its foreign debt, the PDVSA bond is now trading at $0.25 on the dollar, down from $0.29 at the start of last week, and $0.31 from the time of Goldman’s (NYSE:GS) purchase.

“Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!” President Trump tweeted on Saturday. According to the WSJ, when Crown Prince Mohammed bin Salman announced plans last year for a stock offering of Aramco (Private:ARMCO), he said he wanted it listed on the NYSE (NYSE:ICE), but since then outside advisers have warned the move could open up the company to shareholder lawsuits.

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