Commentaires

Market Update US tsys reversing earlier losses, near upper end of overnite range after weaker July Housing Starts, big miss on Aug Phili Fed (11.9 vs 22)- US 10Y 2.865%. US equity futures positive – Walmart +10% pre-mkt after Q2 eps beat ($1.29 vs $1.22), same store sales +4.5% vs 2.4% exp.  GOCs higher in line with tsys after ADP, Man. Sales data , GOC curve 1bp flatter 2s10s, 10s30s unch @ 1.8bps. Core EGBs also lower, gilts weighed by better than exp UK retail sales (0.9% vs 0.0%). Credit 4-5bps wider wk/wk, Ontario 28s trading down 0.5bps on expectatiosn of supply. 

News headlines

One Year Later Nafta Lives On, Resisting Trump’s Trade Wrath (Bloomberg) President Donald Trump has made no secret that he wanted the North American Free Trade Agreement gone. A year of on-again-off-again negotiations without a clear view of an endgame has demonstrated the pact’s staying power. The survival of Nafta was hardly a given exactly a year ago, when negotiators from the U.S., Canada and Mexico gathered at a hotel in Washington. Their task was to start hammering out a fast update to the 24-year-old pact, which governs $1.2 trillion in trade. 

China and U.S. to Resume Low-Level Talks in Bid to Resolve Trade War (Bloomberg) China will dispatch Vice Commerce Minister Wang Shouwen to the U.S. for low-level trade talks in late August, the first official exchanges since earlier negotiations broke down two months ago. The Chinese delegation led by Wang will meet with an American group led by David Malpass, under secretary for international affairs at the Department of the Treasury, at the invitation of the U.S., China’s Ministry of Commerce said in a statement on its website on Thursday.

Erdogan Moves to Shore Up Alliances as U.S. Standoff Deepens (Bloomberg) President Recep Tayyip Erdogan moved to shore up alliances in Europe and the Middle East, easing pressure on the battered lira, as the standoff between Turkey and the U.S. deepened. Efforts to rally support and bolster domestic markets include a call between Turkish Finance Minister Berat Albayrak and international investors. Erdogan was set to speak with French President Emmanuel Macron on Thursday, a day after talks with German Chancellor Angela Merkel and a $15 billion pledge of support from Qatar.

U.S. Stock Futures Rise, Dollar Dips on Trade Hope: Markets Wrap (Bloomberg) U.S. equity futures climbed with European stocks and the dollar fell on renewed hopes for an easing of global-trade tensions. The yuan jumped and Treasuries dipped. Futures on the S&P 500, Dow and Nasdaq indexes extended gains after Walmart beat second-quarter sales and earnings estimates, following the Stoxx Europe 600 Index higher. The greenback, which has seen recent strength on its role as a haven, fell for the first time in six days. Stocks stayed lower in most Asian markets in the wake of disappointing earnings from tech giant Tencent Holding, though pared declines after China said its vice commerce minister will visit the U.S. for talks in late August.

Futures rise as U.S.-China trade talks expected to resume (Reuters) Futures for Canada’s main stock index rose on Thursday after China said it would hold trade talks with the United States later this month, while the Turkish lira continued to recover from its fall last week. September futures on the S&P/TSX index SXFc1 were up 0.55 percent at 7:15 a.m. ET. Manufacturing sales data for June is due at 8:30 a.m. ET. Canada’s main stock index slipped on Wednesday. Dow Jones Industrial Average e-mini futures 1YMc1 were up 0.79 percent at 7:15 a.m. ET, while S&P 500 e-mini futures ESc1 were up 0.51 percent and Nasdaq 100 e-mini futures NQc1 were up 0.79 percent.

Walmart surges after reporting best sales in more than a decade (BNN) Walmart Inc. bounced back from a lackluster start to the year with the strongest sales gain in more than a decade fueled by its grocery business, brightening the outlook for the overall retail sector. The stock jumped in early trading. Comparable sales at U.S. Walmart stores rose 4.5 per cent in the three months ended in July, the company said Thursday, more than double analysts’ estimates. Grocery sales rose the most in nine years thanks to improved fresh-food offerings, and web revenue growth accelerated from the the previous period. The world’s biggest retailer also boosted its full-year forecasts for comparable sales and adjusted profit.

Amazon in running to acquire Landmark movie chain (BNN) Amazon.com Inc. is in the running to acquire Landmark Theatres, a move that would vault the e-commerce giant into the brick-and-mortar cinema industry, according to people familiar with the situation. The company is vying with other suitors to acquire the business from Wagner/Cuban Cos., which is backed by billionaire Mark Cuban and Todd Wagner, according to the people, who asked not to be identified because the discussions are private. The chain’s owners have been working with investment banker Stephens Inc. on a possible sale, the people said. No final decisions have been made, and talks could still fall apart.

Overnight markets

Overview: US 10yr note futures are down -0.143% at 120-09, S&P 500 futures are up 0.51% at 2835.75, Crude oil futures are up 0.17% at $65.12, Gold futures are up 0.2% at $1187.4, DXY is down -0.07% at 96.63, CAD/USD is up 0.04% at 0.7607.

US Economic Data

Canadian Economic Data

Disclosure and Disclaimer

The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.

Ivan Greenstein, Stephan Buu, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update US tsys rallying across the curve, yields 2-3bps lower on heavier volume in TY futures, 10Y 2.87 (-2.5bps). Little reaction to stronger July Retail Sales/Aug Empire Manuf data.  “Risk off” session overnite despite Turkish lira being higher for a 3rd day after central bank made it more expensive to short the xcy. Turkey also doubled tariffs on select US imports. Stock futures lower, S&P -0.57%, Nasdaq -0.80%. China’s stock index fell 2.4% after Q2 earnings from Tencent missed exp, the stock is down ~10% this week. Core EGBs higher led b y UK gilts underpinned by weakness in stocks and July inflation coming in as expected.  GOCs higher in line with tsys, 10Y 2.29%. New CMB 10Y ($2.0bln ~41bps) & 5Y FRN to price this morn. 10Y WI indicated 40.5/40 on screen. 

News headlines

Tencent Hits Tech as Miners Sink European Stocks: Markets Wrap (Bloomberg) U.S. equity futures tracked declines across both Europe and Asia on Wednesday as disappointing earnings from Chinese tech giant Tencent Holdings added to a gloomy mood across global markets. Treasuries climbed, the dollar rose to the highest in 14 months and metals slumped. Contracts for the Dow, Nasdaq and S&P 500 were already edging lower before Tencent reported its first profit drop in at least a decade, spurring further declines. After a positive start to the European session, raw material producers pulled the Stoxx Europe 600 Index down as copper and zinc fell to the lowest in more than a year.

Turkey Just a Test Case as Quantitative Tightening Era Nears (Bloomberg) Turkey is just a drill. A push by major central banks to reverse crisis-era policies is primed to accelerate into 2019 amid plans for higher interest rates and smaller balance sheets. So-called quantitative tightening then risks sucking dollars and euros from nations whose governments and companies binged on cheap debt without improving the fundamentals of their economies.

Amazon Prime Day May Have Boosted U.S. Retail Sales (Bloomberg) A key gauge of U.S. retail sales probably got a boost in July from Amazon.com Inc.’s Prime Day promotion. That’s set to be a bright spot in an otherwise subdued report Wednesday that reflects drags from auto sales and fuel prices. With popular items including the Instant Pot cooker and the 23andMe Inc. genetic test, global sales during Amazon’s 36-hour Prime Day event in mid-July exceeded the company’s other recent promotions including Black Friday and 2017’s Prime Day. Such purchases may prop up the so-called retail “control group” — which excludes auto dealers, gasoline stations, building materials and food services — while the overall figures show a weaker increase than in the prior month.

Turkey doubles tariffs on some U.S. imports; lira rallies (Reuters) Turkey doubled tariffs on some U.S. imports including alcohol, cars and tobacco on Wednesday in retaliation for U.S. moves, but the lira rallied further after central bank’s liquidity moves had the effect of supporting the currency. Ankara acted amid increased tension between the two NATO allies over Turkey’s detention of a Christian American pastor and other diplomatic issues, which have helped send the lira tumbling to record lows against the dollar.

Chinese oil importers shun U.S. crude despite tariff reversal (Reuters) Chinese oil importers are shying away from buying U.S. crude as they fear Beijing’s decision to exclude the commodity from its tariff list in a trade dispute between the world’s biggest economies may only be temporary. Not a single tanker has loaded crude oil from the United States bound for China since the start of August, Thomson Reuters Eikon ship tracking data showed, compared with about 300,000 barrels per day (bpd) in June and July. The United States and China have been locked in a tit-for-tat trade spat over the last few months, but crude was dropped from China’s final list of tariffs on $16 billion in U.S. goods announced last week.

Metals tariffs ‘not a shot against Canada’: Major U.S. steel exec (BNN) The former CEO of America’s largest steel producer says U.S. President Donald Trump’s use of metals tariffs against both its allies and enemies is not “a shot against Canada.” “The people of Canada should not take this as a shot against Canada,” Dan DiMicco, chairman emeritus and former chief executive of Nucor told BNN Bloomberg in an interview on Tuesday. “This is a much bigger issue than any one country. And, what we’ve asked for is: ‘Okay. Sit down. Talk with us. Let’s put together a plan that works for Canada and works for us.’” “We need to work together and we can make this work so it’s mutually okay for all of us, but it’s not destructive for any of us.”

Pot stocks fall as Ontario delays rollout of stores to 2019 (BNN) Canadian pot stocks retreated Tuesday after the country’s largest province said it will delay the launch of bricks-and-mortar cannabis stores until six months after legalization. Canopy Growth Corp. closed trading down 8.25 per cent, Aphria Inc. lost 9.54 per cent and Aurora Cannabis Inc. slid 9.8 per cent on Tuesday.  Ontario’s Progressive Conservative government said Monday it will start cannabis sales with an online-only retail model when marijuana is legalized on Oct. 17, followed by private retail sales on April 1. This is an abrupt policy change from the former Liberal government, which planned to sell cannabis in government run stores, starting with 40 in 2018. 

Overnight markets

Overview: US 10yr note futures are up 0.143% at 120-09, S&P 500 futures are down -0.55% at 2825.25, Crude oil futures are down -1.04% at $66.34, Gold futures are down -0.52% at $1194.4, DXY is up 0.12% at 96.844, CAD/USD is up 0.3% at 0.7635.

US Economic Data

Canadian Economic Data

Disclosure and Disclaimer

The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.

Ivan Greenstein, Stephan Buu, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update US tsys slightly lower, narrow range in TY futures on heavier volume (445k), 10Y 2.89%. Relative calm in EM with the Turkish Lira rebounding 5%, EU peripheral bond yields lower. Core EGBs also weighed by stronger than expected Eurozone Q2 GDP, IP. US equity futures higher, S&P +7, Nasdaq +29. Little reaction to stronger July Import  Prices.GOCs lower in line with tsys, provis unch. 

News headlines

Investors Haven’t Been This Bullish on U.S. Stocks Since 2015 (Bloomberg) The bull run that has taken U.S. equities to record highs this year may be about to reach its peak, according to the latest survey of fund managers by Bank of America Merrill Lynch. Allocations to U.S. stocks jumped 10 percentage points this month to a net 19 percent overweight, the highest since January 2015, the survey said. That makes America the most popular equity region for the first time in five years, according to the bank’s analysts.

China Growth Momentum Stalls as Debt Campaign and Trade War Bite (Bloomberg) China’s economy hit a mid-year rough patch as efforts to curb risky lending and excessive debt collided with a deepening trade war, adding to concerns about global growth. Fixed-asset investment in the world’s largest developing economy rose at the slowest pace in two decades in the first seven months of this year, while infrastructure spending slumped to a quarter of the pace of a year earlier. Factory output, retail sales and credit creation in July all trailed estimates.

Erdogan Escalates Row With U.S., Calls for Boycott of iPhones (Bloomberg) Turkish President Recep Tayyip Erdogan vowed to boycott American electronics, including Apple Inc.’s iPhone, as he retaliates against Donald Trump’s attempts to isolate his economy.After the U.S. imposed sanctions on two Turkish ministers and amid growing domestic pressure from businesses and banks to contain a currency crisis, Erdogan said he wouldn’t back down in the face of the economic attack against his country.

Stocks Rebound as Turkey Calms; Dollar Declines: Markets Wrap (Bloomberg) European stocks tracked gains across most Asian equities as global markets steadied in the wake of Monday’s Turkey-induced turmoil. The dollar slipped from its highest in 14 months and Treasuries fell. The Stoxx Europe 600 Index climbed alongside futures for the S&P 500, Dow Jones and Nasdaq, while European peripheral debt rebounded as a degree of calm returned to Turkish markets. The lira rose, and the country’s benchmark equity index climbed even as a diplomatic standoff between Turkey and the U.S. dragged on. The euro steadied after data showed the euro-area economy grew faster in the second quarter than initially reported.

Canada finance minister at steel mill Tuesday amid talk of new tariff steps (Reuters) Canadian Finance Minister Bill Morneau will make an announcement at steelmaker ArcelorMittal’s Dofasco plant in Hamilton on Tuesday, raising expectations that Canada could propose new tariffs or quotas to protect the industry. The Department of Finance said in a release that Morneau would also meet with local business leaders in Hamilton, the heart of Canada’s steel industry. The government said previously that it was considering a safeguard action to protect steel producers from imports flowing to Canada since the United States imposed tariffs in March.

Brazil’s farmers dump sugar for soy as trade war boosts Chinese demand (Reuters) Last year, Brazilian farmer Gustavo Lopes sized up his sugarcane plantation against his soybean fields. He looked at global trends, including rising U.S.-China trade tensions and a stubborn sugar-market glut. Then he tore up the last of his cane fields and ditched a decades-old supply contract with a local sugar mill. Lopes planted soybeans across his 1,600-hectare (4,000-acre) farm in Sao Paulo state – a bet that paid off earlier this month when Chinese buyers loaded up on South American soy after Beijing imposed tariffs on U.S. beans. The farmer got his highest price ever for soybeans.

Canada’s biggest builder faces ‘new level of risk’ in Saudi feud (BNN) Canada’s diplomatic clash with Saudi Arabia is threatening a key pillar of SNC-Lavalin Group Inc.’s growth plan. The Montreal-based builder gained additional exposure to the kingdom with its two biggest acquisitions, the 2014 purchase of Ireland’s Kentz Corp. and last year’s deal for WS Atkins of the U.K. SNC Chief Executive Officer Neil Bruce is counting on business in the Middle East to bolster his drive to increase profit more than 50 percent by 2020. SNC is getting caught in the crossfire after the kingdom froze diplomatic ties and new business deals with Canada last week, following a call by Canadian Foreign Minister Chrystia Freeland for Saudi human rights activists to be released from prison. The flare-up spooked investors in Canada’s biggest construction company, which gets about 11 percent of sales in Saudi Arabia.

Home Capital Q2 income falls short of estimates (BNN) Home Capital Group Inc. says it earned nearly $30 million in its most recent quarter, but fell just short of analyst estimates. The Toronto-based mortgage lender’s net income for the second quarter of its 2018 financial year was $29.6 million compared to a $111.1 million loss in the same quarter the previous year. It says its diluted earnings per share were 37 cents for the quarter ended June 30, compared to a loss of $1.73 per share in the second quarter of its 2017 financial year.

Overnight markets

Overview: US 10yr note futures are down -0.065% at 120-06, S&P 500 futures are up 0.25% at 2832.5, Crude oil futures are up 1.22% at $68.02, Gold futures are up 0.33% at $1202.8, DXY is down -0.11% at 96.289, CAD/USD is down -0.47% at 0.765.

US Economic Data

Canadian Economic Data

Disclosure and Disclaimer

The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.

Ivan Greenstein, Stephan Buu, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230