Diary - May 30, 2023 (2023)

30 May 2023 r

Daily market commentary

Canadian headlines

• Alberta Premier Danielle Smith and her United Conservative Party retained control of Canada's oil-producing province in Monday's election, sparking a series of energy policy clashes with Prime Minister Justin Trudeau. Smith's UCP won 49 of 87 seats in the provincial legislature to form a majority government, defeating the left-wing New Democratic Party. Smith, 52, became prime minister last fall and won the leadership of her party after her predecessor, Jason Kenney, resigned over dissatisfaction with her handling of the pandemic. A victory threatens to complicate Trudeau's quest to meet Canada's climate commitments. Smith opposed a plan to make the nation's power grid zero by 2035 and pledged to fight efforts to reduce emissions from the province's tar sands.
• Quebec financial firms, including the largest bank, have set a goal of raising up to C$1 billion ($735 million) for a new ESG fund. The 10 investors behind the Fonds Investi initiative include provincial pension administrator Caisse de Depot et Placement du Quebec, the National Bank of Canada and the Federation of Caisses Desjardins du Quebec, a financial cooperative in the Canadian province. Initial expressions of interest from the companies include a combined commitment of C$300 million for the new fund, according to a Bloomberg statement. Additional funds will be collected over the next two years. $50 million to $75 million mandates will be awarded to established asset managers in four categories: equities, fixed income, hedge funds and private equity. The money will be managed through environmental, social and governance investment strategies designed to help Montreal grow as a sustainable financial hub.

world headlines

• European equities were mild at the open as investors saw signs of progress in the US debt cap deal, with concerns about decidedly aggressive central banks ahead of this week's jobs data. The Stoxx 600 was down 0.2% at 08:06 ET. M. in London as the White House and Republican congressional leaders prepared lobbying campaigns to get approval for a deal to prevent US bankruptcy. Banks and energy stocks plummeted while the media and real estate sectors were the best performers. The Stoxx 600 rally stalled in May, with the benchmark index recording its biggest monthly decline this year amid the specter of recession. Fears that central banks would keep interest rates high for longer in the face of high inflation also limited demand for risk. Tuesday's figures showed that prices in UK stores are rising at a record pace.
• US stock futures traded higher on Tuesday as enthusiasm for artificial intelligence fueled a rally among chipmakers and technology stocks. Treasury funds pushed through in hopes that Congress would pass a debt deal to avoid default. S&P 500 and Nasdaq 100 futures rose 0.5% and 1.1% respectively. Nvidia's market value is expected to exceed $1 trillion as it skyrocketed in pre-market deals after CEO Jensen Huang unveiled several AI-related products and services. Other AI stocks also rose, including Advanced Micro Devices Inc., Intel Corp., Qualcomm inc. and Meta Platforms Inc.
• Asian equities were mixed as Chinese equities briefly moved into bearish territory, dampening sentiment as other markets poised to hit new milestones. The MSCI Asia Pacific Index was up 0.1% at 4:30 PM. Time in Hong Kong. South Korea outperformed the region after the market bounced back from the holiday season and the Kospi index approached a bullish trend. Korean chipmakers, including Samsung Electronics, were among the biggest pushers for the regional benchmark fueled by the AI ​​craze. India's benchmark indices also reached record highs. Japanese and Chinese equities underperformed their regional counterparts. A major index of Chinese stocks listed on the Hong Kong Stock Exchange lost more than 6% in May so far, one of the worst performers among leading stock indices. Setbacks, from a weak economic recovery to tensions with the US, have left traders with little incentive to buy.
• Brent crude fell along with other commodities as the risk-taking tone in Asia overshadowed progress toward a deal on the US debt ceiling. to investors. investors. The main indicator of Chinese equities was also on track to enter the bear market, helped by the sluggish economic recovery. Crude oil is about 11% cheaper this year as China's weak post-Covid Zero economic recovery and an aggressive Federal Reserve campaign weighed on the demand outlook. Russian supply has also been resilient, even after the country announced it was cutting production.
• Gold stabilized after hitting its lowest level since mid-March amid Congressional optimism to pass major debt ceiling deal likely to raise interest rates again in June or July to halt continued inflation. The outlook has weighed on gold in recent weeks as higher interest rates tend to be negative for interest-free bullion. Spot gold fell as much as 0.6% to $1,932.15 an ounce, just below its 100-day moving average. At 10:14 in London, the exchange rate changed slightly to $1,942.57.
• According to the European Central Bank, markets in the euro area could face "liquidity tightness" due to heightened economic uncertainty, normalization of monetary policy and tighter financial conditions. In a report released ahead of Wednesday's Financial Stability Review, the central bank noted the simultaneous deterioration in financing conditions and market liquidity in the region since early 2022. This is remarkable, with indicators suggesting market liquidity is now so low as during the onset of the pandemic in early 2020, he said. According to the ECB, this trend is emerging as central banks have eased their accommodative monetary policies and large bond purchases in recent years, supporting the smooth functioning of funding markets despite deteriorating liquidity conditions.
• Last week, investors made money out of exchange-traded funds by buying emerging market equities and bonds. It was the fourth consecutive week of travel. According to data collected by Bloomberg, outflows from US-listed emerging market ETFs that invest in developing countries, as well as ETFs that target specific countries, totaled $4.73 million in the week ending May 26, with losses of $511.3 million in the previous week. . So far this year, inflows have reached $8.45 billion.
• The debt ceiling deal between President Joe Biden and Speaker of the House Kevin McCarthy is approaching its crucial final milestone with less than a week to gain congressional approval before its May 5 deadline. June. Biden and McCarthy spent much of the Memorial Day holiday lobbying members of their respective parties to garner enough support ahead of the House vote scheduled for Wednesday. If the two leaders manage to overcome the expected resistance on their flanks, the deal will go to the Senate, where a single objection threatens to unleash a time-consuming process and push the United States to the brink of bankruptcy for the first time. .
• Russia said it shot down eight drones targeting Moscow on Tuesday, the largest attack on the capital since President Vladimir Putin ordered an invasion of Ukraine. The defense ministry in Moscow blamed Ukraine for the attack, adding that air defenses shot down five drones, while electronic jamming was used to divert three more from their intended targets. Ukraine has not yet responded. It is the most serious incident in Moscow since two drones exploded over the Kremlin on May 3 in an attack that authorities also blame on Ukraine, which has denied involvement. Russian areas near Ukraine have been attacked repeatedly in recent months, and the defense ministry in Moscow said last week that troops had defeated an incursion by attackers who had crossed the border into the Belgorod region.
• Elon Musk landed in Beijing on the billionaire's first visit to China in three years and met with Foreign Minister Qin Gang. Musk said Tesla Inc. is poised to continue its expansion in the country, and he and Qin discussed the merits of maintaining ties between China and the United States, according to a government statement late Tuesday. Qin told Musk that China is committed to creating a good business environment for foreign companies, the statement said. Musk is also expected to visit Tesla's factory in Shanghai, said people familiar with the matter who wish to remain anonymous because the information is private. Tesla's CEO may have a good meeting with Premier Li Qiangas to discuss the automated driving technology Tesla is trying to introduce in China, one of the people said.
• Nvidia Corp. has the chance to become the world's first chipmaker with a market cap of $1 trillion, joining the exclusive club of American companies with such a high valuation. The shares were up as much as 4% in premarket trading at $404.91 per share on Tuesday. If profits continue, the Silicon Valley company will reach $1 trillion and join several companies including Alphabet Inc., Amazon.com Inc., Apple Inc. and Microsoft Corp., which are so highly rated. Fewer than 10 companies worldwide have reached this level. Over the weekend, Nvidia CEO Jensen Huangan announced a variety of AI-related products ranging from robotics to gaming, advertising and networking. It also showcased an AI supercomputing platform that will help tech companies create their own versions of ChatGPT. "It's too much," Huang said during his presentation in Taiwan. "I know it's too much.
• According to people familiar with the matter, Macquarie Group Ltd. the sale of the South Korean company DIG Airgas Co. for more than $2 billion. Macquarie's investment arm is working with a financial advisor as it prepares for a possible sale of the company formerly known as Daesung Industrial Gases Co. Other industrial companies and investment funds have initially shown interest in the industrial gas producer, people said. Talks are in the early stages and Macquarie could decide to hold onto the assets longer, people said. A Macquarie representative did not immediately respond to requests for comment.
• Malaysia believes financier Low Taek Jho is hiding in Macau along with other people wanted in connection with the multibillion-dollar 1MDB scandal, Al Jazeera reported, citing the country's anti-corruption agency. The information was confirmed by several people who saw the defector, better known as Jho Low, in Macau, the Malaysian Anti-Corruption Commission said in a written response to Al Jazeera. It concerned 1MDB suspect Kee Kok Thiam, who was arrested and released by MACC earlier this month. The Malaysian authorities have been working for years on the repatriation of Jho Low. He was first charged in absentia by a Malaysian court in 2018 on eight counts of money laundering and issued an arrest warrant for his role in 1Malaysia Development Bhd. Low publicly declared his innocence later that year.
• Constellation Energy Corp. has an ambitious billion-dollar plan to produce hydrogen using carbon-free nuclear energy. But the plan is on hold and could go off the rails completely as the company awaits advice from Washington on a tax credit expected to play a key role in efforts to use gas to decarbonise heavy industry. The U.S. Treasury Department is expected to issue regulations in the coming months explaining how hydrogen suppliers qualify for subsidies of up to $3 per kilogram under the Reduced Inflation Act. The industry has been waiting for guidance since the landmark bill was signed in August, and the fate of the Constellation plan hinges on whether the Biden administration imposes the hard limits that environmentalists and some Democrats are pushing for. Energy giant Constellation is the first American company to produce hydrogen. atvolume using nuclear power at a plant in upstate New York. It was planned to install the technology in several reactors across the Midwest to supply industrial customers. Factories that produce steel, fertilizers, chemicals and other carbon-intensive products are responsible for about a quarter of global greenhouse gas emissions, and hydrogen produced by renewable or nuclear power can provide a low-carbon alternative to processes that rely on fossil fuels. But there is mounting pressure to introduce language into policies that would undermine the company's strategy.

DoorGOOD|2023-05-30T14:02:53+00:0030 May 2023 r|Gazeta|

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