Week 18 2017

Week 18 2017

01 May – 05 May

 

01 May

 

It would be easy to conclude from the first-quarter results of two of the world’s largest oilfield services companies that recovery is under way in their sector. Halliburton and Schlumberger in recent days both announced their first quarterly revenue growth since the oil market crash of 2014.

 

The Bank of England faces a monetary policy dilemma as it prepares to mark 20 years of independence this week. Should it respond to the unwelcome return of inflation with higher interest rates? Or should it worry about the latest evidence of a slowdown, by maintaining rates at the rock bottom 0.25 per cent rate?

 

Boards of companies listed on the S&P 500 index have authorised $146bn in share buybacks this year, marking the lowest pace in five years, with directors worried about “extremely high valuations,” according to research by Goldman Sachs.

 

The long legacy of the vast books of bad debts accrued by Spanish banks has proven to be good business for US private equity groups, which have emerged as custodians to the country’s real estate woes.

 

02 May

 

An independent survey of China’s manufacturing sector indicates business activity grew at the slowest pace since September last month as sluggish demand dragged on production, putting the country’s factories on uncertain footing at the start of the second quarter.

 

The Philippines manufacturing sector expanded in April albeit it at a slower rate than the previous month as output, new orders and employment saw a slower rate of growth.

 

Canada and Australia led a relatively charmed life through the great financial crisis of 2007-8, with their banking systems proving more robust than most. Yet it is possible that they may have a delayed reaction thanks to overheated property markets in some of their biggest cities. More specifically, the plight of Home Capital Group, Canada’s largest alternative mortgage lender, gives pause for thought.

 

US corporate boardrooms’ approval of share buyback plans has fallen to its lowest level since 2012, signalling that the stock market’s surge to further highs this year is curbing a key source of demand for equities.

 

03 May

 

The eurozone’s economy has showed more signs that it has escaped its post-crisis doldrums, as figures published on Wednesday indicated that growth in Europe’s single currency area accelerated at a faster pace than in either the UK or the US in the first quarter.

 

First the dinner, now the bill. The EU has raised its opening demand for Britain’s Brexit payment to an upfront gross payment of up to €100bn, according to a Financial Times analysis of new stricter demands driven by France and Germany. The revised price tag reflects the hardening position of EU member states, which have abandoned earlier worries about political risk to help plug a whole in the EU budget related to Brexit. The British pound dropped 0.2 per cent against the dollar on the news.

 

Measures of US market volatility continue retreating and remain historically subdued as investors anticipate calm trading conditions in the coming month, with Wall Street’s barometer of fear near lows previously seen before the financial crisis erupted.

 

Tech stocks are keeping US equity indices barely in the black in midday trading on Tuesday, balancing out the drag from major automakers’ shares following the release of disappointing sales data.

 

04 May

 

Norway’s central bank kept its interest rates on hold at its latest policy meeting and plans to keep them there for the foreseeable future, adding that it will increase the frequency of its meetings and publish more information on its discussions in an effort to improve transparency around its policies.

 

The region’s fast growth rates could falter without massive investment in infrastructure, while China — which looks set to benefit from the US withdrawal from the TPP trade pact — is readying more lending firepower

 

US equity indices pulled back some of their losses at the end of the day on Wednesday, after the Federal Reserve opted to sit pat while saying it believed the recent slowdown in US growth was temporary.

 

CNN and the New York Times are President Donald Trump’s favourite punching bags in a US media industry he derides as “fake news”. But the tumultuous start to the Trump presidency has been a boon to those outlets, driving record ratings and subscription growth in the first three months of this year.

 

05 May

 

The pace of US jobs growth bounced back last month while the unemployment rate dipped to its lowest level since 2007, supporting the Federal Reserve’s view that the economy’s choppy first-quarter was probably a blip and bolstering Wall Street’s expectations for a June rate rise.

 

The euro has edged a little lower today, but at $1.0960, it is still around its strongest point since November, with gains this week pinned on Mr Macron’s well-received performance against the far right’s Marine Le Pen in the final televised debate of the campaign. He is leading in the opinion polls by a wide margin.

 

It wasn’t that long ago that the slightest Brexit comment from a middling UK or European politician would send investors into a flap and toss the pound around the foreign exchange market like leaves on a windswept afternoon.

 

More bad news for Bill Ackman. Herbalife shares climbed higher in extended trading on Thursday after the the nutrition drinks marketing business lifted its full-year earnings outlook.