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Market Update - 09/01/17

Monday, January 9, 2017

Disclaimer: This is an informal commentary by one of our Market Analysts. It should not be taken as investment advice and is made available only on that basis.
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U.S. equities finished mostly higher Friday as the S&P and Nasdaq both touched all-time highs post the jobs report. (S&P 500 +0.35%)-Info Tech (+1.10%), Industrials (+0.69%), and Financials (+0.63%) outperformed, while Telecom (-2.59%) was the lone sector to close in the red.

Beppe Grillo, leader of Italy's Five Star movement has u-turned somewhat by urging his party members to abandon Eurosceptic policies of Nigel Farage's UKIP and align better with pro- EU liberals

Piece from FT: top performers in FT 100 in 2016 , led by Anglo American, Glencore, Fresnillo, BHP, RIO, Wm Morrison, Randgold Resources, Royal Dutch B, Smiths Group and RDSA. Fallers led by Capita, Easyjet, Next, Mediclinic International, Dixons Caprphone, IAG, Barratt Developments, RBS, ITV and Taylor Wimpey.

A quiet start to the week with Japan closed for Coming-of-Age Day. ASX200 +0.9% leads with strength in the banks. HK/China stable with macro in-line & RMB stable: HSI +0.2%, HSCEI -0.2%, SHCOMP +0.5%. Other markets within 40bp of Fri close.

BAML downgrade Wm Morrison in UK after a strong run, worried by UK market.

The Sunday Times suggest the most likely date for the Supreme Court ruling on Brexit will be Jan 23rd  but it could be as early as Thursday. Comment over weekend sees spin put out on resignation of senior UK diplomat to EU.

UK set to sell more of Lloyds TSB.

The FBI has arrested a former Volkswagen executive who faces charges of conspiracy to defraud the United States,  marking an escalation of the criminal investigation into the automaker’s diesel emissions cheating scandal.

Rating agency DBRS is due to review Italy's A (low) rating this Friday having out the sovereign under review last August due to the potential outcome of the constitutional reform referendum.

Morgan Stanley and UBS Group  are in talks with local partners to boost holdings in their China securities businesses, a sign of growing confidence in those operations.

U.K. Prime Minister Theresa May signalled regaining control of immigration and lawmaking are her Brexit priorities even if that means quitting Europe’s single market. She gave an interview to Sky News yesterday where she said getting the right relationship with Europe, not keeping bits of membership. Sterling weakened to .8653 v EUR.

Oil trades off 0.7% to $56.70.

Fiat Chrysler Automobiles will invest $1 billion toward making three new Jeep models in the U.S., plus a Ram heavy-duty pickup now built in Mexico, as President-elect Donald Trump pressures the auto industry to hire workers and produce vehicles above the border. Follows Ford move last week.

The dollar strengthened for a second day against the yen, spending most of the Asian day above 117, after U.S. jobs and wage data for December bolstered the case for the Federal Reserve to raise interest rates this year.

Europe trades off 30 Bps, UK +25 BPs after open.