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Market Update - 22/08/16

Monday, August 22, 2016

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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US equities finished weaker on Friday, on light summer volumes. S&P volumes were down -6% vs the 20-day average. Seven of the ten major sectors closed lower. Defensives (Utilities: -1.22% / Telcos: -0.86%) led the market lower on the backup in US duration, while Energy (-0.82%) also underperformed, giving up some of the recent rally.

Asia: Chinese A-share market retreated with light news over the weekend. PBOC weakened yuan fixing by 0.67%, the most since June 27, as the higher probability of a Fed hike this year drove up the dollar; Hong Kong pulled back slightly today, inline with the rest of the region :Japanese shares fairly quiet. NKY/TPX trading 86/98% of recent volume averages with railways/gaming/autos o/performing markets .

WSJ article on two strategies in US market, buying low volatility stocks and shares with good dividends often amounts to same thing.

BAML add Tullow Oil to their Europe 1 list of highest conviction ideas

Kingspan trades +5% at open, exceptionally strong numbers, revenues +19%, trading profit + 50%;

Liverpool FC received unsolicited approach by Chinese group Everbright & PCP Capital Partner

July infrastructure spending down >20% following BREXIT, FT article.

Pfizer nearing $14bn deal to acquire Medivation, thwarting Sanofi and Astra Zeneca.

Fed vice Chairman Stanley Fischer signalled a 2016 rate rise is under consideration.

BoJ Governor in Japan said there is sufficient chance of more easing at it’s policy meeting next month, ruled out helicopter money and said negative rates could technically go deeper.

Iraq planning to increase production by 5%, comes after strong oil move last week , ahead of OPEC and non OPEC meeting in Algeria in September.

ChemChina’s acquisition of Syngenta is close to getting approval by the Committee on Foreign Investment in the US.

VW will resume talks with it’s suppliers today as a dispute becomes serious, some plants idle due to dispute.

Markets flat at open, Eurostoxx +5 BPs. Oil retreats below $50.