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Market Update - 29/09/16

Thursday, September 29, 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: The S&P closed +0.53%, +0.83% from the London close, on volumes +4% vs. the 30 day average. U.S. Equities continued their rally after OPEC agreed to a preliminary deal to cut production, the first time in over 8 years. Oil rallied over +6% at one point after Iran and Saudi Arabia came to surprise agreement. It eventually closed up +5.5% over $47, pulling Energy up over +4% and the rest of the S&P with it. OPEC agreed to cut production to a band of 32.5-33 million barrels per day, while Iran won’t have to freeze production (final details have not been worked out). US 10Y Yield gained +2bps to 1.57%, while US dollar was flat on the day. Today we look to Initial Jobless Claims and GDP. Telcos the greatest laggard, followed by Utilities and Health Care. As mentioned, Energy the best performing sector, followed by Materials & Industrials.

Asian stocks rallied led by Energy producers. Malaysian Ringitt rallied on export prospects. Japan strong.

Spain on T+2 from today

Yigit Bulut, a chief adviser to Turkish President Recep Tayyip Erdogan, said the country must consider using a new wealth fund or a group of state-owned banks to buy the Frankfurt-based company!

France announced the funding plan for 2017. No major surprises, numbers are almost identical to 2016 ones

Article in Svenska Dagbladet in Sweden that its two major holders (Industrivarden and Investor) are looking at what Ericsson would be valued at in potential sale or sale of parts. According to the article Industrivaerden is against sale of their Ericsson stakes but have not ruled such a scenario out.

Smurfit Kappa XD 22c today

All markets are open today.

Sumner Redstone’s daughter is looking to undo the last big strategic move of her father, Viacom and CBS.

Wells Fargo CEO is not out of woods yet, despite pay cut after misspelling scandal, says WSJ.

Press articles everywhere on demise of Blackberry phones.

Goldman Sachs Group  said OPEC’s deal to cut output could add as much as $10 a barrel to oil prices

Larger discretionary macro and event-driven hedge funds are most at risk of shutting down as low returns weigh on the industry, according to the chief executive officer of the world’s largest publicly traded hedge-fund manager, MAN Group.

Janet Yellen told US lawmakers that most FOMC members expect a rate increase this year.

Och Ziff Capital Management agreed to enter into a deferred prosecution agreement into millions of US$ of bribes funnelled to African officials.

Spain’s Socialist Party is in chaos, says press, potentially boosting PM Rajoy’s chances of taking power.

Europe better, Eurostoxx trades +1.06%;