Global stocks advance on Fed’s interest rate prospects... Goldman Sachs expects weak commodities in 2016... Square IPO value scaled back...
Global stocks advance on Fed’s interest rate prospects
The world’s stock markets have digested words from the Fed in the previous session and almost all are trading higher so far Thursday.
The Fed’s latest minutes lean towards a rate increase mid-December but also that increases are likely to be slow and steady. There are Fed speakers scheduled during Thursday’s session and analysts will be watching closely.
Asian markets have ended the day higher with China boosted by a cut in interest rates from small lenders to entrepreneurs in a bid to add growth from the small business sector which was not covered by previous rate cuts. Tokyo gained as the Bank of Japan held firm on policy; Sydney was boosted by the stronger lead from Wall Street which helped resources stocks in particular.
European indexes are also higher so far with US and Asian market leads creating an optimistic tone.
Wall Street and Toronto are expected to open higher.
Goldman Sachs expects weak commodities in 2016
There is no end in sight for the weak commodities markets according to economists at Goldman Sachs. In a note Thursday the bank said that the weakness has been greater than it predicted when it first flagged lower commodity prices last fall. China’s slowdown is a key factor and although the report suggests there could be a better outlook for markets in 2016 it is not advising that prices will rise sufficiently to bring good returns in the short term. Copper prices are expected to drop to $4,500 per tonne in 2016 with iron ore down to $40 by 2017 (it is $46 now).
Square IPO value scaled back
The value of Thursday’s much-anticipated IPO from tech firm Square has been cut back by $3 billion. The payments firm was valued by private financing at $6 billion last year but the IPO prices it at $2.9 billion. The New York Times reports that shares will start at $9, a drop from the $11-13 range that had been expected, and that CEO Jack Dorsey (also CEO at Twitter) will be under pressure from the lower value.
The world’s stock markets have digested words from the Fed in the previous session and almost all are trading higher so far Thursday.
The Fed’s latest minutes lean towards a rate increase mid-December but also that increases are likely to be slow and steady. There are Fed speakers scheduled during Thursday’s session and analysts will be watching closely.
Asian markets have ended the day higher with China boosted by a cut in interest rates from small lenders to entrepreneurs in a bid to add growth from the small business sector which was not covered by previous rate cuts. Tokyo gained as the Bank of Japan held firm on policy; Sydney was boosted by the stronger lead from Wall Street which helped resources stocks in particular.
European indexes are also higher so far with US and Asian market leads creating an optimistic tone.
Wall Street and Toronto are expected to open higher.
| Latest | 1 month ago | 1 year ago | |
| North America (previous session) |
|||
| US Dow Jones | 17,737.16 (+1.42 per cent) | +2.94 per cent | +0.29 per cent |
| TSX Composite | 13,399.97 (+0.90 per cent) | -2.61 per cent | -10.55 per cent |
| Europe (at 6.00am ET) |
|||
| UK FTSE | 6,360.16 (+1.29 per cent) | +0.12 per cent | - 5.02 per cent |
| German DAX | 11,148.59 (+1.72 per cent) | +9.68 per cent | +17.69 per cent |
| Asia (at close) |
|||
| China CSI 300 | 3,774.97 (+1.60 per cent) | +6.81 per cent | +48.78 per cent |
| Japan Nikkei | 19,859.81 (+1.07 per cent) | +9.53 per cent | +14.87 per cent |
| Other Data (at 6.00am ET) |
|||
| Oil (Brent) | Oil (WTI) | Gold | Can. Dollar |
| 44.53 (+0.88 per cent) |
40.80 (+0.12 per cent) |
1072.90 (+0.39 per cent) |
U$0.7541 |
| Aus. Dollar |
|||
| U$0.7174 | |||
Goldman Sachs expects weak commodities in 2016
There is no end in sight for the weak commodities markets according to economists at Goldman Sachs. In a note Thursday the bank said that the weakness has been greater than it predicted when it first flagged lower commodity prices last fall. China’s slowdown is a key factor and although the report suggests there could be a better outlook for markets in 2016 it is not advising that prices will rise sufficiently to bring good returns in the short term. Copper prices are expected to drop to $4,500 per tonne in 2016 with iron ore down to $40 by 2017 (it is $46 now).
Square IPO value scaled back
The value of Thursday’s much-anticipated IPO from tech firm Square has been cut back by $3 billion. The payments firm was valued by private financing at $6 billion last year but the IPO prices it at $2.9 billion. The New York Times reports that shares will start at $9, a drop from the $11-13 range that had been expected, and that CEO Jack Dorsey (also CEO at Twitter) will be under pressure from the lower value.
