Markets mixed, oil still pressured... S&P warning over increased defaults... Share buybacks could hurt US firms... European policymaker says QE is not likely...
Markets mixed, oil still pressured
World markets are mixed Thursday with Asian indexes closing lower with most European markets stronger. Oil prices are continuing to show instability and a new report from OPEC suggests that non-member producers will see their markets contract in 2016.
Chinese investors reacted positively to IPO however with commodities still under pressure Shanghai was unable to finish above the line and Tokyo’s Nikkei was down almost 1.5 per cent.
Wall Street and Toronto are expected to open higher.
S&P warning over increased defaults
There could be an increase in loan defaults from the energy sector. Standard & Poor’s warns that 50 per cent of energy junk bonds are at risk of default with $180 billion of loans distressed. CNN reports that it’s not just oil firms that could struggle to repay loans taken out when business was good; miners are also at risk from default as conditions worsen.
Share buybacks could hurt US firms
US firms that borrow money to buy back shares in order to return better yields to shareholders could be under pressure in 2016. Reuters reports that as the Fed begins to raise interest rates those companies that have borrowed heavily will suffer. Goldman Sachs says that buybacks will continue but that companies using them will underperform as financial conditions tighten.
European policymaker says QE is not likely
The majority of governors at the European Central Bank do not want further quantative easing. That’s according to ECB executive board member Yves Mersch who says the “majority of the Governing Council” do not want to extend QE and believe that the bank can achieve its goals without it.
World markets are mixed Thursday with Asian indexes closing lower with most European markets stronger. Oil prices are continuing to show instability and a new report from OPEC suggests that non-member producers will see their markets contract in 2016.
Chinese investors reacted positively to IPO however with commodities still under pressure Shanghai was unable to finish above the line and Tokyo’s Nikkei was down almost 1.5 per cent.
Wall Street and Toronto are expected to open higher.
| Latest | 1 month ago | 1 year ago | |
| North America (previous session) |
|||
| US Dow Jones | 17,492.30 (-0.43 per cent) | -1.34 per cent | -1.74 per cent |
| TSX Composite | 12,937.59 (+0.12 per cent) | -3.53 per cent | -6.61 per cent |
| Europe (at 6.00am ET) |
|||
| UK FTSE | 6,114.11 (-0.21 per cent) | -2.57 per cent | -5.94 per cent |
| German DAX | 10,633.41 (+0.39 per cent) | -1.84 per cent | +8.51 per cent |
| Asia (at close) |
|||
| China CSI 300 | 3,623.08 (-0.35 per cent) | -5.48 per cent | +12.46 per cent |
| Japan Nikkei | 19,046.55 (-1.32 per cent) | -3.18 per cent | +9.38 per cent |
| Other Data (at 6.00am ET) |
|||
| Oil (Brent) | Oil (WTI) | Gold | Can. Dollar |
| 40.04 (-0.17 per cent) |
37.03 (-0.35 per cent) |
1071.40 (0.47 per cent) |
U$0.7381 |
| Aus. Dollar |
|||
| U$0.7296 | |||
S&P warning over increased defaults
There could be an increase in loan defaults from the energy sector. Standard & Poor’s warns that 50 per cent of energy junk bonds are at risk of default with $180 billion of loans distressed. CNN reports that it’s not just oil firms that could struggle to repay loans taken out when business was good; miners are also at risk from default as conditions worsen.
Share buybacks could hurt US firms
US firms that borrow money to buy back shares in order to return better yields to shareholders could be under pressure in 2016. Reuters reports that as the Fed begins to raise interest rates those companies that have borrowed heavily will suffer. Goldman Sachs says that buybacks will continue but that companies using them will underperform as financial conditions tighten.
European policymaker says QE is not likely
The majority of governors at the European Central Bank do not want further quantative easing. That’s according to ECB executive board member Yves Mersch who says the “majority of the Governing Council” do not want to extend QE and believe that the bank can achieve its goals without it.
