Global News October 20, 2015

  1. Bloomberg News
  2. Global News October 20, 2015

Bloomberg Business

-Liberals take Canada: Justin Trudeau’s Liberal Party secured a surprise majority in Canada’s election, winning 184 of 338 seats in parliament with 99 percent of polls reporting. Trudeau, the son of former prime minister Pierre Trudeau, has overseen the biggest political rebound in Canadian history, with his liberal party gaining 150 seats from the previous parliament. The Canadian dollar was little changed at $1.3o21 at 10:30 a.m. in London following the confirmation of the surprise victory.

-Chinese stocks: The Shanghai Composite Index closed 1.14 percent higher following a strong rally in the last half-hour of trading. Chinese stocks closing at an eight-week high comes as President Xi begins a state visit to the U.K. which Prime Minister David Cameron says will bring $46 billion in deals for that economy.

-Euro-area bank lending: The European Central Bank says in the results of its October bank lending survey that conditions largely continued to improve in the Euro-area, driven by its asset-purchase program and tighter competition between lenders. The survey results were not enough to reverse this morning’s drop in European equities which were dragged lower by energy and commodity producers. The Stoxx Europe 600 Index was 0.7 percent lower at 10:40 a.m. London time.

-Deutsche Bank fat finger: Deutsche Bank mistakenly sent a U.S. hedge fund client $6 billion when a junior member of the company’s foreign-exchange sales team processed a trade using a gross, rather than a net figure. The bank recovered the money the following day and reported the transaction to the U.K.’s Financial Conduct Authority, the ECB and the U.S. Federal Reserve according to the Financial Times.

-Yuan advances: China’s currency advanced the most in a week, reversing earlier declines, with speculation that government intervention was behind the move. The jump comes as the People’s Bank of China and local lenders have increased their holdings in onshore forwards to $67.9 billion in August, five times higher than the average for the previous seven months. For the PBOC, positioning in forwards has the advantage of allowing it to avoid tapping its $3.5 trillion in foreign-exchange reserves in the short-term.

CNN Money

-Earnings season: Shares in Harley-Davidson (HOG) are tanking — down 9% — after the company reported lower-than-expected earnings on Tuesday morning. Shares in IBM (IBM, Tech30) are declining by about 5% premarket after the company posted disappointing quarterly results on Monday afternoon. Revenue came in below expectations, in part due to the slowdown in Asia. A range of companies including Verizon (VZ, Tech30) and Travelers (TRV) are also reporting earnings this morning. After the markets close, another batch of companies are reporting, including Chipotle (CMG) and Yahoo (YHOO, Tech30).

-Stocks in the spotlight — Yum Brands, Sandisk, United: Shares in Yum Brands (YUM) are set to rise about 6% after the fast-food giant announced it will spin off its China operations. The move follows a series of food scandals that have hurt the company’s sales in China. Yum owns Pizza Hut, Taco Bell and KFC. Takeover talk has sent Sandisk’s (SNDK) share price climbing 8% premarket. Western Digital (WDC) is reportedly in serious talks to acquire the chipmaker and a deal could be announced this week. Micron (MU) had been considered another suitor for the firm. Shares in United Continental Holdings (UAL) could be on the move Tuesday after the firm announced its general counsel Brett Hart would lead the company on an interim basis after the CEO suffered a heart attack last week and was put on medical leave. Shares in Takata took a hit Tuesday in Japan — down 3.4% — on concerns that the company may be forced to expand a recall of its defective airbags in the U.S.

– Stock market overview: U.S. stock futures are declining by about 0.3% and most European markets are dipping into the red in early trading. Asian markets ended with mixed results. On Monday, the Dow Jones industrial average edged up 0.1% and the Nasdaq added 0.4%. The S&P 500 didn’t make any significant move.

-Economics: The U.S. Census Bureau is releasing new September housing market data at 8:30 a.m. ET. Construction activity in the U.S. is relatively robust, but the market saw a slowdown in residential construction in August.