Daily Agenda: Federal Reserve Beige Book Signals Optimism

China holds enormous parade to celebrate end of World War II; Syngenta announces buyback; CalSTRS considers allocation shift.


Andrew Harrer

The Federal Reserve Beige Book release yesterday was upbeat, detailing small signals that at long last, a pickup in wages may have arrived at to complement improving employment figures. With the next meeting of the Federal Open Market Committee only two weeks away, the report’s optimistic tone seems to support the hawkish stance taken by policymakers prior to the recent turbulence in emerging markets. With no clear indication of whether problems abroad have shifted Fed policymakers’ reasoning, the debate over will the Fed hike or won’t it is likely to continue to be a central market narrative.

Syngenta seeks to appease investors with share buyback plans . Swiss agricultural firm Syngenta today announced plans to buy back as much as $2 billion worth of its shares and spin off a seed unit. The move comes after a group of investors expressed frustration over the company’s rejection of a $47 billion takeover by Monsanto.

China’s wraps show of military strength with dovish rhetoric. China today held a massive military parade in Beijing featuring China’s latest military hardware to celebrate victory over Japan in World War II. President Xi Jinping used the event to announce a reduced head count for the People’s Liberation Army and send a message of peace. Separately, Chinese navy warships entered the Bering Sea off the coast of Alaska for the first time today.

CalSTRS considers major allocation shift. Media reports today indicate that investment officers at the California State Teachers’ Retirement System (CalSTRS) met yesterday to consider shifting as much as $20 billion out of equity and some fixed-income investments. The investments under consideration account for more than 10 percent of the fund’s total investments and would reportedly be redeployed in U.S. Treasuries and alternative investments in a move to limit volatility.

Chinese oil company halts Canadian operations. Under pressure from environmental regulatory agencies and depressed oil prices, China National Offshore Oil Corporation has announced this week that it will cease production at its Nexen Energy unit Alberta oil sands facility. State-controlled CNOOC acquired the Canadian–based Nexen for $15.1 billion in 2013 and after shifting management, has run into a string of environmental compliance issues.