The new year continues to be rocky for commodity prices so far. West Texas intermediate crude-oil futures came under selling pressure in early trading Tuesday, with contracts for front-month delivery falling by over 2 percent to reach the lowest level since 2003. The impact of sustained low prices on major oil producers continues to reverberate geopolitically, with Nigerias oil minister Emmanuel Ibe Kachikwu stating in a presss conference that an emergency meeting of the Organization of Petroleum Exporting Countries could be held in early March. Meanwhile, the earnings season kicked off in the U.S., with New York-based aluminum giant Alcoas fourth quarter results. Despite a nearly 18 percent decline in revenues versus the fourth quarter of 2014, Alcoa management anticipates a rebound in coming years on expectations that total global demand will double over the decade ending in 2020.
Clinton calls for a wealth tax. Democratic presidential candidate Hillary Clinton on Tuesday proposed a 4 percent levy for U.S. taxpayers earning more than $5 million. The tax proposal is called the Fair Share Surcharge and the Clinton campaign anticipates that it could raise as much as $150 billion in additional Federal revenues annually.
Weaker than forecast data in the UK. Industrial production figures for November released today revealed a slowdown from UK manufacturers, with the headline index contracting by 0.7 percent from October despite rising on a year-over-year basis. All primary segments declined for the period, with the data contributing to a fresh multi-year low for the pound versus the dollar in trading this morning.
PBOC acts to defend the yuan. Overnight Chinas central bank, the Peoples Bank of China, began purchasing its own currency in Hong Kong, sparking a distortion in money markets there that drove up the overnight interbank borrowing rate by more than 66 percent. Chinese policy makers are anxious to close the gap between yuan valuations at home and abroad.
Uber raises capital for Chinese expansion. On Monday, privately held ride-share company Uber announced that it has successfully completed a capital raise for its Chinese operation that values the division at $7 billion. The parent company, based in San Francisco, was valued at $62.5 billion at the completion of its most recent private capital round.
Prepa warns of default. On Monday, the Puerto Rico Electric Power Authority, better known as Prepa, announced that it will be unable to pay more than $1 billion in interest and maturing obligations before July 1 based on current cash available. The utilitys management called for lawmakers to approve the implementation of a debt-restructuring agreement reached between bondholders and the power provider in December.