Global equities rose for another session on Wednesday as a modest rebound in commodity prices sparked hopes among investors that deflationary pressures may have reached a bottom. This tentative appetite for risk assets was felt in global bond markets as well as futures for 10-year U.S. Treasuries sold off sharply to a multiweek low. As the likelihood of further easing announced at next week’s European Central Bank meeting becomes consensus, some market participants appear willing to wager that the worst is over, for now.
Clinton, Trump seize the day on Super Tuesday. Real estate developer and reality television star Donald Trump secured victory in seven Republican primaries on Tuesday while Senator Ted Cruz won three races, including in his home state of Texas. Florida Senator Marco Rubio secured a victory in the Minnesota caucus. Meanwhile former Secretary of State Hillary Clinton bagged seven states in Democratic primaries compared to four by Vermont Senator Bernie Sanders.
Moody’s puts China on watch with Negative status. On Wednesday, Moody’s Investors Service reduced the outlook on sovereign debt from China to Negative from Stable, becoming the first major credit-ratings agency to weigh in on the impact of macro headwinds in the world’s largest developing economy. The report specifically criticized a lack of a clearly articulated plan by leaders in Beijing.
U.S. punishes steel importers. On Tuesday, the U.S. Commerce Department declared a tariff on producers of cold-rolled steel from seven nations including Japan, the U.K. and China. The U.S. trade watchdog concluded that foreign producers were selling the steel at artificially low prices as they worked through excess inventory, and imposed a tariff of up to 266 percent. According to KeyBanc Capital Markets analyst Philip Gibbs, “We believe stronger-than-expected duty rates in tonight’s determination could provoke more of a temporary risk-off approach for steel buyers.”
Ex-Chesapeake head faces charges. On Tuesday, the Department of Justice unveiled charges against former Chesapeake Energy chief executive officer Aubrey McClendon. Federal prosecutors allege that during his reign at the Oklahoma City-based natural-gas giant, McClendon oversaw collusion between energy companies on bids for lease rights.
Sports Authority files for Chapter 11. On Wednesday, Sports Authority filed for Chapter 11 bankruptcy protection after failing to keep pace with rival athletic retailers while struggling with debt from a 2006 leveraged buyout engineered by Leonard Green & Partners for $1.3 billion. The Englewood, Colorado company, which holds naming rights to the stadium of Super Bowl champions Denver Broncos, ran aground during a period of relative outperformance for sports retailers. According to the filing, the retailer will shut down 140 locations in the coming months.
