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Daily Agenda: Clinton and Cruz Eke Out Iowa Wins
Caucus victors offer more pragmatic views of finance; unemployment falls in the euro zone; China National nears Syngenta deal; BP earnings collapse; Google edges out Apple.
Last nights results from the Iowa caucus were potentially significant news for the U.S. financial services industry. Former Secretary of State Hillary Clinton and Senator Ted Cruz emerged victorious in their respective party races in Iowa Monday though both won by razor-thin margins. Although Clintons rhetoric towards major financial institutions has hardened in recent months as she grappled with populist Senator Bernie Sanderss surge in the polls, she maintains close ties with many industry insiders. Cruz meanwhile, the husband of a senior officer in Goldman Sachs wealth management division, has also adopted anti-big bank rhetoric at times but has also criticized Dodd-Frank regulations. The Iowa results now place two candidates with pragmatic histories of dealing with the financial industry ahead of more vocal critics. If each can maintain this momentum, the resulting general election may be a best-case scenario for financial firms. Of course, Iowa is a small state and represents just the start of a long primary season.
Euro-zone unemployment falls. On Tuesday, data issued by Eurostat indicated that the employment situation within the common currency zone improved in December with the headline unemployment rate declining to a more than four-year low of 10.4 percent. Those are still high jobless rates by U.S. and U.K. standards the result of entrenched structural levels of unemployment in southern European economies. Nonetheless, the decline represents a significant win for euro-zone policymakers despite looming deflationary pressures. The question facing investors now is whether the improving job situation may affect the European Central Banks March decision on boosting its asset-purchase facility.
BP battered by falling oil prices. On Tuesday, London-based oil giant BP reported its six straight year-over-year decline in profits, with net losses that dragged returns 91 percent lower for Q4 versus the same period in 2014. With results falling well short of analyst estimates for the final three months of 2015, BP racked up total new losses of $6.5 billion, the worst results in more than three decades.
CNC approaches deal for Syngenta. On Tuesday, Bloomberg reported that China National Chemical Corp., a state-controlled firm, is close to completing an acquisition of Swiss agrichemical giant Syngenta in a deal that could total as much as $43 billion in notional value. If approved, the acquisition would be the largest yet consummated by a Chinese firm abroad and would represent a setback for St. Louis-based Monsanto, which courted Syngenta unsuccessfully last year.
Google beats estimates.Alphabet, the parent company of Google, announced quarterly results Tuesday that included earnings of $8.67 per share versus consensus analyst estimates of $8.09. Revenues increased by 18.5 percent versus the same period in 2014 with premarket trading pushing the companys market value above that of Apple to assume the title of the largest public company by capitalization.
RBA and RBI stay the course. Reserve Bank of Australia policymakers left benchmark rates unchanged at historic lows during the central banks monthly announcement today, with a dovish tone based on continued deflationary pressures globally. The Reserve Bank of India today chose to leave the 6.75 percent lending rate intact, but criticized financial institutions for not passing the reduced cost of capital on in recent months.