Daily Market Update

Daily Market Update

Daily Market Update
Weak output in Europe while China performs better than expected
Europe’s stock markets are continuing their negative run so far today after manufacturing output data showed more weakness in the economy. In the Eurozone bloc there has been increased activity for business, but lower than predicted and manufacturing output in Germany and France is lower too. Some firms are also starting to report tangible losses from the unrest in Ukraine. Asian markets closed mixed as figures showed that China’s output was higher than predicted. Tokyo was closed for a public holiday. After some weak existing home sales data US shares have seen declines over the last 24 hours. US futures are lower this morning and safe-haven gold and oil are up slightly. This is likely to be partly due to increased air strikes in Syria by US and allied forces.
 
Today’s data
No major data expected today.
Carnival will report quarterly earnings before the bell with Bed Bath & Beyond reporting after the close.
 
Drugs firm deals could be hit by inversion rules
Yesterday’s announcement by the US Treasury that ‘inversions’ will become harder to do and less financially attractive is set to hit some deals that are already in the pipeline. The new rules have been implemented immediately and mean that those companies that buy a foreign firm with a plan to flip their citizenship to the lower tax regime of their new acquisition will no longer find it an easy option. A number of firms in the pharmaceutical space have done or are looking to do inversions, while Burger King is one high profile name that was planning to change its tax base with the Tim Hortons deal. Drugs firm AbbVie has an agreed deal to buy Shire and Pfizer has been trying to acquire AstraZeneca but both of these could be affected by the new rules. Shares in both of the target companies have fallen since yesterday’s Treasury announcement. Read the full story.
 
Biggest ever bank IPO?
Following the hugely successful and record-breaking IPO of Alibaba, investors are now looking at what could become the biggest-ever IPO in the banking sector. Citizens Financial Group is expected to raise $3.36 billion with the price due to announced today. Morgan Stanley and Goldman Sachs are among the 21 underwriters. Read the full story.
 
Facebook set to unveil new advertising platform
Facebook will announce details of a new advertising platform next week, which it hopes will hit arch rival Google’s dominance in the space. Facebook’s Atlas will allow marketers greater ability to target demographics but providing data on what adverts have been seen and acted upon by users of the social network and third party sites and apps. Read the full story.
 
Canada set to maintain lower interest rates for some time
There are signs that Canada’s interest rates may stay low for some time to come. Senior deputy governor of the Bank of Canada, Carolyn Wilkins says that output growth may stay lower than it was before the financial crisis and there may therefore need to be continued stimulus for the economy over a longer period. That would include lower interest rates; not the 1 per cent we have seen over the last four years, but more in the 3 to 4 per cent range rather than the 4.5 per cent of the mid 2000’s. Read the full story.