Daily Market Update

Daily Market Update

Daily Market Update
Stocks show some recovery despite concerns
It doesn’t take long before investors dip their toes back into the risk pool and Asian and European markets have seen some recovery today despite the ongoing concerns about the global outlook. Investors are only too aware of the Fed scaling back its asset-buying program and rate rises likely next year but also the effects of the weak Eurozone countries and China not delivering as much as expected. Experts are predicting that rebounds will be modest and that more sell-offs will create further bumpy rides. Gold is down slightly this morning while US stock futures are mixed.
 
Today’s data
The Producer Price Index from the Bureau of Labor Statistics is revealed at 8.30am ET
Retail Sales Data is released by the US Bureau of the Census at 8.30am ET
The Federal Reserve’s Beige Book is out at 2pm ET
American Express, Netflix and eBay are among the companies reporting earnings today.
 
$51 billion AbbVie deal could be canceled
AbbVie could pull out of its $51.5 billion acquisition of UK firm Shire following the US Treasury’s crackdown on tax inversions. The Chicago based company has announced that it will hold a meeting of shareholders within the next few days to reconsider the deal, now that the tax benefits of a UK address have been weakened. Shares in Shire have fallen almost 30 per cent on the news; its board says the deal should go ahead and that they would be due a $1.6 billion ‘break-up’ fee from AbbVie if its shareholders vote to ditch the deal. Read the full story.
 
Ireland removes tax incentives for US firms
While the US administration may be making things harder for firms to take their tax affairs elsewhere, Ireland has announced changes that will impact on some of the US firms already there. Big names including Apple and Google have operations based in Ireland but its government said yesterday that special tax breaks for foreign firms will end by 2020 and new firms will be barred from them from next year. The incentives have allowed Apple for example to pay as little as 2 per cent on its Irish subsidiaries. The move is designed to address criticism from the international community, and the EU, about Ireland’s unfair deals to attract multinationals, however the country will still be attractive due to its standard 12.5 per cent corporate tax rate. Read the full story.
 
US-Russia relations unlikely to improve
Russian Prime Minister Dmitry Medvedev has dismissed comments by his Foreign Minister that there could be a ‘reset’ of relations between Moscow and Washington. Medvedev ruled out an easing of tensions saying that they were the result of “destructive and stupid” sanctions imposed on his country by the US and other western nations. He told CNBC that he believed sanctions would soon be lifted but that relations had been damaged and turning the clock back was impossible. Read the full story.
 
Google expands its Amazon-style shopping service
Amazon is to face increased competition from Google in its key retail business.  Following a year of operations of its Shopping Express service, Google is expanding its ‘free same-day or overnight delivery’ model to more US cities and shortening its name to Google Express. Amazon meanwhile has broadened its Prime service to include fresh groceries in some areas and is also planning a same-day service across its product range. Amazon is keen to deliver using unmanned ‘drones’ but will need restrictions on their commercial use to be lifted. Read the full story.