Mergers and Acquisitions have Surged in 2014

Financial News and Portfolio Management Discussion through November 22nd

Global stocks rose over the week aided by announcements of new stimulus measures in China and Europe. US Stocks hit new record highs with the S&P 500 gaining 1.1% and the Dow rising 1.0% for the week. Internationally, Japan was down 0.8% and Europe gained 2.9% for the week. The 10 year Treasury yield was flat for the week finishing at 2.32%. 

Japan fell into recession in the third quarter as the country’s GDP contracted 1.6% after a 7.3% contraction in the second quarter. An increase in sales tax to 8% hit consumers hard. Prime Minister Abe announced that he will hold off on an additional tax increase and called for a general election in December.

New housing starts fell 2.8% in October, but new single family home building rose 4.8% in a positive sign.

The CPI rose 0.2% in October and is up 1.7% for the trailing year. Excluding food and energy prices have risen 1.9%.

The People’s Bank of China announced it was cutting its deposit rate by 0.25% to 2.75% and lending rate by 0.40% to 5.60% for the first time since 2012. The move is in an attempt to improve flagging growth.

The ECB announced it might take new stimulus actions to boost the inflation rate which currently sits near 0%.

Halliburton said it was buying oil field services competitor Baker Hughes for $35 billion.

Actavis announced it was purchasing Allergan, a maker of botox, for $66 billion.

Mergers and acquisitions have surged in 2014 on low financing costs and stock increases, hitting $3.1 trillion in total value with $1.5 trillion in the US. It’s the highest dollar volume since 2007.

TARGET_sales
Photo courtesy of http://www.online.wsj.com

Target posted a rise in sales and profit topping their own estimates and Wall Street predictions.

Best Buy’s fiscal third quarter saw sales rise at their fastest pace in over 4 years and profit nearly doubled topping expectations.

Reposted from the Raffa Wealth Management Blog.

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC

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