Market Update
Housing Starts In November Unexpectedly Soared
Brian Turner
19 Dec, 2023
New York City
Seasonally adjusted housing starts in November rose 14.8% from the previous month to an annual rate of 1.56 million homes, the U.S. Census Bureau reported Tuesday.
October housing starts were revised to 1.359 million.
November housing starts rose 9.3% from the annual rate of 1,427,000 in the month a year ago.
Single-family housing starts in November were at a rate of 1,143,000, an increase of 18% above the revised October annual pace of 0.969 million.
The November rate for units in buildings with five units or more was 404,000.
Building permits decreased 2.5% from the previous month but rose 4.1% from a year ago in November to 1.46 million, and housing completions rose 5.0% from October but fell 6.2% from a year ago in the month to 1.447 million.
U.S. Market Indexes Attempt to Advance, Housing Starts Unexpectedly Rose In November
Barry Adams
19 Dec, 2023
New York City
Benchmark indexes struggled in Tuesday's trading, and investors debated the future rate path and economic outlook.
Market indexes edged slightly lower in the final full-week of trading as indexes registered solid gains for the year so far.
The S&P 500 index has advanced 3.8% in December and 23.5% in 2023, and the Nasdaq Composite has gained 4.8% in the month and 42.4% in the year so far.
Investors have bid up stocks after inflation steadily edged lower in the year, largely reflecting lower energy prices, and resilient consumer spending kept the economic growth above 2%, contrary to the calls for recession by many economists at the beginning of the year.
Housing Starts In November Unexpectedly Soared
Seasonally adjusted housing starts in November rose 14.8% from the previous month to an annual rate of 1.56 million homes, the U.S. Census Bureau reported Tuesday.
October housing starts were revised to 1.359 million.
November housing starts rose 9.3% from the annual rate of 1,427,000 in the month a year ago.
Single-family housing starts in November were at a rate of 1,143,000, an increase of 18% above the revised October annual pace of 0.969 million.
The November rate for units in buildings with five units or more was 404,000.
Building permits decreased 2.5% from the previous month but rose 4.1% from a year ago in November to 1.46 million, and housing completions rose 5.0% from October but fell 6.2% from a year ago in the month to 1.447 million.
U.S. Indexes and Yields
The S&P 500 index gained 0.2% to 4,803.13, and the Nasdaq Composite increased 0.2% to 14,924.26.
The yield on 2-year Treasury notes increased to 4.43%, 10-year Treasury notes inched lower to 3.90%, and 30-year Treasury bonds eased to 4.02%.
Crude oil increased $0.26 to $72.55 a barrel, and natural gas prices decreased 4 cents to $2.44 a thermal unit.
Gold increased $2.17 to $2,029.15 an ounce and extended gains for the fourth day in a row after the dollar declined following the Fed's rate decision and announcement to cut rates several times over the next two years.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.46 and extended the previous week's loss of 1.4% and the loss of 0.9% in the year so far.
U.S. Stock Movers
Alphabet Inc. rose 0.4% to $136.30, and the company's Google agreed to settle charges brought by the U.S. states and consumers in a San Francisco federal court.
The settlement was disclosed on Monday and still needs approval from the judge. Google did not admit charges of unnecessary fees for app transactions and unlawful restrictions on apps on Android devices.
Google will pay $70 million in a fund for all 50 states, the District of Columbia, Virgin Island, and Puerto Rico, and $630 million in a fund for consumers.
Eligible customers of the Google Pay store will receive $2 and may receive additional payments depending on their spending between August 16, 2016 and September 30, 2023.
Google is facing other legal challenges regarding its digital advertising practices, search process, and results.
Nikola Corp. increased 3% to $0.84 after a court sentenced the company's founder, Trevor Milton, to four years in prison for making false and misleading statements to drive up investor interest.
Milton was also fined $1 million and sentenced to three years of supervised release.
Stocks fell 10% after the news in Monday's trading but rebounded in Tuesday's trading.
In October 2022, Milton was found guilty of two counts of wire fraud and one count of securities fraud and faced 60 years of imprisonment.
In 2021, the company agreed to settle civil charges brought by the U.S. Securities and Exchange Commission for $125 million.
U.S. Movers: Accenture, Alphabet, FactSet, Home Builders, IBM, Maersk, Nikola, Tesla, TSMC
Scott Peters
19 Dec, 2023
New York City
Alphabet Inc. rose 0.4% to $136.30, and the company's Google agreed to settle charges brought by the U.S. states and consumers in a San Francisco federal court.
The settlement was disclosed on Monday and still needs approval from the judge. Google did not admit charges of unnecessary fees for app transactions and unlawful restrictions on apps on Android devices.
Google will pay $70 million in a fund for all 50 states, the District of Columbia, Virgin Island, and Puerto Rico, and $630 million in a fund for consumers.
Eligible customers of the Google Pay store will receive $2 and may receive additional payments depending on their spending between August 16, 2016 and September 30, 2023.
Google is facing other legal challenges regarding its digital advertising practices, search process, and results.
Nikola Corp. increased 3% to $0.84 after a court sentenced the company's founder, Trevor Milton, to four years in prison for making false and misleading statements to drive up investor interest.
Milton was also fined $1 million and sentenced to three years of supervised release.
Nikola stock fell 10% after the news in Monday's trading but rebounded in Tuesday's trading.
In October 2022, Milton was found guilty of two counts of wire fraud and one count of securities fraud and faced 60 years of imprisonment.
In 2021, the company agreed to settle civil charges brought by the U.S. Securities and Exchange Commission for $125 million.
AP Moller Maersk AS decreased 2.9% to $8.64 after the company confirmed that it will begin to route ships headed to the Suez Canal via the Cape of Good Hope around South Africa as soon as possible because of rising drone attacks from Houthi militants along the Red Sea route.
Taiwan Semiconductor Manufacturing increased by 0.6% to $103.58, and Chairman Mark Liu plans to retire in 2024, and vice chairman and CEO C.C. Wei is likely to assume the role.
Liu joined TSMC in 2018 and took over the chairman's role after founder Morris Chang retired in June 2018.
Tesla gained 2.5% to $258.23, and the company, in an internal memo sent to employees at its battery factory in Sparks, Nevada, announced its plant would streamline pay grades and increase the hourly rate by at least 10%.
CNBC, the financial news television channel, first reported the news.
Tesla is hoping that the move will convince workers to avoid forming a union and push for collective bargaining.
Home builders traded higher after housing starts unexpectedly surged 14% in November from the previous month to an annual pace of 1.56 million units.
Toll Brothers increased 1.8% to $103.19, NVR gained 1.7% to $6,954.55, Lennar Corp. added 0.6% to $148.16, PulteGroup advanced 1.9% to $103.89, and KB Home added 2.5% to $61.84.
Accenture declined 0.2% to $341.20 after the management consulting and tech services provider reported better-than-expected quarterly earnings, but the company's guidance fell short of market expectations.
Revenue in the fiscal first quarter ending in November increased 3% to $16.2 billion from $15.74 billion, net income advanced to $2.0 billion from $1.99 billion, and diluted earnings per share rose to $3.10 from $3.08 a year ago.
During the quarter, the company repurchased 3.8 million shares for a total of $1.2 billion, and the company announced a quarterly cash dividend of $1.29 per share to shareholders on record on January 18 and payable on February 15.
The company estimated fiscal second quarter revenue between $15.40 billion and $16.0 billion, a decline of 2% to an increase of 2% in local currency, including a negative 0.5% foreign exchange impact compared to a year ago.
The company estimated its fiscal second quarter GAAP diluted earnings per share to range between $11.41 and $11.76, an increase of 6% to 9% from a year ago.
FactSet Research Systems decreased 0.3% to $457.17 after the financial information integration services provider lowered its annual outlook.
Revenue in the fiscal first quarter ending in November increased 7.4% to $542.2 million from $504.8 million, net income advanced to $148.5 million from $136.8 million, and diluted earnings per share rose to $3.84 from $3.52 a year ago.
IBM declined 0.5% to $161.89 after the company agreed to acquire two divisions focused on AI and enterprise services from Germany-based Software AG for $2.3 billion.
Europe Movers: Banks, Bayer, Covestro, Sodexo
Inga Muller
19 Dec, 2023
Frankfurt
European stock market indexes erased morning gains and lacked direction after eurozone inflation was confirmed at 2.4%, and the Bank of France said economic growth is expected to pick up over the next three years.
The DAX index increased 0.3% to 16,701.74, the CAC-40 index inched up 0.01% to 7,569.97, and the FTSE 100 index increased 0.1% to 7,621.92.
The yield on 10-year German bonds increased to 2.02%; French bonds held at 2.54%; the UK gilts inched higher to 3.66%; and Italian bonds inched lower to 3.70%.
Sodexo SA decreased 0.4% to €98.38, and the catering and food service group confirmed its plan to seek shareholder approval for the spinoff of Pluxee at the meeting on January 30, 2024.
Covestro AG increased 1.9% to €54.0 on reports that the Abu Dhabi National Oil Company is looking to increase its takeover offer for the German chemical company.
Bayer AG added 0.4% to €32.24 after a U.S. jury ordered the company's unit, Monsanto, to pay $857 million for toxic leaks at a school.
The company said it plans to appeal the decision.
Banks were in focus after the European Central Bank raised the capital requirement for non-performing loans at 20 banks without naming any banks.
Deutsche Bank decreased 0.4% to €11.94, and Commerzbank fell 0.4% to €10.43.
Societe Generale declined 0.9% to €23.99, UniCredit SpA increased 0.5% to €24.24, BNP Paribas fell 0.2% to €62.27, and Banco Santander eased 0.4% to €3.77.
Eurozone Inflation Confirmed at 2.4%, Economic Growth to Accelerate In France
Bridgette Randall
19 Dec, 2023
Frankfurt
European market indexes erased morning gains, and investors debated the future rate path and economic growth outlook for the next year.
Investors also digested the release of the consumer price index for the eurozone and the European Central Bank's directive for 20 banks to increase capital to cover potential losses from bad loans.
The yields on bond issues in the Euro Area held stable near a 9-month low, and the euro held its ground against the U.S. dollar.
Eurozone Inflation Confirmed at 2.4%
Consumer price inflation was confirmed to decrease by 0.5% from the previous month to 2.4% in November, Eurostat reported on Tuesday.
The inflation dropped to the lowest since July 2021 after service inflation eased to 4.0% from 4.6%, food, alcohol, and tobacco inflation slowed to 6.9% from 7.4%, and non-energy industrial goods inflation dropped to 2.9% from 3.5%.
Energy prices dropped 11.5% in November after falling 11.2% in the previous month.
Moreover, the statistical agency confirmed core inflation, which excludes food and energy prices, held at 3.6%, the lowest since April 2022.
Bank of France Estimated Economic Growth to Accelerate Over 3 Years
The Bank of France lowered its estimate of GDP growth slightly to 0.8% from 0.9% in 2023 and estimated a gradual acceleration in growth over the next three years.
GDP growth is expected to pick up to 0.9% next year and accelerate further to 1.3% in 2025 and 1.6% in 2026.
The latest announcement from the central bank of France suggested that the second-largest economy in the eurozone is likely to avoid a recession.
"This acceleration in 2026 assumes that the effects of recent shocks to the French economy—external tax shocks, tightening of monetary and financial conditions—will have abated by that time," the bank noted in the statement released Tuesday.
Overall inflation is expected to be 5.7% in 2023 but fall sharply to 2.5% in 2024, and both estimates were lowered by 0.1 percentage points from the September estimate.
Core inflation is expected to hold at 4% this year before easing to 2.5% next year and dropping to 2.2% in 2025.
The bank also revised higher jobless rates by 0.1 percentage points in 2023 and 2024.
The jobless rate is now estimated to increase to 7.6% next year from 7.3% this year.
Europe Indexes and Yields
The DAX index increased 0.3% to 16,701.74, the CAC-40 index inched up 0.01% to 7,569.97, and the FTSE 100 index increased 0.1% to 7,621.92.
The yield on 10-year German bonds increased to 2.02%; French bonds held at 2.54%; the UK gilts inched higher to 3.66%; and Italian bonds inched lower to 3.70%.
The euro traded higher to $1.094, the British pound inched higher to $1.269, and the U.S. dollar eased to 86.62 Swiss cents.
Brent crude decreased $0.36 to $77.59 a barrel, and the Dutch TTF natural gas decreased by €1.78 to €33.75 per MWh.
Europe Stock Movers
Sodexo SA decreased 0.4% to €98.38, and the catering and food service group confirmed its plan to seek shareholder approval for the spinoff of Pluxee at the meeting on January 30, 2024.
Covestro AG increased 1.9% to €54.0 on reports that the Abu Dhabi National Oil Company is looking to increase its takeover offer for the German chemical company.
Bayer AG added 0.4% to €32.24 after a U.S. jury ordered the company's unit, Monsanto, to pay $857 million for toxic leaks at a school.
The company said it plans to appeal the decision.
Banks were in focus after the European Central Bank raised the capital requirement for non-performing loans at 20 banks without naming any banks.
Deutsche Bank decreased 0.4% to €11.94, and Commerzbank fell 0.4% to €10.43.
Societe Generale declined 0.9% to €23.99, UniCredit SpA increased 0.5% to €24.24, BNP Paribas fell 0.2% to €62.27, and Banco Santander eased 0.4% to €3.77.
Movers: Apollo Tyres, Devyani Intnl, INOX India, Kaynes Technology, Nestle India, Sun Pharma, Vakrangee, Vedanta
Arun Goswami
19 Dec, 2023
Mumbai
Stocks in Mumbai traded down, and investors reacted to a flood of domestic corporate news.
The Sensex index decreased 168.07 points to 71,144.04, and the Nifty index fell 57.75 points to 21,360.25.
On the Mumbai stock exchange, 181 stocks traded at their 52-week highs and 8 stocks traded at their 52-week lows.
Nestle India decreased 0.3% to ₹24,300.0, and the company set January 5, 2024, as the record date for its 1-to-10 stock split.
Vedanta Ltd. advanced 1.6% to ₹264.45 after the company announced a second interim dividend of ₹11 per share, or ₹4,089 crore, to shareholders on record on December 27.
Sun Pharmaceutical Industries increased 0.4% to ₹1,259.40, and the company agreed to acquire a 16.7% stake in the U.S.-based clinical-stage biopharmaceutical company Lyndra Therapeutics for $30 million.
Zee Entertainment Enterprises increased 1.1% to ₹281.10, and Sony India is not likely to accept the company's request to extend its merger deadline.
Apollo Tyres rose 3.1% to ₹464.50, and a Bloomberg report suggested that an affiliate of Warburg Pincus is looking to sell a 3% stake in the company for $100 million with a floor price of ₹440 per share.
Devyani International gained 7.5% to ₹196.50 after the company acquired 274 KFC stores in Thailand for ₹1,066.10 crore and approved an investment of 340 crore in its international markets-focused subsidiary, Devyani DMCC, Dubai.
Vakrangee Limited gained 0.5% to ₹19.40 after the company agreed to acquire 8.8% of Vortex Engineering from the International Finance Corporation.
Kaynes Technology India Limited rose 4.5% to ₹2,728.20 after the company launched an institutional offering to raise ₹1,400 crore at an offer price of ₹2,444 per share.
PNC Infratech jumped 2.4% to ₹351.0 after the company won a toll road project worth 1,174 crore from the road development authority in Madhya Pradesh.
INOX India, the maker of cryogenic storage and distribution equipment, had its initial public offering subscribed 61 times on the final day of subscription.
The offer price range is between ₹627 and ₹660 per share, and the institutional portion was subscribed to 148 times and the retail investment portion was subscribed to 15 times.
Annual revenue in the fiscal year ending in March 2023 increased to ₹984.20 crore, net income advanced to ₹152.71 crore, and diluted earnings per share rose to ₹16.83.
Nifty and Sensex Indexes Turned Lower, BoJ Left Rates Unrevised
Arjun Pandit
19 Dec, 2023
Mumbai
Stocks in Mumbai traded higher, and investors reacted to domestic corporate news.
Benchmark stock indexes edged slightly higher as investors stayed optimistic about the economic growth prospects and steady flow of funds from domestic and international investors.
The Bank of Japan held its short-term rate at -0.1% and 10-year bond yields near zero percent in a unanimous vote in the final meeting of the year.
The rate decision was widely anticipated, and the policy committee also held its loose upper band of 1% set for the long-term government bond yield.
Japan is the only major advanced country with interest rates near zero, despite the central banks in the U.S. and Europe lifting rates by as much as 500 basis points over the last eighteen months.
The Japanese yen edged up 0.5% to 143.46 after the rate decision announcement.
The Nikkei index in Tokyo advanced 1%, but the Hang Seng index in Hong Kong declined 0.6% on the ongoing property market worries.
Shanghai Composite index is set to close lower for the third year in a row and the Hong Kong index is likely to extend losses to the fourth consecutive year.
Electric vehicle maker Nio jumped 4.7% after the company secured an additional investment of $2.2 billion from funds controlled by the Abu Dhabi Investment Authority, following the earlier investment of $738 million in June.
Authorities on the mainland China also grappled with an earthquake in the Gansu-Qinghai border region.
A 6.2-magnitude earthquake struck the northwestern Chinese province late last night, killing at least 110 people and injuring more than 230.
India Indexes and Yields
The Sensex index decreased 168.07 points to 71,144.04, and the Nifty index fell 57.75 points to 21,360.25.
On the Mumbai stock exchange, 181 stocks traded at their 52-week highs and 8 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds held firm at 7.16%, and the Indian rupee hovered near ₹82.10 against the U.S. dollar.
The gold price decreased by 0.2% to ₹61,965 per ten grams, and silver edged down by 0.01% to ₹74,405 per kilo.
Crude oil increased by 2.1% to ₹6,138 per barrel, and natural gas fell by 0.1% to ₹207.20 per thermal unit.
India Stock Movers
Nestle India decreased 0.3% to ₹24,300.0, and the company set January 5, 2024, as the record date for its 1-to-10 stock split.
Vedanta Ltd. advanced 1.6% to ₹264.45 after the company announced a second interim dividend of ₹11 per share, or ₹4,089 crore, to shareholders on record on December 27.
Sun Pharmaceutical Industries increased 0.4% to ₹1,259.40, and the company agreed to acquire a 16.7% stake in the U.S.-based clinical-stage biopharmaceutical company Lyndra Therapeutics for $30 million.
Zee Entertainment Enterprises increased 1.1% to ₹281.10, and Sony India is not likely to accept the company's request to extend its merger deadline.
Apollo Tyres rose 3.1% to ₹464.50, and a Bloomberg report suggested that an affiliate of Warburg Pincus is looking to sell a 3% stake in the company for $100 million with a floor price of ₹440 per share.
Devyani International gained 7.5% to ₹196.50 after the company acquired 274 KFC stores in Thailand for ₹1,066.10 crore and approved an investment of 340 crore in its international markets-focused subsidiary, Devyani DMCC, Dubai.
Vakrangee Limited gained 0.5% to ₹19.40 after the company agreed to acquire 8.8% of Vortex Engineering from the International Finance Corporation.
S&P 500 and Nasdaq Composite Extend Gains, 10-year Treasury Yield Approach 5-month Low
Barry Adams
18 Dec, 2023
New York City
U.S. market indexes advanced in Monday's trading, and Treasury yields hovered near 5-month lows.
U.S. benchmark indexes traded higher and extended their gains from the previous week, despite policymakers stressing caution against rate-cut optimism in the near future.
The S&P 500 index and the Nasdaq Composite advanced more than 0.5% despite cautious comments from policymakers across the Atlantic on rate outlooks.
Policymakers ramped up comments to push back market enthusiasm about possible rate cuts as early as March 2024 and stressed that inflation is still too high and talks of rate cuts are premature.
Federal Reserve Bank of Chicago president Austan Goolsbee said in an interview with CBS on Sunday that it is too early to declare victory over inflation and that interest rate decisions would depend on incoming data.
Investors have stepped up bidding for stocks, and the broader S&P 500 index is up 3.3% in December, and the Nasdaq is ahead by 4.1%.
Market sentiment was bolstered last week after the Federal Reserve suggested that three rate cuts totaling 75 basis points are likely in 2024.
Despite the pushback from policymakers on Friday and over the weekend, market enthusiasm for stocks pushed benchmark indexes higher.
Cooling inflation, slowing but steady economic growth, and higher-than-expected job gains are expected to contribute to consumer spending resilience and corporate earnings growth.
U.S. Indexes and Yields
The S&P 500 index gained 0.5% to 4,743.75, and the Nasdaq Composite increased 0.5% to 14,892.75.
The yield on 2-year Treasury notes increased to 4.43%, 10-year Treasury notes inched lower to 3.90%, and 30-year Treasury bonds eased to 4.01%.
Crude oil increased $1.70 to $73.13 a barrel, and natural gas prices increased 8 cents to $2.57 a thermal unit.
Gold increased $3.30 to $2,021.98 an ounce and extended gains for the third day in a row after the dollar declined following the Fed's rate decision and announcement to cut rates several times over the next two years.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.57 and extended the previous week's loss of 1.4% and the loss of 0.9% in the year so far.
U.S. Stock Movers
U.S. Steel Corporation surged 28.2% to $50.33 after the steelmaker accepted the $55 per share offer from Japan-based Nippon Steel in cash.
The offer values the steel company at $14.9 billion in enterprise value, and the deal is expected to close in the second or third quarter of 2024.
Southwest Airlines declined 0.4% to $28.90, and the company reached a $140 million agreement, including a $35 million fine.
The fourth-largest U.S. airline by revenue settled a federal investigation for thousands of flight cancellations and stranding 2 million passengers after heavy snowstorms in Denver and Chicago in December 2022.
The U.S. Department of Transportation said the total charges are the largest it has ever imposed on an airline for violating consumer protection laws.
Before the government's assessment, Southwest said that the reservation system meltdown cost the airline about $1.1 billion in refunds, reimbursements, lost revenue over several months, and additional costs.
SunPower Corp. plunged 35.1% to $3.99 after the company said in a regulatory filing that it is in technical violation of an agreement with a lender for $65.3 million after it failed to file its third quarter results in time.
The company is in negotiation with the lender, but if a waiver is not granted, the company may not have enough cash available for its daily operations.
European Markets Turned Lower, Policymakers Stressed Caution On Rate Cuts Expectations
European markets struggled to advance in Monday's trading, and bond yields hovered near 9-month lows in the region.
Benchmark indexes in Frankfurt, Paris, and London edged lower after cautious comments from Fed and ECB policymakers on rate outlooks.
Policymakers ramped up comments to push back market enthusiasm about possible sooner-than-expected rate cuts as early as March 2024 and stressed that inflation is still too high.
European Central Bank Governing Council member and president of Bundesbank Joachim Nagel said Friday that the central bank has probably concluded its hiking stance, but it's still too early to talk about lower borrowing costs.
Members of the European Central Bank, Philip Lane and Isabel Schnabel are expected to offer their opinions later in the day.
Deputy Governor of the Bank of England Ben Broadbent, in a speech, highlighted the difficulty of collecting reliable economic data and focused on substantial GDP growth revisions in the 1980s and the current challenges in wage growth data series.
"In particular, official estimates of average wages have been volatile and, in the spring and summer of this year, exhibited somewhat faster growth than other indicators," Broadbent noted in a speech delivered to the London Business School on Monday.
New York Fed president John C. Williams said talks of rate cuts as early as March seem premature, tempering market bets on imminent rate cuts.
Federal Reserve Bank of Chicago president Austan Goolsbee said in an interview with CBS on Sunday that it is too early to declare victory over inflation and that interest rate decisions would depend on incoming data.
Closer to the region, the Ifo Business Climate indicator for Germany unexpectedly fell to a three-month low of 86.4 in December from the downwardly revised 87.2 in November.
The business mood soured due to the current business conditions and business prospects in the upcoming months.
Europe Indexes and Yields
The DAX index decreased 0.6% to 16,650.55, the CAC-40 index eased 0.4% to 7,568.86, and the FTSE 100 index increased 0.5% to 7,614.48.
Bond yields in the eurozone hovered near nine-month lows after the European Central Bank and the Bank of England held their interest rates steady on Thursday.
The yield on 10-year German bonds decreased to 2.01%; French bonds traded lower to 2.54%; the UK gilts eased to 3.64%; and Italian bonds inched lower to 3.71%.
The euro traded higher to $1.092, the British pound inched higher to $1.268, and the U.S. dollar eased to 86.82 Swiss cents.
Brent crude increased $2.13 to $78.67 a barrel, and the Dutch TTF natural gas increased by €2.21 to €35.40 per MWh.
Europe Stock Movers
Vodafone Group plc increased 6.4% to 68.88 pence after the iliad Group proposed to merge its Italian business with Vodafone Italia.
The proposal valued Vodafone Italia at €10.45 billion, and Vodafone would obtain 50% of the share capital of NewCo, together with a €6.5 billion cash payment and a €2.0 billion shareholder loan to ensure long-term alignment.
The proposal valued Iliad Italia at €4.45 billion. Iliad would obtain 50% of the share capital of NewCo, together with a €500 million cash payment and a €2.0 billion shareholder loan.
Vodafone’s equity in NewCo at closing was valued at €1.95 billion.
Iliad said that the current proposal values the company at 7.8 times operating earnings, higher than the 7.1 times previously proposed in February 2022.
CRH plc declined 0.5% to 5,280.0 pence after the company partnered with Barro Group to acquire Australian cement manufacturing company Adbri.
The proposal values the Australian company at A$2.1 billion, a 41% premium from the previous closing price.
Barro Group and its associates currently own 42.7% of the company.
Unilever plc decreased 0.08% to 3,752.50 pence after the consumer products company said it agreed to sell its Q-Tips maker Elida Beauty for an undisclosed amount to Boston-based private equity firm Yellow Wood.
Thyssenkrupp Nucera gained 2.4% to €16.40 after the company swung in the fiscal fourth quarter to a net income of €4.3 million compared to a loss of €1.2 million in the previous year.
Software AG added 1.2% to €32.32 after IBM agreed to acquire the company's enterprise tech business for €2.13 billion in cash.
U.S. Movers: Adobe, Anheuser Busch, Illumina, Southwest Airlines, U.S. Steel
Scott Peters
18 Dec, 2023
New York City
U.S. Steel Corporation surged 28.2% to $50.33 after the steelmaker accepted the $55 per share offer from Japan-based Nippon Steel in cash.
The offer values the steel company at $14.9 billion in enterprise value, and the deal is expected to close in the second or third quarter of 2024.
Southwest Airlines declined 0.4% to $28.90, and the company reached a $140 million agreement, including a $35 million fine.
The fourth-largest U.S. airline by revenue settled a federal investigation for thousands of flight cancellations and stranding 2 million passengers after heavy snowstorms in Denver and Chicago in December 2022.
The U.S. Department of Transportation said the total charges are the largest it has ever imposed on an airline for violating consumer protection laws.
Before the government's assessment, Southwest said that the reservation system meltdown cost the airline about $1.1 billion in refunds, reimbursements, lost revenue over several months, and additional costs.
Anheuser Busch InBev increased 0.4% to $62.75 and the union representing workers called for a strike if wage negotiations fail.
The International Brotherhood of Teamsters said in a press release that its members working at Anheuser-Busch plants in the U.S. have voted by 99% to authorize a strike if company fails to provide a strong contract.
The current agreement is scheduled to expire on February 29, 2024, and the union representing 5,000 members working at 12 plants is seeking higher wages, stronger job security, and expanded healthcare and retirement benefits.
Illumina, Inc. rose 4.6% to $133.0 after the San Diego-based biotech company said it plans to divest its acquisition of cancer screening company Grail.
Illumina faced an uphill task in convincing regulators after an appeals court ruled on Friday that the $7 billion merger could violate antitrust laws.
Earlier in October, the antitrust regulatory agency of the European Union also slapped the company with a fine of $475 million for completing the merger before receiving its consent.
The company said it plans to sell the company to a third party or complete a public offering before the end of 2024.
Adobe increased 2% to $595.50 after the company and Figma said they plan to cancel their $20 billion merger plan, citing regulatory hurdles.
U.S. Major Averages Trend Higher Overlooking Cautious Comments from Policymakers
Barry Adams
18 Dec, 2023
New York City
U.S. benchmark indexes edged higher and extended their gains from the previous week, and the dollar index continued to drift lower.
The S&P 500 index and the Nasdaq Composite advanced despite cautious comments from policymakers across the Atlantic on rate outlooks.
Policymakers ramped up comments to push back market enthusiasm about possible sooner-than-expected rate cuts as early as March 2024 and stressed that inflation is still too high.
New York Fed president John C. Williams said talks of rate cuts as early as March seem premature, tempering market bets on imminent rate cuts.
Federal Reserve Bank of Chicago president Austan Goolsbee said in an interview with CBS on Sunday that it is too early to declare victory over inflation and that interest rate decisions would depend on incoming data.
European Central Bank Governing Council member and president of Bundesbank Joachim Nagel said Friday that the central bank has probably concluded its hiking stance, but it's still too early to talk about lower borrowing costs.
Members of the European Central Bank, Philip Lane and Isabel Schnabel, as well as Governor of the Bank of England Ben Broadbent, are anticipated to share their opinions later in the day.
Investors have stepped up bidding for stocks, and the broader S&P 500 index is up 3.3% in December, and the Nasdaq is ahead by 4.1%.
Market sentiment was bolstered last week after the Federal Reserve suggested that three rate cuts totaling 75 basis points are likely in 2024.
Despite the pushback from policymakers on Friday and over the weekend, market enthusiasm for stocks remained.
Cooling inflation, slowing but steady economic growth, and higher-than-expected job gains are expected to contribute to consumer spending resilience and corporate earnings growth.
U.S. Indexes and Yields
The S&P 500 index gained 0.2% to 4,772.23, and the Nasdaq Composite increased 0.09% to 14,683.15.
The yield on 2-year Treasury notes increased to 4.43%, 10-year Treasury notes inched lower to 3.90%, and 30-year Treasury bonds eased to 4.01%.
Crude oil increased $0.70 to $72.12 a barrel, and natural gas prices increased 8 cents to $2.57 a thermal unit.
Gold increased $3.30 to $2,021.98 an ounce and extended gains for the third day in a row after the dollar declined following the Fed's rate decision and announcement to cut rates several times over the next two years.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.57 and extended the previous week's loss of 1.4% and the loss of 0.9% in the year so far.
U.S. Stock Movers
U.S. Steel Corporation surged 28.2% to $50.33 after the steelmaker accepted the $55 per share offer from Japan-based Nippon Steel in cash.
The offer values the steel company at $14.9 billion in enterprise value, and the deal is expected to close in the second or third quarter of 2024.
Southwest Airlines declined 0.4% to $28.90, and the company reached a $140 million agreement, including a $35 million fine.
The fourth-largest U.S. airline by revenue settled a federal investigation for thousands of flight cancellations and stranding 2 million passengers after heavy snowstorms in Denver and Chicago in December 2022.
The U.S. Department of Transportation said the total charges are the largest it has ever imposed on an airline for violating consumer protection laws.
Before the government's assessment, Southwest said that the reservation system meltdown cost the airline about $1.1 billion in refunds, reimbursements, lost revenue over several months, and additional costs.