Category: Merkel

European shares brush off German Governement worries

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Today’s Overview:

  • European shares brush off German Governement worries
  • Volkswagen raises mid-term outlook for group profits
  • Wall Street takes off ahead of Thanks-Giving week
  • Marvell M&A
  • EBA moves to Paris

After the failed Jamaica-Coalition talks the German DAX and Gold tumbled down to 12945 and 1276 respectively. The shock was short-lived and the Index move up to the 13030 in the afternoon, finally closing at the 13060 mark. The big movers in the German market were Volkswagen rallying up 2,78% and RWE incurring a loss of 1,58%. Volkswagen raised its mid-term outlook for group profit and sales on Monday, sustaining investor hopes that the carmaker can further its recovery despite shouldering billions of costs for its electric-car offensive. The world’s largest automaker by sales announced on Friday more than 34 billion euros ($40.06 billion) of spending on zero-emission cars and digital mobility services by the end of 2022, revising up an investment pledge for more than 20 billion euros made in September. VW said rebounding emerging markets such as Brazil and Russia and demand for new VW-badged sport-utility vehicles (SUVs) may together lead group revenue to exceed the 2016 record of 217 billion euros by more than a quarter by 2020. On Monday evening German chancellor Angela Merkel said she would prefer fresh elections to ruling with a minority government after talks on forming the three-way coalition collapsed. This resulted the DAX to open on the lower-end and the Euro Sterling to reach an 8-day low.

Wall Street managed to make some progress yesterday, as they commenced a new week. At the close of trading, the Dow Jones Industrial Average was ahead roughly 72 points; the broader S&P 500 Index was up three points; and the technology heavy NASDAQ was higher by nearly eight points. Market breadth was positive, with winners ahead of losers on the NYSE. From a sector perspective, the industrials and the technology issues pressed ahead, while the energy and utility names retreated. Meanwhile, there was just one notable economic report released this morning. Specifically, the Index of Economic Indicators advanced 1.2% in the month of October, which was quite a bit better than had been widely anticipated. Tomorrow, existing homes sales for the month of October are due to be released. Technically, the stock market has been holding up reasonably well lately. Looking ahead, with the year drawing to a close, it remains to be seen if the bulls can find the strength to produce a holiday rally.

In further news the Chipmaker Marvell Technology Group Ltd said on Monday it would buy smaller rival Cavium Inc  for about $6 billion, as it seeks to expand its wireless connectivity business in a rapidly consolidating semiconductor industry. Shares of Marvell were down 0.8 percent to $20.14, while Cavium was up 7 percent at $81.14 in early trading.

The European Union is relocating two of its key agencies from London to Amsterdam and Paris post-Brexit. On Monday, the EU announced that the European Banking Authority (EBA) will be moving to Paris an early sign of the potential costs for the United Kingdom of leaving the political and economic union.

Todays Earnings Calendar:

  • GameStop Corp.
  • Guess? Inc.
  • HP Inc.

Todays Economic Calendar:

  • Chicago Fed National Activity Index
  • Existing Home Sales