Volkswagen up 12% MoM

Today’s Topic:

• Bulls take over the Markets
• Volkswagen up 12% MoM
• Uber grows its debt

Opening at the 13’156 point mark the German Index advanced to 13’200 point mark in the afternoon and follows the general trend on the Markets. Just before close only 4 stocks ( Infineon, SAP; Fresenius and Vonovia) are quoting negative ticks. The markets have profited from the tax reform advancements and couldn’t even be shaken by the nuclear missile test in North-Korea. Volkswagen takes the spot number one for the second time in a week with a 3% increase. The German carmaker went from 172,75 Euro to 175,75 Euro and is up 12% on a MoM comparison. Volkswagens Price jumped as a reaction to the 3,82 percent increase in Sales. “All brands have most recently developed strongly,” Mueller (Volkswagen CEO) said on Wednesday at a staff gathering in Wolfsburg. “And I trust that also the two remaining months will confirm the strong trend. And that we will be able to finish the year 2017 on a new record.”

After limping into the post-Thanksgiving weekend session with a mixed-to-lower showing on Monday, the bulls had the momentum back yesterday. On point, Wall Street started the latest trading day with solid gains and then proceeded to press forward with nary a hiccup for the remainder of the session. True, there was a rapid pullback early yesterday afternoon on news that North Korea had fired a missile into the waters off the coast of Japan. That headline event sent the Dow Jones Industrial Average, once up by more than 190 points, back down to less than a 100-point advance. However, that selloff, was just a brief affair with the market regaining its footing shortly thereafter. Then, the same forces that had sent stocks soaring at the open were back in play for the balance of the day. In other news, the economy continues to show enviable strength, with data on new home sales showing a strong gain for October in a release on Monday and a survey on consumer confidence, issued by the Conference Board yesterday morning surging to its highest level in 17 years. That one-two punch suggests that the nation’s gross domestic product will advance by 3%, or more, in the current period.  The market’s comeback yesterday suggests that the shock effect of news out of North Korea is less than it had been in months past. Indeed, stocks rather quickly regained all of their gains from earlier in the day. In all, the three major composites, the Dow, the S&P 500, and the NASDAQ all had reached all-time highs in the morning. Then, the earlier nominated Jerome Powell–to be Federal Reserve Chair–turned out positive for the Street as he implied that his accession would result in few central bank changes. In sum, he suggested that he would keep the current slow tightening rate policy intact. Then, in the final hour, the bulls received more good news as the Senate took a step toward passing a bill aimed at reforming the U.S. tax code, as the Senate Budget Committee approved its tax plan, bringing the full Senate closer to a floor vote that may take place as early as tomorrow. With that news in hand, the Dow’s gain surged past 250 points. It would seem that a tax package will pass either late this year or in 2018. As the final bell sounded, the Dow was up 256 points; the S&P 500 was ahead 26 points; and the NASDAQ was better by 34 points.

In other news, Linde plc announced today that 92% of the ordinary shares of Linde AG entitled to voting rights were tendered by the end of the additional acceptance period of Linde plc’s exchange offer on November 24, 2017. The tender process has been completed and no further Linde AG shares can be tendered in the exchange offer. The business combination remains subject to the receipt of certain antitrust and other regulatory approvals and is expected to be completed in the second half of 2018.

Following the disclosure that over 57 million Uber driver and rider accounts were hacked, exposing sensitive, personal information, the National Limousine Association (NLA) is calling for Uber to halt its operations and on Congress to formally investigate the incident. While the scope of the breach is still not fully known, the NLA warns the public that this information most likely goes well beyond typical credit card exposure seen in many retail hacks. Insiders have confirmed with Reuters that Uber has increased its Debt to 1,46 billion USD.

Today’s Economic Calendar:

• MBA Mortgage Applications
• Janet Yellen Speech
• GDP
• Pending Home Sales Index
• EIA Petroleum Status

 

European shares brush off German Governement worries

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