An M&A Activity Boost Calms Investors’ Fears

By An M&A Activity Boost Calms Investors’ Fears

Financial markets seem to be locked in an epic tug of war between fears of war and optimism due to frenetic merger & acquisition activity.

The week looked like it was off to a rough start…

The White House imposed new sanctions against Russia, adding seven high-profile Russians and 17 companies to the list. All parties included in the new sanctions are banned from entering the United States.

Vladimir Putin certainly doesn’t like to see his friends picked on, so the Russian president has threatened to retaliate against this form of financial warfare.

Geopolitical stresses weren’t the only problem, as the Federal Reserve’s bank “stress tests” made a reappearance in the headlines.

Remember when Bank of America (BAC) announced that dividend raise after getting the green light from the Fed? Well, there’s a problem…

After finding an accounting error, the bank declared that it put dividend hike – as well as the stock buyback program – on hold. The news sent its shares down by more than 6%.

Not to worry, though. Corporate deal-making stoked stock market optimism…

Jeff Immelt, General Electric’s (GE) CEO, talked up the merits of a $13-million buyout of Alstom during his trip to France. Germany’s Siemens (SI) may even throw its hat in the ring soon, creating a potential bidding war for the French power generation and transportation conglomerate.

Meanwhile, healthcare M&A activity continues to be on fire…

Analysts say that Pfizer (PFE) has to beat $100 billion if it wants to get its hands on Britain’s AstraZeneca. Its second proposal was turned down.

The markets responded well to Pfizer, as it reigned as one of the S&P 500’s best performers. AstraZeneca’s U.K.-listed shares have jumped nearly 15% since Pfizer’s interest made headlines.

After submitting a $1.5-billion proposal to buy Furiex Pharmaceuticals (FURX) , Forest Labs’ (FRX) stock slipped a little, while the FURX stock had 28.6% jump after the offer.

Concerning other deals…

Charter Communications (CHTR) put in an offer for Time Warner Cable (TWC), but Comcast (CMCSA) beat it to the punch. Comcast agreed to a $7.3-billion, cash-for-subscriber swap with Charter Communications. So in the end, all three businesses made out nicely.

On Monday alone, companies announced more than $150 billion in deals. So what exactly is behind all of this corporate activity? James Lockhart, Vice Chairman of WL Ross & Company, has an idea:

“There’s a lot of cash sitting on corporate balance sheets at the moment, some of which is trapped offshore/in the U.S. They are looking to put that cash to work and acquisitions are one way. The GE deal. There’s a whole series of big ones happening at the moment. Animal spirits are coming back.” 

So, the corporate deal-making floodgates are open, while Russian oligarchs’ accounts are frozen. Interesting times.

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Kenya holds rate as stance credible despite inflation rise

    Kenya’s central bank held its Central Bank Rate (CBR) steady at 8.50 percent, saying the monetary policy path is continuing to anchor inflationary expectations and remains credible despite the slight rise headline inflation in April.
    The Central Bank of Kenya (CBK), which has maintained its rate since May 2013 after cutting it by 250 basis points in the first months of the year, added that the exchange rate of the shilling continued to fluctuate within a narrow range in April, helped by a rise in diaspora remittances due to a strengthening global economy which also helped boost foreign exchange reserves.
    Remittances from workers abroad rose to their highest level so far to US$ 119.59 million in March, up from $110.42 million in February, helping moderate the impact of foreign investors’ participation in the stock exchange, where the main index rose by 0.25 percent in March, the bank said.
    Overall confidence in Kenya’s economy remains strong, the bank said, with the bank’s market perception survey in April showing that the private sector expects strong growth this year with inflation and the exchange rate stable for the rest of the year.

    Kenya’s headline inflation rate rose to 6.41 percent in April form 6.27 percent in March was largely due to higher transport costs, the bank said. The measure of non-food-non-fuel inflation, a more direct gauge of the CBK’s policy, eased to 4.53 percent from 4.98 percent in the same period.
    Last year Kenya’s consumer prices rose by 5.7 percent and the International Monetary Fund forecasts 6.6 percent inflation this year and 5.5 percent in 2015. The CBK targets inflation of 5.0 percent, within a 2.5 percentage point range.
    Kenya’s usable foreign exchange reserves rose to $6.339 billion at the end of April, the equivalent of 4.37 months of imports, from $6.213 billion end-March.
    Kenya’s shilling has been weakening since October 2013 but is down only 0.70 percent against the U.S. dollar this year, trading at 87.05 to the dollar today.
    The CBK added that the government’s domestic borrowing program in the current fiscal year was consistent with the medium-term debt strategy and it has taken note of increased investor appetite for longer-dated domestic debt instruments that has helped lower refinancing risks.
    Kenya’s banking sector remains solvent and resilient, based on the latest stress tests, with annual growth in private sector of 22.66 percent in March, up from 21.46 percent in February, but the CBK said it was monitoring this growth to ensure it doesn’t trigger any demand inflation pressure or adverse inflationary expectations.
    The ratio of non-performing loans to gross loans fell to 5.6 percent in March from 5.8 percent in February, with the combination of declining credit risk and rising private sector growth helping support private investment and growth, the bank said.
    Kenya’s Gross Domestic Product expanded by 1.6 percent in the third quarter of 2013 from the second quarter and the International Monetary Fund has estimated full-year growth of 5.6 percent. This year the IMF forecast growth rising to 6.3 percent and the same rate in 2015.


GBPUSD: Can GBP Break Above The 1.3857/77 Levels?

GBPUSD: Although closing marginally higher on Tuesday and struggling to strengthen further, downside threat remains while holding below the 1.6857/77 levels. The big question is can GBP break and hold above that zone. It is tough to break with poor price action on the upside but if it does break that area expect a run at the 1.6900 level to occur. A violation will target the 1.6950 level and then its big psycho level at the 1.7000 level. Its daily RSI is bullish and pointing higher suggesting further strength. On the downside, support lies at the 1.6762 level where a break will turn focus to the 1.6719 level where a violation will aim at the 1.6683 level. A cut through here if seen will allow further downside towards the 1.6600 level. On the whole, GBP continues to retain its upside bias but faces pullback risks.

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Stocks Market Report 30th April

By HY Markets Forex Blog

Stocks – Europe

Stocks in Europe opened lower on Wednesday as investors focus on the release of consumer prices reports from the eurozone.

The European Euro Stoxx 50 edged 0.38% lower opening at 3,196.61, while the German DAX lost 0.10% trading at 9,574.77 at the time of writing. At the same time the French CAC 40 dropped 0.31% lower to 4,483.94, while the UK’s benchmark FTSE 100 fell 0.12% to 6,761.82.

Eurozone CPI

Reports showed that the economic confidence in the eurozone dropped lower than expected in April, while the final consumer confidence came in at minus 8.6.

Meanwhile in the UK, the nation’s gross domestic product rose to 0.8% in the first quarter, according to reports from the Office for National Statistics.

Economic reports

In Germany, the country’s retail sales dropped to 0.7% in March on a monthly basis, slightly rising from the revised figure of 0.4% and came in at 1.9% on a yearly basis, according to reports from the Federal Statistical Office.

The economic growth for Spain climbed to 0.4% in the first quarter, while a 0.6% was reported on a yearly basis.

Stocks – Asia

In Asia, stocks were seen trading mixed on Wednesday as investors awaits key central bank reports, which is expected to be released later in the day while the US Federal Reserve will be concluding its two-day policy meeting.

The Japanese benchmark Nikkei 225 index edged 0.66% to 14,382.16 points, while Tokyo’s Topix gauge climbed 0.58% to 1,167.42 points.

In China, Hong Kong’s Hang Seng index dropped 0.37% lower to 22,371.00 points at the time of writing, at the same time China’s mainland benchmark Shanghai Composite slid 0.03% to 2,019.78 points.

South Korea’s benchmark Kospi index edged 0.4% higher at 1,972.56 points.

Fed Meeting

Investors will be focusing on the outcome of the Federal Reserve two-day monthly policy meeting which will be ending today, with predictions that the Federal Reserve will announce another cut to its stimulus for the fourth time in a row to $45 billion.


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Crude Prices Extends Losses as Stockpiles Rises

By HY Markets Forex Blog

Crude prices were seen trading lower on Wednesday, as it heads for a second monthly drop on speculation that crude inventories was at an 83-year high and after crude prices reached the $102 level on Thursday.

The North American West Texas Intermediate (WTI) crude for June delivery edged 0.81% at $100.46 a barrel on the New York Mercantile Exchange at the time of writing. At the same time, futures for the European benchmark Brent crude for June settlement traded $100.82 lower per barrel on the ICE Future Europe exchange.

Crude Supplies

Crude supplies in the US, the world’s biggest oil consumer; rose  2.2 million barrels to 399.9 million in the last week, the highest level since May 1931, reports from the US Energy Information Administration showed.

Reports from the American Petroleum Institute showed that US crude stockpiles at Cushing, Oklahoma, the delivery point for New York futures, climbed by 202,000 barrels last week.


Earlier this week Russia; the biggest energy exporter in the world, was imposed with new sanctions by the US and the European Union as Russian President Vladimir Putin warned that the new sanctions may lead to Russia to reconsider participation with companies in the US and the European Union in the energy sector and other key industries.

Officials from the EU, the US, Russia and Ukraine signed an agreement on April 17 in Geneva to ease tensions in Ukraine; however the agreement has been ignored as tensions between nations escalates.


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HY MARKETS News: Forex Report: AUD/USD

By HY Markets Forex Blog

AUD/USD is currently trading close to the strong support zone surrounding the support level 0.9250. This support zone is strengthened by the lower support trendline of the daily up channel from January (which has enclosed the preceding primary corrective wave ②), the 38.2% Fibonacci Correction of the earlier upward (C)-wave and 200-day moving average.

If AUD/USD reverses up from this support zone it can be expected to rise to the next buy target at 0.9440. Alternatively, if the pair breaks below 0.9250, it can fall further to 0.9140.


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GBPUSD Forex Trading Pivot Point Levels for 2014.04.30

2014.04.30 12:30 6:30AM ET | GBPUSD Currency Pair

SC GBPUSD 2014.04.30

Here are the Pivot Points Levels with Support (S) and Resistance (R) for the GBPUSD currency pair today. Price action is currently trading under the daily pivot point at the 1.68162 price level, according to data at 6:30 AM ET. The GBPUSD high for the day has been 1.68284 while the low of day has reached to 1.68058. The pair earlier today opened the Asian trading session slightly above the daily pivot and has trended lower into the North American morning.

Daily Pivot Point: 1.68210
— S1 – 1.67962
— S2 – 1.67667
— S3 – 1.67419
— R1 – 1.68505
— R2 – 1.68753
— R3 – 1.69048

Weekly Pivot Points: GBPUSD

SC GBPUSD 2014.04.30

Prices are currently trading over the weekly pivot point at time of writing. The GBPUSD has been on an overall modest bullish trend this week after opening the trading week virtually on top of the weekly pivot.

Weekly Pivot Point: 1.67980
— S1 – 1.67575
— S2 – 1.67206
— S3 – 1.66801
— R1 – 1.68349
— R2 – 1.68754
— R3 – 1.69123

By – Forex Trading Apps & Currency Trade Tools

Disclaimer: Foreign Currency trading and trading on margin carries a high level of risk and volatility and can result in loss of part or all of your investment. All information and opinions contained do not constitute investment advice and accuracy of prices, charts, calculations cannot be guaranteed.





HY MARKETS News: Commodities Report: Light Sweet Crude Oil (WTI)

By HY Markets Forex Blog

WTI is currently approaching the sell target 100.00 that was set in our earlier report for this instrument. The price recently broke the lower support trendline of the wide daily up channel from the start of this year. This was followed by one unsuccessful attempt to break back into this up channel (as you can see below).

The nearest price action close to 100.00 will determine how WTI will move in the coming sessions. If Light Sweet Crude Oil fails to break below 100.00 – it can retest the resistance at 102.00. If WTI breaks below 100.00 – expect it to fall to the next sell target at 97.30.


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HY MARKETS News: Index Report: S&P 500

By HY Markets Forex Blog

S&P 500 recently corrected strongly down after nearly reaching the buy target 1900.00 that was set in our previous report for this index. The latest downward correction from this resistance level stopped at the precise level of the 50% Fibonacci Correction of the preceding sharp upward impulse from the start of February.

The subsequent minor upward impulse wave 1 broke above the resistance level 1850.00. The latest minor corrective wave 2 reversed up from 1850.00 (acting as support now). S&P 500 is expected to rise to the nearest buy target 1900.00.



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HY MARKETS News: Stocks Report: Apple Inc

By HY Markets Forex Blog

Apple recently rose sharply above the buy target 550.00 that was set in our previous technical analysis report for this company. The breakout of this buy target was preceded by the breakout of the daily down channel which has enclosed the earlier intermediate correction (2).

The breakout of 550.00 coincided with the breakout of the upper resistance trendline of the daily Triangle from December of last year and led to the breakout of the major resistance 570.00 (top of earlier primary wave ①). Apple is set to rise to the next buy target 600.00 – followed by 620.00.



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