M&A ac­tiv­i­ties drive eq­ui­ties, fo­cus shifts to earn­ings

Financial Mirror (Cyprus) - - FRONT PAGE -

hinges on the Fed­eral Com­mu­ni­ca­tions Com­mis­sion’s ap­proval which seems to be a very com­pli­cated process.

U.S. reg­u­la­tors are not the only ones seem­ing tough on M&A ac­tiv­i­ties, but also in Europe where Syn­genta shares fell more than 9% on Mon­day af­ter the EU com­mis­sion said that Chi­nese ChemChina has not of­fered con­ces­sions over its $43 bil­lion bid, which will likely de­lay the process up to five months ac­cord­ing to the Com­mis­sion’s spokesman.

Eq­uity bulls would need pos­i­tive earn­ings to re­sume this week and for the tech sec­tor to take the lead from the fi­nan­cials with the two largest pub­licly traded com­pa­nies, Ap­ple and Al­pha­bet to an­nounce re­sults.

Cur­rency mar­kets re­sumed their range bound trad­ing on Tues­day, with the dol­lar re­main­ing at a 9-month high, and 1.7% far from its 13-year peak. The Euro traded slightly lower as traders ig­nored pos­i­tive PMI re­ports yes­ter­day which showed that the Euro­zone econ­omy had ex­panded at the strong­est pace this year, as it seems mon­e­tary pol­icy di­ver­gence re­mains the num­ber one fac­tor im­pact­ing cur­rency moves. Mar­kets are in­creas­ing their bets on a De­cem­ber Fed rate hike, and the closer we get to the FOMC’s De­cem­ber meet­ing, the higher the prob­a­bil­ity will go, and this is likely to con­tinue sup­port­ing the dol­lar. Mar­kets are cur­rently pric­ing a 74% chance for a De­cem­ber hike.

Of course a stronger dol­lar is not good news for oil prices, how­ever this wasn’t the main driver of crude. Com­ments from Iraq’s oil min­is­ter that his coun­try should be ex­empted from the out­put curbs, brings the ques­tion who else would re­quest the same? We think oil prices will re­main volatile in the next cou­ple of weeks but within lim­ited ranges un­til we get more clar­ity on Novem­ber 30 when OPEC de­liv­ers its plan.

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