Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European markets started the week without significant swings. On this last day of April, most indices were positive, with investors focusing on reported corporate results and news on merger moves. In the retail sector, British supermarket chain Sainsbury’s will merge with Asda (controlled by WalMart) in an operation valued at 15 000 M.GBP. Shares of Sainsbury’s rose 14.87%, while rival Tesco’s shares lost ground as this potential merger is expected to lose market share. The telecommunications sector showed a slight gain on the day the merger of T.Mobile and Sprint was reported. Regarding economic indicators, retail sales in Germany fell unexpectedly in March (-0.60%). Concerning the US tax reform, the press reports that Germany, France and the United Kingdom have joined efforts against the potential US new customs duties, and has asked the US Government not to apply the new rates to imports of metals from Europe. In March, Donald Trump imposed a 25% duty on steel imports and 10% on aluminum imports, but Europe was a temporary exception to this measure, which ends on May 1.
The Earnings Season and merger & acquisition moves were the main themes in the begining of the week. Today before the opening, McDonald’s rose about 5%, after having reported results and revenues above estimates. In terms of consolidation moves in the telecoms sector, T-Mobile reached an agreement to buy rival Sprint in a deal of 26,000 M.USD. On the other hand, Andeavor rose more than 9%, after rival Marathon Petroleum agreed to buy the company for more than 23 000 M.USD. In terms of economic indicators, consumption-related inflation, the measure most considered by the Fed, stood at 1.90% in March, compared to the same month last year, which puts it at highest level of the last 17 months. In the same month, household income increased 0.30% (vs. 0.40% estimated) and expenses grew 0.40% (vs. 0.40% forecast). Regarding the real estate market, real estate purchase and sale contracts increased by 0.40% in March compared to the previous month and the estimated 0.50%.