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IN-THE-MARKETS

In the Markets – Week-Ending May 27

by Peter J. Creedon

Newsletter: In the Markets – Week-Ending May 27
Crystal Brook Advisors
We Make Financial Planning Crystal Clear

United States: President Barack Obama said that the U.S. will fully lift a decades long ban on sales of lethal arms to the Southeast Asian country.(1) The introduction of negative rate policies by the European Central Bank and the Bank of Japan, is further sharpening overseas interest in municipal bonds.(2)

Europe: Eurozone business growth held steady in May, the latest evidence to suggest a strong acceleration in growth in the first three months of the year was only temporary.(3)

Asia: Japanese manufacturing activity contracted at the fastest pace in more than three years in May as new orders slumped, putting fresh pressure on the country to unveil additional stimulus.(4)

Monday 05/23

• German pharmaceutical and chemicals giant Bayer said it made an all-cash offer to acquire Monsanto for $62 billion, valuing the U.S. company at a substantial premium in a deal that would create the world’s largest agrochemicals company.(5)
• Hedge funds are placing a large number of ‘short’ wagers on Australia’s biggest banks, among the world’s most profitable, suggesting the lenders might be headed for trouble.(6)

Tuesday 05/24

• Global stocks climbed Tuesday, while the dollar strengthened against the euro and yen.(7)
• Short-term Treasuries are underperforming Tuesday morning with the yield on the two-year note reaching a fresh two-month peak above 0.9%.(8)
• Snapchat is raising about $200M in a financing round that could put the ephemeral messaging service’s valuation as high as $22.7B.(9)

Wednesday 05/25

• U.S. stocks marched higher, driven by gains in energy and financial shares. The move higher has come as oil prices approach $50 a barrel and investors appear more comfortable with the prospect of higher interest rates as early as this summer.(10)
• Responding to Monsanto’s rejection of its $62B takeover offer, Bayer said it “remains committed to working together” to complete a deal and is confident that it can “address any potential financing or regulatory concerns.”(11)
• The European Commission approved the Anheuser-Busch InBev-SABMiller merger after the companies agreed to sell several SABMiller assets in Europe to ease antitrust concerns.

Thursday 05/26

• The price of both Brent crude and WTI rose above $50 a barrel on Thursday, as declines in U.S. crude stocks boosted the price of a commodity that is suffering from a yearlong supply glut.(13)
• AT&T joins Verizon in potential pursuit of Yahoo’s Internet Business.(14)
• Pending home sales jumped 5.1 percent in April, besting expectations for a modest gain. The continued pickup in pending home sales indicates the spring home buying season is off to a solid start.(15)

Friday 05/27

 

Market Close
U.S. stocks closed slightly higher Friday, turning in their largest weekly gains in months, as Federal Reserve Chairwoman Janet Yellen signaled a rate hike may be justified over the summer. The Dow Jones Industrial Average DJIA, +0.25% rose 44.93 points, or 0.3%, to close at 17,873.22, gaining 2.1% for the best weekly performance since March 18. The S&P 500 Index SPX, +0.43% advanced 8.96 points, or 0.4%, to finish at 2,099.06, for a 2.2% weekly gain, the strongest since March 4. The Nasdaq Composite Index COMP, +0.65% rose 31.74 points, or 0.7%, to close at 4,933.50, for a 3.3% weekly gain, the best week since Feb. 19.(16)

Contributor: Oscar Xia

Sources:
(1) Source: Wall Street Journal
(2) Source: Financial Times
(3) Source: Seeking Alpha
(4) Source: Seeking Alpha
(5) Source: Wall Street Journal
(6) Source: Wall Street Journal
(7) Source: Wall Street Journal
(8) Source: Wall Street Journal
(9) Source: Seeking Alpha
(10) Source: Wall Street Journal
(11) Source: Seeking Alpha
(12) Source: New York Times
(13) Source: Wall Street Journal
(14) Source: Bloomberg
(15) Source: Wells Fargo Economics Group
(16) Source: MarketWatch