Global weekly: Under central bankers’ spell

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Equity markets rebounded in the second half of this week, as several Fed policymakers indicated a nearterm rate hike may be premature. ECB officials took an accommodative stance as well, hinting at additional easing measures to fuel inflation.

Equity markets update

On balance, global equity markets did not move much this week, with China being the exception. After a weak start, stock markets gained territory during the second half of the week, as investors seemed convinced that the Federal Reserve (Fed) will refrain from rate hikes in the near term. Expectations for new stimulus in China also added to investors’ confidence.

In the US, the third-quarter earnings season really kicked-off. So far, companies seemed a bit cautious with regard to their outlook. Some large banks were among the first US companies to report quarterly earnings. In terms of profits, these banks’ results were mixed. Loan growth, however, was strong and net interest margins were stable. Mortgage volumes disappointed and trading revenue declined. Third-quarter figures of Netflix trailed expectations. Moreover, the provider of online streaming services reported disappointing subscriber growth in the US. Wal-Mart issued a profit warning. In Europe, ASML’s outlook disappointed, but Unilever reported very strong revenue growth for the third quarter.

On the mergers & acquisitions (M&A) front, the SAB Miller board accepted an improved offer from AB Inbev and Dell made an offer for data storage company EMC. The rationale for Dell to acquire EMC is that the company becomes less dependent on the shrinking global pc market. Intertrust was listed on Euronext Amsterdam this week. The Initial Public Offering (IPO) price was EUR 15.50 per share, valuing the provider of legal and financial administrative services at EUR 1.3 billion. More IPO news came from FiatChrysler: the car maker is planning to list its subsidiary Ferrari. At the top end of the price range, Ferrari is valued at USD 9.8 billion.

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