Five Things You Need to Know to Start Your Day
Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. Boris Johnson’s Brexit bill gets its first vote in the new Parliament, the next Bank of England governor may be revealed and a food fight is showing no sign of slowing down. A note to readers, this will be the last Five Things until Jan. 2. For now, here’s what’s moving markets.
Brexit Vote
It’s been just over a week since the U.K. election, but Boris Johnson’s Brexit bill gets its first vote Friday in the House of Commons as he seeks to drive the legislation through Parliament and take the country out of the European Union on Jan. 31 and usher in a “golden age.” Given his party’s new majority, the vote is all but a formality and the law will then be set to go through the remaining parliamentary steps after the Christmas break. In another sign of action, Chancellor of the Exchequer Sajid Javid is set to name the next Bank of England governor, with the Financial Times reporting that it will be Andrew Bailey, the head of the Financial Conduct Authority. That’s the same FCA that was asked to investigate how an audio broadcast feed of some BOE press conference may have been misused to give some traders an advantage.
Food Fight
It may be nearly the end of the year for stocks, but one deal that traders won’t be able to put in the rear view mirror just yet is the battle for Just Eat Plc. Late Thursday, both Prosus NV and Takeaway.com made their final offers for the U.K.-based food-delivery company. Takeaway’s all-stock offer of 916 pence a share — and giving Just Eat owners a 57.5% stake in the combined group — sent its own stock tumbling 10% in late trading, while Prosus topped out at 800 pence a piece in cash. At least one shareholder, Cat Rock Management, has already weighed in to back Takeaway. Everyone else has until Jan. 10 to accept either offer.
Quadruple Witching
It’s a special day for volatility traders: the quarterly “quadruple witching” expiry. December options and futures on indexes and stocks will expire today, which usually creates a surge in the volume of the underlying securities, and often some unexpected market moves. Given the market performance, a significant portion of speculative call options on the Euro Stoxx 50, the most liquid European index, are likely to be in the money and settle. Large positions on the index may have already been rolled or covered, judging by the 44% rise in put and call volumes over the past five days, compared with the 20-day average, while the index future on Tuesday recorded its heaviest volume since September.
French Protests
There appears to be no end in sight for French protests that have wreaked havoc on the country’s rail system for the past two weeks. Several French unions said that talks with the government had failed to advance and signaled that they plan to continue protests against President Emmanuel Macron’s reform plan in 2020. The deadlock could disrupt Christmas travel plans for millions of people, though the government continues to seek a temporary truce for the holiday period. So far, Parisian retailers appear are bearing the brunt of it as stopped trains limit foot traffic to the capital.
Coming Up…
Asia stock markets were mixed after the U.S. hit more records in Thursday trading as investors continued to shrug off the impeachment of Donald Trump. The pound is heading for the worst week in two years after Johnson set a hard deadline for the end of 2020 for negotiating a trade deal with the EU. Later today, we’ll get revised U.S. GDP data. And of course, for fans of a galaxy far, far away, there is the finale of Disney’s latest Star Wars trilogy to get through — though enthusiasm may be muted as some critics give it the worst reviews of the series since the ‘Phantom Menace.’
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- Wall Street’s machine of silence stopped a #Metoo revolution.
- U.K. bank ring fence may spell trouble.
- Mysterious bags of cash trigger Hong Kong arrests.
- The best cars I drove in 2019.
- The distressed debt trades that gutted bonuses this year.
- Hungarian government seizes control of fertility clinics.
- ‘Cats’ critics say the movie is a dog.
To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net
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