Five Things You Need to Know to Start Your Day
Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. LVMH is stalking a big acquisition target, Parliament is voting on Boris Johnson’s request for a U.K. general election and HSBC Holdings Plc kicks off another busy earnings week with a disappointing report. Here’s what’s moving markets.
LVMH’s Bid
Traders and analysts have speculated for years that French billionaire Bernard Arnault would put some of his big cash pile to work with a blockbuster acquisition, and he’s finally come through: Arnault’s LVMH has offered to buy U.S. jeweler Tiffany & Co. for about $14.5 billion, Bloomberg News reported over the weekend, news that’s likely to boost luxury stocks around the world. For luxury watchers, the only thing that would make for a bigger drama would be if Arnault’s arch-rivals, the Pinault family, stepped in with a bid of their own. The two clans battled 20 years ago over ownership of Gucci, a contest won by Francois Pinault.
HSBC Misses
HSBC’s shares fell 3% in Hong Kong this morning after the bank’s profit missed analyst estimates and it abandoned a key target for returns. Acting Chief Executive Officer Noel Quinn cited difficulties in the U.K., continental Europe and the U.S., though performance in Asia held up. The takeaway is that HSBC is getting ready to make steep cuts in underperforming businesses, another chapter in the endless struggles of Europe’s banking giants.
Brexit Machinations
Yes, you’ve heard this one many times before, but it’s true nonetheless: This is a key week for Brexit. The House of Commons votes today on U.K. Prime Minister Boris Johnson’s call for an election on Dec. 12, while the European Union mulls how long of an extension to grant the U.K. to its divorce deadline. Johnson, stymied in his effort to get the U.K. out of the bloc by the deadline of this Thursday, looks unlikely to win the parliamentary vote. The EU is considering a three-month extension, until Jan. 31, with an option for the U.K. to leave earlier if both sides ratify the divorce in time. It’s all as clear as mud, as usual, and the pound and U.K. stocks may get whipsawed today as events unfold.
Argentine Vote
Argentine voters made a seismic change yesterday, ousting pro-market President Mauricio Macri in favor of left-wing populist Alberto Fernandez. The outcome was at least partially priced in in August, when Fernandez handily outpaced Macri in primary elections. Investors are worried about a return to Peronism, an anti-elite political movement that traditionally favors workers over business owners, and a risk of Argentina defaulting for the ninth time. European companies have relatively little exposure to Argentina, but here are a few that might suffer in the stock market today because of the election result. Argentina tightened currency controls late Sunday, restricting dollar purchases by savers to buy just $200 per month compared with the $10,000 per month previously.
Coming Up…
Markets are off to a quiet start this week, with benchmarks little changed in Tokyo and Sydney and higher in Seoul, Shanghai and Hong Kong. In the U.S., the S&P 500 Index is within striking distance of its July closing record and all eyes will be on the Federal Reserve, which announces its interest rate decision on Wednesday. The flood of earnings this week includes Google parent Alphabet after the U.S. close today. Clocks yesterday moved back an hour in Europe, so the time difference between New York and the continent is five hours until next Sunday. Though you either already knew that or are already late for work.
What We’ve Been Reading
This is what’s caught our eye over the weekend.
- Christine Lagarde faces peril on all sides at the ECB.
- Private bankers chasing uber-Rich in a surprise wealth hotspot.
- BNP Paribas, Goldman Sachs among banks expanding in Germany
- In the van with the ``juicers’’ who recharge scooters.
- Baghdadi death eliminates Islamic State chief but not the group.
- Fired-up Branson prepares for biggest test as space shot beckons.
- Death canal comes to life as export gateway for European wheat.
- Welsh pub owner says his establishment is haunted.
To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net
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