Oil traded near its highest price in seven days on optimism fuel demand will increase because of improved prospects for economic growth in the U.S., the world’s biggest user of crude… follow the full story here
“Yes, the economy’s weak, but there’s not much more I can do.”
But, wait, didn’t the New York Times say that Ben said the Fed was “ready to prop up the economy”?
Reuters suggests that August’s $200-billion in takeover announcements is unlikely to provide enough of a spark to energize equity markets fretting about another dip in global growth.
Fueled by rock-bottom interest rates, cheap stock valuations and big company warchests — will help limit stock market losses as fund managers scramble to fill portfolios with shares of potential targets.
And the flip side is that the prospect of enhanced M&A activity could raise fears of more job losses and questions about whether dealmaking is driven by worries over future product demand, contributing to investor unease.
S&P 500 companies, which have been aggressively slashing costs to weather the economic slowdown, closed last quarter with $1.63 trillion in cash holdings, the highest for any quarter on record, according to Thomson Reuters Worldscope.
“Companies’ balance sheets have rarely been so flush with cash,” said Alain Bokobza, head of global asset allocation at Societe Generale CIB in Paris.
These companies, struggling to boost revenue in an anemic economic environment, are making waves in what is usually one of the quietest months of the year for M&A activity.
According to Thomson Reuters data, nearly $200 billion in mergers and acquisitions has been announced in August, already making it the third-best month so far this year in terms of money committed to deals.
Comparatively, the $1.5 trillion spent in M&A from the start of the year to August 23 is 20.6 percent above last year’s amount. But it’s over 50 percent less than the $3.1 trillion spent in the same period of 2007, when global stock markets were on their way to historic highs.
For the whopping price of $7.68 billion USD! – but failed to update investors with their forecast guidence… Result = Investor confusion.
“It’s frustrating with Intel because they were just out last week with this McAfee deal and why they wouldn’t have provided updated guidance then is beyond me,” said Walter Todd, who helps manage $850 million including Intel shares, at Greenwood Capital in Greenwood, South Carolina. “But then to come out a week later and revise down, it doesn’t provide a lot of visibility.”
Intel spokeswoman Amy Kircos said there was no delay in issuing the projection. “Intel updates the market when we have the data,” she said. “We got data today and updated the market.”
The events highlight the challenges facing investors this year including diverging signals on profits and the economy and concern spurred by the May 6 stock market crash that erased $862 billion of value in 20 minutes. While Intel holders took solace in the shares’ 1.1 percent gain yesterday, some questioned the timing of the statement and the subsequent trading.