This content is from: Portfolio

Daily Agenda: Investors Look to Upcoming Policy Announcements

Oil and stocks retreat before Fed and BOJ confabs; Cruz and Kasich gang up on Trump; German business confidence slumps; BOJ accumulates Nikkei stake.

With financial market risk narratives calibrated to announcements in the days ahead by the Federal Reserve and Bank of Japan, investors start the week pondering the sustainability of the rebound in risk-asset values over recent months. A pullback in oil-futures markets contributed to a mild selloff in European equities in early trading today. Regardless of today’s pullback, for now, a high ratio of earnings beats as the first quarter reporting cycle continues to play out and signs of increasing raw material demand in China suggest that the glass-half-full narrative will continue to find favor among investors.

Cruz, Kasich join forces to block Trump. Yesterday the campaign staffs for Texas Senator Ted Cruz and Ohio Governor John Kasich announced that the two presidential candidates had reached an accord to coordinate races in upcoming primary contests in an effort to thwart real estate tycoon Donald Trump. A terse response from Trump labeled the move as “desperate.” Trump is expected to do well in a set of primaries this week in large, industrial northeastern states.

Ball to sell can factories. On Monday, Broomfield, Colorado-based Ball Corp. announced an agreement to sell a portion of its global beverage can and bottle manufacturing operations to Dublin-based Ardagh Group in a deal valued at more than $3.4 billion. The move follows Ball’s acquisition of European rival Rexam, a transaction which required a divestiture of some assets to meet European Union antitrust hurdles.

German business sentiment slumps. Confidence among Germany’s corporate leaders waned in April, according to data released today by the Ifo Institute. The headline expectations index rose to 100.4 versus a prior 100 reading but fell short of consensus economists’ forecasts. Meanwhile, the institute’s current conditions and business-climate benchmark slid lower from March levels.

Bank of Japan takes huge Nikkei stake. Data compiled by Bloomberg indicates that the Bank of Japan’s asset-purchase facility has purchased exchange-traded funds in such quantity that the central bank now holds more than half of the units outstanding for some exchange-traded products. As a top shareholder in the vast majority of Nikkei 225 benchmark equities, the unprecedented equity stake has raised concerns among some analysts about valuation and liquidity distortions.

Publishing firm bid. On Monday McLean, Virginia-based newspaper giant Gannett Co. announced an offer to acquire Chicago-based Tribune Publishing Co. for roughly $400 million including debt. The deal would merge USA Today, the Los Angeles Times and Chicago Tribune among others into a single portfolio of newspapers. Tribune has not publicly responded to the $12.25 per share offer, a 63 percent premium to Tribune’s share price last Friday.

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