MARKET SNAPSHOT
A Columbus Day Calm
- U.S. stocks saw little movement on Monday as investors await the first major earnings reports for the third quarter—set to start in earnest today. Nonetheless, the major indices saw positive movements near the close to end the day in the green. Thanks to Christopher Columbus and bond markets being closed for the holiday, trade volume was at one of its lightest levels of 2015.
- It was a different story for oil. Crude saw a five percent drop, erasing half its gains from last week. The drop marks the largest daily drop for the coveted commodity in the last six weeks. The dip was attributed to run-of-the-mill profit-taking as well as OPEC reporting production increases.
- Fresh off a great week, gold continued its winning streak, reaching its highest level in over three months. This renewed gain comes from investors flocking towards safe-haven investments as Russia continues to escalate its involvement in Syria.
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WORLD MACRO
Bankers vs. IMF
The World Bank and the International Monetary Fund met up for their annual meeting on Sunday, and (of course) the Federal Reserve’s potential interest rate hike was a hot topic. Bankers representing emerging markets claim that delaying the interest rate hike does nothing to help the global economy and only adds more uncertainty. Meanwhile, the International Monetary Fund is siding with the Fed, stating that delaying interest rate hikes could prevent a wave of corporate defaults in emerging markets, which could slow down the global economy. It’s nice to have second opinions, but at the end of the day, it’s the Fed’s call.
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CORPORATE PRIMER
Busch Keeps Trying
$103 billion: the new number for Anheuser-Busch InBev’s offer to acquire fellow brewer SABMiller. It’s a nice looking number, but Busch can’t move forward without getting two particular Miller majority shareholders on board first. To sweeten the deal for the stubborn two, Busch is now offering a partial share alternative that allows them to remain invested and benefit from tax advantages. The bait is out there. Now, we wait—again.
Dell Buys EMC for Lots of Money
It’s official: computer giant Dell is acquiring data storage provider EMC in an absolutely massive deal: at $67 billion, it’s the largest tech deal…ever. The acquisition is not just another big M&A transaction in a continued world of low interest rates (Dell is taking on a ton of debt to finance the deal, along with a big assist from private equity firm Silver Lake)—it’s also the clearest sign yet that the PC market is stagnant, and that the future lies in cloud-based data storage services. It’s a brave new world, and the world’s #3 computer maker is trying to keep up.
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TODAY IN TECH
Cyber Arms Race
It used to be as simple as counting how many nukes a country had to assess their wartime potential. Not anymore, as a cyberwar has ignited between countries to amass as many cyber-weapons as possible—it’s an arms race for the modern era. What’s the scale? Try over 29 countries with committed military budgets and units for offensive hacking efforts, and over 50 countries buying off-the-shelf malicious codes for international surveillance. Meanwhile, the U.S. and China have cut a deal not to conduct cyberattacks on each other. We’ll see about that.
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ECONOMIC CALENDAR
- Monday: Columbus Day (Markets Open, Banks Closed)
- Tuesday: JPMorgan, Johnson & Johnson, Kinder Morgan, Las Vegas Sands Earnings
- Wednesday: Netflix, Bank of America, Delta, Wells Fargo Earnings; Retail Sales
- Thursday: Goldman Sachs, Citigroup, Philip Morris Earnings; Weekly Jobless Claims; Consumer Price Index
- Friday: General Electric Earnings; Industrial Production
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MONEY BACK MAGAZINES
Magazines may be losing clout, but don’t count them out yet. The Association of Magazine Media has organized one heck of a deal: money back if an ad fails to deliver sales results, in order to entice advertisers. Here’s how it works:
- Magazines will refund advertisers if they don’t pass a certain sales threshold. For example: Time magazine is promising a $17 sales increase for every $1 spent on print advertising.
- To qualify, a magazine must reach roughly 125 million adults an average of three times per year. This initiative is right on time: magazine print ad spending is projected to decrease 1.8 percent this year.
- This isn’t the industry’s only effort. A year ago, a monthly audience measurement tool was released to give publishers more credibility, and you more reasons to browse in the checkout line.
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INTERVIEW QUESTION OF THE DAY
You have a birthday cake and have exactly three cuts to cut it into eight equal pieces. How do you do it? (Answer)
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BUSINESS TERM OF THE DAY
Real Estate Investment Trust — A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges like a stock. REITs provide investors with an extremely liquid stake in real estate. They receive special tax considerations and typically offer high dividend yields.
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FOOD FOR THOUGHT
68: the percent of men in China who smoke cigarettes, which is contributing to a massive health crisis, according to a recent study.
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