Spreadex Market Update
Kraft/Heinz deal dominates quiet Wednesday
This deal makes the newly, and rather dully, named The Kraft Heinz Company the third largest food company in America, and unsurprisingly propelled Kraft to massive gains, leaping around $20 from yesterday’s price. Unlike so many deals and buyouts that occur in order to fix the failing finances of one faction, this move merely brings two very strong companies together in order to create a mega-company that trades in food people love to guiltily guzzle.
Whilst Kraft exploded, the US markets themselves failed to gain much upward traction this Wednesday afternoon. Even as the dollar fell against the euro and pound, the latest big drop in durable goods orders suffocated the Dow Jones as the day went on. Despite a strong manufacturing PMI yesterday, the durable goods data points to a less healthy state of affairs in US manufacturing, with the main suspect for this decline being the increasingly villainous US dollar and its effects on exports.
News that the ECB is planning to increase the amount of emergency liquidity on offer to Greece to €71 billion, just hours after Athens was denied a €1.2 billion refund from the EU’s bailout kitty, failed to inspire much hope in the Eurozone indices as the DAX et al. continued on the rocky road they have traversed so far this week.
In face of the global negativity, the FTSE did well to hold onto some marginal growth above its 7000 level. This was especially impressive given comments from the Bank of England’s Kristin Forbes that UK inflation is likely to turn negative next month, and that the central bank could cut rates further if low inflation ‘persists’. This is the second such statement from a BoE member after Andrew Haldane similar comments last week; it will be interesting what Governor Mark Carney says when he speaks on Friday.
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