DJIA 18034 // S&P 2094 // NASDAQ 4973 // 10-YR TRE 1.904%
EURO 1.0649 // OIL 53.29 // GOLD 1192 // BIT 219
Andrew Gould of BP and Jorma Ollila of Shell shake hands during a news conference announcing their companies' merger. Shell is offering $70 billion for BP in the biggest deal so far in 2015 and would create the world's largest independent producer of liquified natural gas (LNG).
EURO 1.0649 // OIL 53.29 // GOLD 1192 // BIT 219
$3,700,000,000,000
Highest annual M&A deal volume on record, which occurred in 2007. So far, this year is on pace to surpass the record
NOTE: If paywalled, search article title and access from Google
M&A:
"The two latest megadeals involving Mylan and Shell underscore the forces behind the M&A surge. Boardroom confidence is a crucial ingredient for deal-making and has bounced back after the economic crisis; rock-bottom interest rates make it cheap for companies to borrow money for takeover; and the dollar's strength is suggesting to some that deals in Europe denominated in a comparatively-cheap currency are increasingly appealing."
HIGH-FREQUENCY TRADING:
Virtu Financial had its IPO shelved earlier in 2014 amid the furor against high-frequency traders triggered by publication of Michael Lewis' Flash Boys. Now, shares are scheduled to price on April 15 at around $17 to $19 apiece on 16.5 million shares. At the high end of the price range, the company may be worth as much as $2.5 billion.
SHADOW BANKING:
Shadow banking, an umbrella term for institutions that provide credit without being subject to the same reserve requirements and regulations of other banks, has risen in popularity since the financial crisis. The situation is eerily similar to before the financial crisis, when lightly regulated lenders became a key feature of risky lending practices that led to economic overextension and collapse.
INTERNATIONAL:
Two unprecedented events occurred last week: Switzerland issued bonds that buyers are actually paying to hold, and Mexico issued bonds maturing in 100 years--paying a yield of 4.2%. The two events are being seen as harbingers of an era of extremely easy money that has a lot of assumptions of capital markets being turned on their heads.
MONEY MARKETS:
Repo market sees a lending shift as rules bite, WSJ
Just as is happening in other forms of credit provision, alternative lenders are stepping into the $2.6 trillion repo market, which provides short-term, "overnight" loans and liquidity to companies. Lendees are turning from traditional lenders to alternatives like pension funds and other money managers, who are disintermediating from banks and issuing loans directly to a new stream of clients.
Just as is happening in other forms of credit provision, alternative lenders are stepping into the $2.6 trillion repo market, which provides short-term, "overnight" loans and liquidity to companies. Lendees are turning from traditional lenders to alternatives like pension funds and other money managers, who are disintermediating from banks and issuing loans directly to a new stream of clients.
Vocabulary & People:
Calendar:
Calendar:
- Mo Apr 13: Treasury budget; PBY, PSG
- Tu Apr 14: PPI, Retail sales; CSX, INTC
- We Apr 15: Industrial production, Beige book; BAC, DAL, NFLX
- Th Apr 16: Housing starts, Jobless claims; AMD, AXP, GS, SLB
- Fr Apr 17: CPI, Consumeer sentiment; GE, HON, SYF
Predictions from last week: 1/3 All-Time: 20/39
- Chinese yuan strengthens: WRONG
- AA misses: WRONG
- Another candidate: CORRECT
- Higher consumer sentiment
- NFLX beats estimates on higher subscriptions
- GS beats estimates on trading revenue
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