Week of April 8 2016 Weekly Recap & The Week Ahead
“After talking to a guru or anyone with the holy grail, I always take a hot shower, burn the clothes I was wearing, and drink them out of my mind.” — unknown
1. Inversion Move Hits Allergan (AGN) — the Treasury moved to curb tax inversion deals, raising fears that it could thwart the planned merger of Ireland-based Allergan (AGN) and US based Pfizer (PFE). Allergan plummeted based on the news. Treasury is imposing limits on earnings stripping and “serial inverters”.
2. US Justice Dept Files Suit to Block Merger of Halliburton and Baker Hughes — the Dept Of Justice (DOJ) has sued to stop Halliburton Co. (HAL) from acquiring oilfield services rival Baker Hughes (BHI). The deal would combine two of the world’s three leading providers of those services to oil and gas companies. It would create a bigger rival to the industry leader, Schlumberger. DOJ officials say in their lawsuit that the Halliburton-Baker Hughes deal threatens to raise prices and eliminate competition.
3. Most Volatile S&P 500 Stocks on Earnings — chart below courtesy of BIG shows the most volatile stocks on earnings in the S&P 500. Each stock listed below typically moves up or down at least 6.2% on its earnings reaction day.
4. Japan Finance Minister “Jaw-Boning” Japanese Currency — Japan’s Finance Minister has described the dollar’s recent falls vs. the yen as “one-sided movements” and vowed to intervene if necessary to continue the country’s fight against deflation. “We are watching moves with a sense of tension,” Taro Aso told a press conference after the greenback sank to a 17-month low of 107.67 yen late last week. “We will take necessary steps in accordance with circumstances.” The dollar has tumbled nearly 10% against the Japanese currency this year, with the past week accounting for roughly 3% of the move.
5. More Fallout From the “Panama Papers” — the “Panama Papers” scandal has claimed its first banking chief executive with the resignation of Michael Grahammer, CEO of Austrian lender Hypo Landesbank Vorarlberg. So far, the Prime Minister of Iceland resigned. With additional details of offshore accounts surfacing, more high profile and political figures are looking to come clean. U.K. Prime Minister David Cameron has admitted to benefiting from a fund of his late father, but said that it was not set up to avoid taxes, and he himself paid state dues on the shares he sold.
The week ahead — Economic data from Econoday.com:
Tags: Inversion Deal, Japanese Yen