Financial and Economic Brief - November 21, 2017by © Liberty Publishing, Inc.
October Home Building, One-Year High
According to the U.S. Commerce Department, U.S. home building jumped 13.7% in October, the highest level since October 2016, likely because communities affected by the hurricanes started replacing houses damaged by flooding. October's increase in starts ended three straight months of declines due to shortages of land and labor as well as expensive lumber. Investment in home building has contracted for two consecutive quarters. That has contributed to a worsening housing shortage, which has held back home sales. A survey on Thursday showed confidence among home builders in November at the second-highest level since July 2005 amid optimism about current sales conditions and buyer traffic.
Marvell Bids on Cavium
Marvell Technology has bid around $6 billion for Cavium in a cash-and-stock deal that would create a chip maker to compete with industry giants. The potential deal extends a long-running consolidation for computer chip producers which are trying to grow to better supply tech leaders like Apple, Google and Samsung. Under the proposed deal, Cavium shareholders will get $40 per share and 2.1757 Marvell common shares for each Cavium share they own. Cavium Inc. stockholders are expected to own about 25% of the combined company. Marvell CEO Matt Murphy will lead the combined company, with Cavium co-founder and CEO Syed Ali serving as a strategic adviser and board member.
Wall Street Slightly…Higher
Wall Street indexes were higher on Monday morning, as gains in technology stocks offset a drop in health shares. With no major U.S. earnings or economic data scheduled this week, trading volumes were expected to lower leading up to Thanksgiving. “With earnings season now out of the way, macro news and the prospects of tax reform will basically guide the market,” said Peter Cardillo, chief market economist at First Standard Financial. “I don’t expect the market to endure any sharp sell-off or sharp gains (today).” The Dow Jones Industrial Average was up 30.76 points, or 0.13 percent, at 23,389, the S&P 500 was up 1.67 points, or 0.06 percent, at 2,580.52 and the Nasdaq Composite was up 9.19 points, or 0.14 percent, at 6,791.98.