Financial and Economic Brief - December 5, 2017

by © Liberty Publishing, Inc.

Mixed Numbers for Automakers

Major automakers posted mixed U.S. November new vehicle sales on Friday and predicted a competitive December as they rushed to sell vehicles and lift their 2017 numbers. The November sales results come as the National Automobile Dealers Association said it expects new vehicle sales to fall to 16.7 million units in 2018, after dropping to 17.1 million for the full year in 2017. Brandon Mason, a director at PwC's automotive practice, said a worrying trend for the industry was a rising number of deep subprime loans.
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CVS to Buy Aetna

CVS Health is buying Aetna for $69 billion in cash and stock in a deal that “reflects a rapidly shifting health care landscape”. Aetna stockholders are to receive around $207 a share and will own about 22% of the combined company. The deal could result in lower costs to both CVS and Aetna. Joseph Agnese, a senior analyst with investment research firm CFRA, has said that Aetna participants are likely to benefit the most because CVS may be able to offer them lower co-pays if they shop with them. “This combination brings together the expertise of two great companies to remake the consumer health care experience,” said CVS CEO Larry Merlo.
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Upcoming Fed Rate Hikes

According to a Reuters poll of economists, the U.S. Federal Reserve is “almost certain” to raise interest rates later in December, a majority of whom also now expect three more rate rises in 2018. These new expectations come despite a split among policymakers on the outlook for inflation, which has remained persistently low. While the U.S. economy expanded in the third quarter at a 3.3% annualized rate, the poll suggested that may be the best growth rate until the second half of 2019. “This is about just getting back to a neutral level where monetary policy is neither encouraging growth or pushing against growth,” said Brett Ryan, senior U.S. economist at Deutsche Bank.
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News

Financial and Economic Brief - December 12, 2017

• Powell’s Early Policy Views - Jerome Powell appears set to let the tax cut “run its course” through the economy as weak growth in wages and inflation promote his view that the economy remains “underpowered”.

• November Jobs Report Strong - According to the November jobs report released on Friday, employers added 228,000 jobs in November and the unemployment rate remained at 4.1%.

• Launch of Bitcoin Futures - Derivatives exchange Cboe Global Markets launched its bitcoin futures late yesterday, marking the first time investors could get access to the market via a mainstream regulated exchange.

Financial and Economic Brief - December 5, 2017

• Mixed Numbers for Automakers - Major automakers posted mixed U.S. November new vehicle sales on Friday and predicted a competitive December as they rushed to sell vehicles and lift their 2017 numbers.

• CVS to Buy Aetna - CVS Health is buying Aetna for $69 billion in cash and stock in a deal that “reflects a rapidly shifting health care landscape”.

• Upcoming Fed Rate Hikes - The U.S. Federal Reserve is “almost certain” to raise interest rates later in December, a majority of whom also now expect three more rate rises in 2018.

Financial and Economic Brief - November 28, 2017

• Consumer Sentiment Rose More Than Expected - U.S. consumer sentiment saw “slight” gains in November compared to the mid-month reading, though the index remained below the decade high reached in October.

• Publisher of Time Agrees to Be Sold - The publisher of Time, People and Sports Illustrated agreed yesterday to be sold to another big magazine publisher, Meredith.

• New Home Sales at 10-Year High - Sales of new U.S. single-family homes unexpectedly rose 6.2% in October, to a seasonally adjusted annual rate of 685,000 units, amid strong demand across the country.

Financial and Economic Brief - November 21, 2017

• October Home Building, One-Year High - 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.

• 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.

• Wall Street Slightly…Higher - Wall Street indexes were higher on Monday morning, as gains in technology stocks offset a drop in health shares.

Financial and Economic Brief - November 14, 2017

• Oil Prices May Stay Steady - Oil prices have been rising since June, increasing about 33%. British Petroleum boss Bob Dudley says that may be all for now.

• Coal’s Bleak Future - The coal industry has seen only modest gains in jobs and production this year, mostly from a temporary uptick in foreign demand.

• Qualcomm Rejects Takeover Proposal - Qualcomm recently rejected Broadcom's $103 billion takeover proposal, noting the bid “significantly undervalues” the wireless telecommunications company.

Financial and Economic Brief - November 7, 2017

• October Jobs Report - The U.S. economy added 261,000 jobs in October and the unemployment rate was 4.1%.

• Gas Prices on the Rise - Gasoline prices have risen for most of the U.S. at a time in the year when there is usually “relief” at the pump.

• Dudley Leaving Fed - William Dudley, “among the most influential monetary policymakers throughout the financial crisis and its aftermath”, expects to retire by mid-2018, before his term officially ends in January 2019.