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Article written by Paul Paris, Jr Investment Advisor
The pan-European Stoxx 600 closed provisionally 0.19 percent lower with most sectors performing negatively
Auto stocks felt the pressure, down by 0.28 percent, as trade concerns weighed on sentiment. European Commission President Jean-Claude Juncker is heading to the White House this week in an attempt to persuade the U.S. to suspend tariffs on European carmakers. The meeting comes after finance leaders from the world’s 20 biggest economies failed to reach a significant agreement on trade at a meeting over the weekend. Furthermore, auto stocks were also impacted by news that Fiat Chrysler CEO Sergio Marchionne has been replaced abruptly after almost a decade at the helm, due to health concerns. Fiat Chrysler was down by 1.5 percent while Ferrari, which was also led by Marchionne, dropped 4.88 percent upon issuance of the news.
U.S. stocks on the other hand, closed mostly higher on Monday, aided by a rally in financial shares. Investors indulged in a raft of positive corporate earnings, though gains were topped by fresh geopolitical worries after President Donald Trump tweeted a strong warning to Iran. The S&P 500 increased by 0.2%, to 2,806.97 with the financial sector leading gains, up 1.3%. Shares of large banks, such as J.P.Morgan Chase and Bank of America increased by more than 2%. The Nasdaq Composite Index advanced, 0.3%, to 7,841.87. The Dow Jones Industrial Average ended less than 0.1%, lower at 25,044.70. Among the biggest gainers on the S&P 500, shares of Hasbro Inc. soared by 12% after it reported second-quarter results that significantly topped forecasts.
Alphabet stock reaches records highs following Google’s earnings
Alphabet Inc. shares soared to never before seen prices in regular trading Monday in the extended session, as second-quarter earnings smashed expectations after accounting for a record antitrust fine out of Europe.
The Google parent company reported $3.2 billion in net income for the quarter, which works out to $4.54 a share, down from $5.01 a share a year ago, when the company also had to deal with a big antitrust fine from the EU. Excluding the fine, Alphabet would have reported earnings of $11.75 a share, the company said, well higher than analysts’ average estimate of $9.64 a share.
Alphabet accounted for the fine in Monday’s report even though Google Chief Executive Sundar Pichai confirmed on Monday’s call that Alphabet plans to appeal, and said he is “looking forward to finding a solution, above all, that preserves the enormous benefits of Android users.”
Blackstone victorious in gaining EU approval to purchase Thomson Reuter Unit
U.S. private equity firm Blackstone Group has secured EU antitrust approval to purchase a majority stake in Thomson Reuters’ Financial and Risk unit, the European Commission stated on Monday.
Much like Thomson Reuters, Blackstone’s portfolio company Ipreo, which it agreed to sell to IHS Markit in May, provides information and related services to financial market professionals. The EU enforcer said it did not see any competition concerns despite the apparent overlaps between the two companies. The EU enforcer stated that the proposed transaction would raise no competition concerns given the limited market shares of both companies, together with the fact that a number of competitors will remain in the market post-transaction, and the fact that Blackstone accounts for only a miniscule share of the demand for Thomson Reuters F&R’s products.
Blackstone is making its biggest bet since the financial crisis with the $20 billion deal which sees co-founder Stephen Schwarzman go up against fellow billionaire and former New York Mayor Michael Bloomberg.
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