Markets Summary with a ‘Win-Win’ Deal

European markets closed mostly in the red on Tuesday as investors digested corporate earnings and focused on latest developments in the Catalonia crisis. The Spanish Constitutional Court declared the Catalan referendum law illegal, while Catalan authorities insisted they will not give up on their plan to seek independence.

The FTSE 100 dipped 0.14%. Merlin Entertainment led the losses as it plummeted 15.94%. The DAX decreased 0.07%. Merck which dropped 2.33% was the worst performer. In France, the CAC 40 was down 0.03% with TechnipFMC sliding 2.17%. Spain's IBEX 35 was the only index to end in positive territory as it climbed 0.35%.

Meanwhile, across the pond, the Dow Jones hit an all-time high of over 23,000 minutes before the European session ended. The all-time high was reached after UnitedHealth and Goldman Sachs reported better-than-expected third-quarter earnings. The oldest gauge rose 40 points and hit an intraday high of 23,002 points as it was pushed up by the latest earnings reports. The first time it closed above 22,000 points was on August 2.

The best performer was UnitedHealth as it jumped over 5%. Johnson and Johnson and Nike followed with gains of 2.17% and 0.83%, respectively. Yesterday, United Health said its earnings per share were $2.51 while Johnson and Johnson said its revenue rose to $19.7 billion.

Goldman Sachs saw a drop in revenues in areas such as bond and currency trading and the stock market in the third quarter, but it more than compensated the setback with gains in investing and lending. Overall the company saw its net revenues rising 1.9% to $8.33 billion on an annual basis, translated to earnings per shares of $5.02, compared to the $4.88 achieved a year earlier.

Precious Metals

Precious metals traded mostly in the red with gold falling below the $1,300 mark it reached in the previous session as the dollar grew stronger. Investors continued to speculate on the candidacy of the next US Federal Reserve chairperson, wondering what monetary policy approach the new head of the central bank will favour. Market watchers are also expecting another interest rate hike by the end of this year with several more in 2018, as hinted by Fed's officials. 

AirBus – Bombardier

European Aircraft giant Airbus is taking a majority stake in Bombardier’s controversial C-series Jet programme, which can lead to safeguarding 1,000 jobs. The French-based Airbus is acquiring over 50% of the program, which was in doubt after the 300% import levy imposed by the United States. The tariff was imposed following a complaint by Boeing, that the company had priced their C-series at “absurdly low” prices.

Airbus will be using its global strength and supply chain to provide procurement, sales and marketing and customer support to the Jet programme. They are also pointing to the possibility of expanding the output and the order book. The deal will leave Bombardier with about 31% of the C-series programme, while financier Investissement Quebec will own about 19%.

Disclaimer: This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.