Clash of the titans
The weakness of the US based car manufacturers was displayed when Toyota overtook GM the world's top car seller earlier this year. GM has not been giving up and noted higher sales attributed to its strong presence in Latin America and Asia. Meanwhile, it seems that customers in North America seem to associate Toyota with high quality and fuel efficiency (and rightly so), making up for the weaker sales on its domestic market. Toyota is expected to beat GM in annual sales for 2007. GM has to either take away Toyota's competitive advantages (superior quality etc.), or refocus their own core competencies (more on this story: http://online.wsj.com/article/SB118491895284472882.html?mod=home_whats_news_us ).
Dow 14000
Yesterday, DJIA broke yet another thousand of points, springing doubts that it is just too high...
The importance of expectations
... and promptly fell 150 points today, as blue chips were releasing disappointing Q2 earnings data. Google's shares went down 5.2% despite quarterly profit grow of 28%, Microsoft also fell despite growing profit... just shows once again, that the markets expectations are the most important (See: http://online.wsj.com/article/SB118493115406772925.html?mod=home_whats_news_us ).
Showing posts with label DJIA. Show all posts
Showing posts with label DJIA. Show all posts
Friday, July 20, 2007
Bits & Pieces
Wednesday, April 25, 2007
The letter C...
Standing for: "consolidation". This word is very important in the banking sector nowadays, as it has became a more and more global industry. Banks branch internationally and they face stiffer and stiffer competition both in their respective and domestic markets.
The European banks are in an unfortunate situation that they are being exposed to competition of US and Japanese based banks, from the biggest bank in the world - CitiGroup's CitiBank, through other banking giants from these two countries.
The European way to fight back was and still is consolidation - fewer bigger banks have a greater chance of successfully competing with oversea rivals. Companies such as Deutsche Bank, Banco Santander, Royal Bank of Scotland have been pursuing this strategy. If a bank is not strong enough to overtake its competitors, than becoming and attractive acquisition target, and in turn achieving a big payoff for its stockholders becomes essential.
ABN Amro, one of the three biggest banks in the Netherlands is a well capitalized, efficient financial institution operating business units on 5 different continents (For more information see: ABN Amro reports http://www.abnamro.com/com/about/reports.jsp ). There has been some attention in the media about the possibility of ABN acquiring some other European bank. As it turned out however ABN was an acquisition target itself.
The British Barclay's Bank offered 90 billion $ for taking over ABN, but another bid emerged suddenly. Fortis Bank NV, Banco Santander and Royal Bank of Scotland are trying to conduct a hostile take-over of ABN, worth over 100 billion $. The extraordinary thing here is not only the rarity of hostile take over in the banking industry, but the value of the deal making it the biggest in the banking industry history (More on that: http://online.wsj.com/article/SB117748527305881826.html?mod=home_whats_news_us ).
Because of the magnitude of the deal and the power of the involved parties this is turning out to be very interesting. One thing that is pretty certain - ABN stockholders will receive a handsome payoff and one of the parties involved will leave the table empty handed.
***
DJIA does it again!
The Dow has done it again. The Dow Jones Industrial Average has surpassed the 13,000 point mark, achieving a new all time high (See: http://online.wsj.com/article/SB117750071157281919.html?mod=home_whats_news_us ).
The European banks are in an unfortunate situation that they are being exposed to competition of US and Japanese based banks, from the biggest bank in the world - CitiGroup's CitiBank, through other banking giants from these two countries.
The European way to fight back was and still is consolidation - fewer bigger banks have a greater chance of successfully competing with oversea rivals. Companies such as Deutsche Bank, Banco Santander, Royal Bank of Scotland have been pursuing this strategy. If a bank is not strong enough to overtake its competitors, than becoming and attractive acquisition target, and in turn achieving a big payoff for its stockholders becomes essential.
ABN Amro, one of the three biggest banks in the Netherlands is a well capitalized, efficient financial institution operating business units on 5 different continents (For more information see: ABN Amro reports http://www.abnamro.com/com/about/reports.jsp ). There has been some attention in the media about the possibility of ABN acquiring some other European bank. As it turned out however ABN was an acquisition target itself.
The British Barclay's Bank offered 90 billion $ for taking over ABN, but another bid emerged suddenly. Fortis Bank NV, Banco Santander and Royal Bank of Scotland are trying to conduct a hostile take-over of ABN, worth over 100 billion $. The extraordinary thing here is not only the rarity of hostile take over in the banking industry, but the value of the deal making it the biggest in the banking industry history (More on that: http://online.wsj.com/article/SB117748527305881826.html?mod=home_whats_news_us ).
Because of the magnitude of the deal and the power of the involved parties this is turning out to be very interesting. One thing that is pretty certain - ABN stockholders will receive a handsome payoff and one of the parties involved will leave the table empty handed.
***
DJIA does it again!
The Dow has done it again. The Dow Jones Industrial Average has surpassed the 13,000 point mark, achieving a new all time high (See: http://online.wsj.com/article/SB117750071157281919.html?mod=home_whats_news_us ).
More on that in the upcoming posts...
Wednesday, January 17, 2007
What does the market hold for the future?
The last couple of months have been very good for the stock market, especially the Dow Jones Industrial Average (DJIA), which broke its index record set in the year 2000 and went on over the value of 12,000 points, hitting new record highs on a regular basis.
The DJIA's blue chips are among the stocks pulling the market up, as it has been closing at new all time highs for most of the time in January 2007. Another factor contributing to the rise in stock prices is the very good performance of the financial sector. Examples would be, among other, companies such as JP Morgan, achieving a whooping 68% rise in net income in Q4, comparing with Q4 2005 (More on that: http://online.wsj.com/article/SB116903511859878854.html?mod=home_whats_news_us ), or Merrill Lynch, taking advantage of the strength of the financial marketing in the concluding months of 2006 (More details on this story: http://online.wsj.com/public/resources/documents/info-earn06q4.html ).
The worries about the rising inflation have offset the strong performance of the sector (Details: http://biz.yahoo.com/ap/070117/wall_street.html?.v=33 ). The Tech sector's fall also contributed to what is shaping up to be a pretty weak day on the security markets.
The above concerns do not change the big picture though. Falling oil prices should loosen up the inflation pressure, and the Fed officials feel than can handle inflation and bring it down. Meanwhile, as the MarketBeat blog is stating, the predictions for the global economy are getting more positive (http://blogs.wsj.com/marketbeat/2007/01/17/the-future-looks-bright/ ). The US economy seems to be entering 2007 in good condition, quote: "Most reports ... indicated that economic activity expanded at a moderate pace," the Federal Reserve said (From: http://biz.yahoo.com/ap/070117/fed_economy.html?.v=8 ).
To sum up, it seems that despite some minor problems, the intermediate outlook for the economy looks promising. The question is, how is the market going to incorporate those news.
The DJIA's blue chips are among the stocks pulling the market up, as it has been closing at new all time highs for most of the time in January 2007. Another factor contributing to the rise in stock prices is the very good performance of the financial sector. Examples would be, among other, companies such as JP Morgan, achieving a whooping 68% rise in net income in Q4, comparing with Q4 2005 (More on that: http://online.wsj.com/article/SB116903511859878854.html?mod=home_whats_news_us ), or Merrill Lynch, taking advantage of the strength of the financial marketing in the concluding months of 2006 (More details on this story: http://online.wsj.com/public/resources/documents/info-earn06q4.html ).
The worries about the rising inflation have offset the strong performance of the sector (Details: http://biz.yahoo.com/ap/070117/wall_street.html?.v=33 ). The Tech sector's fall also contributed to what is shaping up to be a pretty weak day on the security markets.
The above concerns do not change the big picture though. Falling oil prices should loosen up the inflation pressure, and the Fed officials feel than can handle inflation and bring it down. Meanwhile, as the MarketBeat blog is stating, the predictions for the global economy are getting more positive (http://blogs.wsj.com/marketbeat/2007/01/17/the-future-looks-bright/ ). The US economy seems to be entering 2007 in good condition, quote: "Most reports ... indicated that economic activity expanded at a moderate pace," the Federal Reserve said (From: http://biz.yahoo.com/ap/070117/fed_economy.html?.v=8 ).
To sum up, it seems that despite some minor problems, the intermediate outlook for the economy looks promising. The question is, how is the market going to incorporate those news.
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