U.S. stock-index futures were little changed, indicating the benchmark Standard & Poor’s 500 Index will remain near a three-month low.
Transatlantic Holdings Inc. (TRH), the reinsurer formerly owned by American International Group Inc., surged 10 percent in German trading after agreeing to merge with Switzerland’s Allied World Assurance Company Holdings AG. Bemis Company Inc., a maker of packaging and pressure-sensitive materials, slipped 1.9 percent after Goldman Sachs Group Inc. downgraded the shares.
Futures on the S&P 500 expiring in September slipped less than 0.1 percent to 1,264.1 at 10:20 a.m. in London. Dow Jones Industrial Average futures gained 5 points, or less than 0.1 percent, to 11,878 after the gauge completed the longest stretch of weekly losses since 2002 on June 10.
More than $1 trillion has been erased from U.S. equity markets since the S&P 500’s peak on April 29, leaving the measure trading at about 12.8 times its companies’ estimated earnings. That’s the cheapest valuation since August.
“It is becoming apparent to everyone that this is not an investors’ market,” said Toby Campbell-Gray, head of trading at Tavira Securities Ltd. in Monaco. “Macroeconomics continue to be sluggish and valuations are now completely subjective in most industries. Proper investors will start to defend their capital and go to lower risk strategies.”
New York University professor Nouriel Roubini warned in an interview that a “perfect storm” of fiscal woe in the U.S., a slowdown in China, European debt restructuring and stagnation in Japan may converge on the global economy.
There’s a one-in-three chance the factors will combine to stunt growth from 2013, Roubini said in a June 11 interview in Singapore. Other possible outcomes are “anemic but OK” global growth, or an “optimistic” scenario in which the expansion
A Commerce Department report tomorrow may show U.S. retail sales fell for the first time in 11 months in May. A 0.5 percent drop in purchases would follow a 0.5 percent gain in April, according to the median forecast of 62 economists surveyed by Bloomberg. Other data might show inflation eased.
Transatlantic rallied 10 percent to $48.42 after agreeing to merge with Allied World Assurance in a $3.2 billion deal that creates a reinsurer with operations in 18 countries. Allied will exchange 0.88 of a share for each Transatlantic share to create TransAllied Group Holdings AG, with Transatlantic’s shareholders owning about 58 percent of the combined company, the insurers said yesterday in a statement. Allied World shares didn’t trade in Europe.
Deere & Co. (DE), the world’s largest farm-equipment maker, rose 0.4 percent to $82.16 in German trading. North American construction equipment markets are growing, analysts at Citigroup Inc. led by Timothy Thein wrote in a note to clients.
Cerus Corp. (CERS), the developer of systems to enhance the safety of blood transfusions, increased 1.5 percent to $2.72 after signing a distribution agreement with Ilex Medical Ltd.
Bemis lost 1.9 percent to $31.99 after Goldman Sachs cut its rating on the shares to “sell” from “neutral.”
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