Five Things Everyone Will Be Talking About Today
China markets rally, Buffett is back on the acquisition trail and Greece looks to seal the deal. Here are some of the things that people in markets are talking about this morning.
Stocks in China rallied with the Shanghai Composite Index closing 4.9 percent higher, its biggest gain in a month. The rise comes after the nation's cabinet approved plans to overhaul state-owned enterprises to boost the economy. Disappointing economic data released over the weekend which showed exports declining more than expected in July did little to dent equity market optimism.
Berkshire Hathaway Inc. is in talks to buy Precision Castparts Corp., a manufacturer of equipment for the aerospace and energy industries. The deal could be worth $30 billion, making it one of Berkshire's largest ever acquisitions. Buffett would be getting more than just a component manufacturer, as Precision CEO Mark Donegan has developed a strong reputation as a dealmaker in his own right.
The Greek government is seeking to conclude talks on a new rescue program by Tuesday to allow national parliaments pass the deal and give Greece access to funds ahead of a payment due to the European Central Bank on August 20. If agreed to, the plan would make as much as €86 billion ($93 billion) available to Greece.
Oil is trading near the lowest level in five months as a rebound in U.S. drilling signals no imminent drop-off in production. Despite the weak prices, speculators have increased bullish bets on the commodity for the first time in seven weeks, according to data from the U.S. Commodity Futures Trading Commission.
The slump in global commodities is hitting African currencies hard this year. This morning the Bank of Uganda raised interest rates 150 basis points to 16 percent in an effort to halt the shilling's slide, which has dropped 21 percent against the U.S. dollar this year. Data compiled by Bloomberg shows that only two African currencies -- the Gambian dalasi and the Somali shilling are higher against the U.S. dollar this year.
What we've been reading
This is what's caught our eye over the weekend.
- China slashes U.S. Treasury holdings by $180 billion -- and the market barely notices.
- Norway sailed through the financial crisis, but is falling victim to the oil crash.
- The euro-area's big four economies are all growing for the first summer since Draghi took office.
- Bond investors in the U.S. are getting anxious, which should be a warning to equity investors.
- Maybe the commodities super-cycle is actually real.
- Donald Trump is the new Ron Paul.
- A new design for harvesting tidal power.
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