Big week for US markets; Deal mania; Pound drops

Posted at 3:58 AM, Jul 29, 2019
and last updated 2019-07-29 05:58:44-04

1. A big week: US markets could close out July with a bang.

The Federal Reserve is widely expected to move to cut interest rates at its meeting on Tuesday and Wednesday. That will provide still more juice for stocks, which continued to hit fresh records last week.

But investors shouldn’t get tunnel vision.

Another round of trade talks between the United States and China kicks off Tuesday in Shanghai. It will be the first time that top negotiators meet in person since US President Donald Trump and his Chinese counterpart, Xi Jinping, agreed to a truce at the G20 meeting last month.

There’s also the US jobs report for July, which hits Friday. Investors will scrutinize that data to see if it backs up the Fed’s decision.

2. Deal mania: Britain’s looming exit from the European Union isn’t stopping a wave of dealmaking in the region.

British delivery service Just Eat and Dutch company have agreed to join forces, the companies said Monday.

The combination will create a massive food delivery service better positioned to compete in a crowded market. Amazon backed UK delivery app Deliveroo earlier this year. Uber Eats has also been ramping up its presence in top markets like London.

Investors in both companies appear to like the deal. Just Eat shares jumped 25% in early trading Monday. Takeaway shares rose 4%.

Also on the radar: the London Stock Exchange confirmed over the weekend that it’s in talks to purchase financial data service Refinitiv in a deal worth $27 billion including debt. Private equity firm Blackstone acquired a majority stake in the business from Thomson Reuters just last year. LSE shares are up almost 15% on Monday.

And the Wall Street Journal reported Saturday that pharma giants Pfizer and Mylan are nearing a deal that could create a global powerhouse in the low-price drug market.

3. Investor jitters: Global markets are largely gloomy, but there are a few bright spots.

US stock futures point to a flat open Monday. European markets opened mostly lower, with Germany’s DAX falling 0.1% and France’s CAC 40 dropping 0.2%.

Stocks in Asia also saw declines. Hong Kong’s Hang Seng fell 1% amid concerns that massive protests could hurt the local economy, while Japan’s Nikkei lost 0.2%.

The exception was Britain’s FTSE 100, which rose 1%, even as the pound hit a new two-year low near $1.23 on fears of a messy Brexit.

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4. Coming this week:
Monday — Beyond Meat earnings
Tuesday — Apple, Sprint, Mondelez, Under Armour and Procter & Gamble earnings
Wednesday — Fed rate decision; GE, Occidental Petroleum, Molson Coors, and Qualcomm earnings
Thursday — Bank of England rate decision; General Motors, Dunkin’, Kraft Heinz and Verizon earnings
Friday — US jobs report; Exxon, Chevron and Berkshire Hathaway earnings