What You Need To Know This Week — May 4th, 2019
What You Need To Know This Week
A weekly recap to keep you informed on the most important events this week impacting markets, business, tech and the global economy.
BUFFETT BACKS OCCIDENTAL IN PURSUIT OF ANADARKO TAKEOVER WITH $10 BILLION INVESTMENT
Warren Buffett’s Berkshire Hathaway committed a $10 billion preferred stock investment in Occidental, contingent on the completion of its proposed takeover of Anadarko. The Anadarko board of directors deemed Occidental’s $55 billion takeover proposal as superior to Chevron’s $50 billion bid. The Berkshire investment adds significant heft to Occidental’s bid as it competes against the much-larger Chevron to acquire Anadarko.
BEYOND MEAT SIZZLES IN STOCK MARKET DEBUT
Shares in the vegan burger maker rallied 163% in its initial public offering. The profitless Beyond Meat is capitalizing on the growing popularity of plant-based meat alternatives. Beyond Meat’s 163% one-day “IPO pop” was the biggest since 2000.
APRIL U.S. JOB GAINS EXCEED FORECASTS AS UNEMPLOYMENT RATE FALLS TO LOWEST SINCE 1969
The U.S. added 263,000 jobs in April, exceeding economists’ forecasts of 190,000. The unemployment rate dropped to 3.6%, its lowest since 1969. The nearly 50-year low unemployment rate was driven lower by a combination of strong job growth and a nearly half-million reduction in the labor force.
THE FED HOLDS RATES STEADY AS POWELL CLAIMS INFLATION “TRANSITORY”
The Federal Reserve cooled on rate hikes as core inflation came in lower than expected in the first quarter, declining from 1.95% to 1.55%. The current core inflation rate is below the Fed’s 2% inflation target. However, Fed Chair Jay Powell blamed the lower than expected inflation numbers on some “transitory” factors, language that the market interpreted as hawkish.
Recommended Articles, Podcasts, Books and Tweets
Merger arb traders discuss the Anadarko takeover battle on According To Sources
Macquarie Capital Markets Canada shuts its sales, trading and research divisions. They had previously acquired Orion Securities in 2007 for $147 million and Tristone Capital in 2009 for $105 million.
Coworking space leader WeWork filed for an IPO. So did online pet-food retailer Chewy.com. Even Softbank is considering an IPO for its $100 billion Vision Fund.
Alphabet shares fell the most since 2012 on disappointing ad sales growth. The shares fell -8% after the search-engine giant released its first quarter results.
Apple profits dropped 16% while revenue slid 5% for the three months through March 30th. The stock popped 5% on a better than expected forecast and a $75 billion share buyback program.
Risky dividend recaps are making a comeback as private equity firms extract dividends from their portfolio companies funded by issuing debt to hungry leveraged loan buyers.
How Charles Schwab beat its competitors by turning into a personal-finance supermarket.
-The Accelerate Team
