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Samsung To Buy Car Tech
Harman, a US automobile electronics company, will be bought by Samsung of South Korea for $8bn.
Editor’s Remarks: Samsung is making a bold step into the auto tech market after it created a team last year to do just that. Samsung does not have much of a presence in the market, but Harman is an established company that is now not only the largest overseas deal by Samsung but also a provider of devices for BMW, Toyota and VW. Samsung is going with the route of diversifying and spreading its interests after its Galaxy Note disaster and the apparent peaking of the smartphone market.
What to watch: Samsung, Continental, Bosch
Trump Goes Further Right
Donald Trump has selected Stephen Bannon, head of Breitbart News, as chief strategist.
Editor’s Remarks: The selection immediately created a furore from the Democratic Party as the Breitbart site is often described as misogynistic and pro-white supremacy. A very vocal anti-establishment and pro-Trump supporter, the Breitbart site and its head will not ease those who hoped Trump would move away from his very right-wing campaign rhetoric. Donald Trump, a day after appearing to signal a closer relationship with the Republican Party and unifying vision, has turned the tables with a strong anti-establishment move.
What to watch: Donald Trump, Stephen Bannon, Breitbart News, Reince Priebus
Bond Bull Market Dying
The bond market has suffered its worst rout in over a year after $1trn of capital has been shifted out of the market.
Editor’s Remarks: Donald Trump’s election is seeing markets turn from the bull run in bonds that has lasted almost 30 years. The US equity market looks set to be the focus for the foreseeable future. Last week was the best one for the Dow Jones Industrial Average had in about five years. Many international investors are going to wait out the coming months, hoping for more clarity around Trump’s policies before moving more capital from bonds. However, with the world seeing such a swing in sentiment, their hopes might be in vain.
What to watch: GBP/USD, EUR/USD, Sovereign Bonds, ECB Monetary Policy, BOJ Monetary Policy
Siemens Moves Into Software
Mentor Graphics, a US industrial software company, will be bought by Siemens, the German engineering firm, for $4.5bn.
Editor’s Remarks: Siemens has been undergoing a change under Chief Joe Kaeser to increase profits and focus on sectors such as software. Software is considered one of the fastest growing industries and Mentor is at the forefront with its software that helps with the designing and testing of semiconductors, another hot industry at present. Siemens hopes that the industrial technology world continues to expand as it plans to list its healthcare division.
What to watch: Siemens, Mentor Graphics, Intel, Samsung, Qualcomm
Another Pilot Strike
Lufthansa pilots look set to strike again with the Vereinigung Cockpit Union failing to agree on a pay rise for its 5400 pilots at the company.
Editor’s Remarks: The airline industry has seen numerous strike threats this year with UPS, CityJet, El Al and British Airways all seeing various employee groups threaten to go on strike over the past five days. Airlines are benefiting from low oil prices over the past few years, but companies are hesitant to raise wages with competition only increasing. Lufthansa pilots are pointing to its €5bn in profits, but the company stresses the importance of cutting costs. Despite the frequency of the strikes, Lufthansa looks like it may have to deliver sooner rather than later.
What to watch: Lufthansa, CityJet, UPS, El Al, EasyJet, British Airways