 "Dynamic Capital")
European stocks saw a rise on Monday, led by gains in telecom and financial corporations despite Unilever having its worst day in 13 years after Kraft Heinz walked away from its takeover attempt. Michael Mullen, a Kraft Heinz spokesman explained, “Our intention was to proceed on a friendly basis, but it was made clear Unilever did not wish to pursue a transaction. It is best to walk away early so both companies can focus on their own independent plans to generate value.” Unilever’s stock rose 13% on Friday on news of the potential merger as the potential plans were leaked early to the press, only to fall over 7% on Monday after it became clear Unilever was not indicating any interest in the offer. Uncertainty over the political climate (including tax reform and regulation cuts), and the timing of an increase in the Federal Reserve interest rate, kept the dollar in check, playing into Trump’s plans to increase exports by preventing relative price increases from an overvalued dollar to countries looking to buy American goods.
Due to the Presidents Day Holiday in America, activity was lower than usual in Europe as US investors play a huge role in European markets. Despite decreased activity from America and the falling through of the Unilever buyout, the pan-European STOXX 600 was up 0.1%, nearly matching the 14-month high it touched last week. Deutsche Telekom gained a whopping 3% after a report released by Reuters broke news that Japan’s SoftBank would be willing to relinquish control of Sprint (S.N) to Deutsche Telekom’s T-Mobile US (TMUS.O) to finalize a merger of the two US cell phone providers. The Royal Bank of Scotland saw the largest daily increase in share price as owners and investors alike were encouraged about intentions to abandon the proposed sale of its Williams & Glyn unit.
Japan’s Nikkei index also rose 0.1% today as China’s blue-chip CSI 300 index saw its biggest daily increase in six months, closing at 1.5% gains for the day on news that pension money will be moved into the financial market as early as this week. The dollar fell 0.1% against a basket of major competitive currencies after US bonds fell on Friday, and today the euro rose 0.1% while the Japanese Yen fell 0.2% when compared to the US Dollar. However, the dollar was at its highest for over a month last week after US Fed Chair Janet Yellen said it would be unwise to delay raising interest rates, so the fact that it is down today seems to be normal fluctuation.