Before the bell: rumor mill at full speed

Mergers, acquisitions and deals. UniCredit seeks rapprochement with Commerzbank and Qualcomm reportedly interested in Intel. Japan remains closed today.

On Friday, both the S&P 500 (-0.2%) and the Nasdaq (-0.4%) gave back a small portion of their gains from the previous day. On a weekly basis, there was still a nice gain of one and a half percent for both indices. Japan (+2.8%) and Hong Kong (+5.1%) did even better, but in Europe stock markets posted losses of just under one percent on a weekly basis. Friday was a bad day for shareholders of FedEx (-15.2%) and Mercedes-Benz (-6.8%). Those two fell sharply after a profit warning. Novo Nordisk (-5.4%), Deutsche Post (-4.4%) and ASML (-4.2%) also lost ground. In contrast, Nike (+6.8%), Vistra Corp (+8.1%) and Constellation Energy (+22.3%) posted big daytime gains. In a predominantly red Bel20 (-0.9%), only UCB (+1.7%) and Cofinimmo (+0.4%) managed to post gains. Umicore (-7.2%) performed the worst.

The Tokyo Stock Exchange remains closed today. The Japanese celebrate the moment when the sun is perpendicular to the equator. In Hong Kong, share prices are up an average of 0.6%. Those gains are still modest all in all, as China’s central bank announced this morning that it will inject $33.3 billion, converted, into the market. The 14-day repo rate will be lowered by 10 basis points to 1.85%. In Brussels, we get half-year results from water improver Ekopak. In the United States, we get aftermarket results from AAR Corp, a company that provides aircraft maintenance services to commercial and government customers.

No Commerz 

With all this focus on U.S. technology companies, one would almost forget that money is also being made elsewhere in the stock market. Just look at Italian bank UniCredit. Two years ago, a share of the bank cost barely 10.8 euros, Friday it was 37.8 euros. UniCredit now wants to use that strength to seek rapprochement with Commerzbank. The German bank has long been looking for a partner, but the German government does not seem to readily approve of a possible merger or takeover of a major German financial player by an Italian rival. However, it is the German government that recently sold 4.5% of Commerzbank to UniCredit. But in addition, UniCredit also bought the same stake on the stock exchange. The Italians are not planning a hostile takeover. Will we get to hear this week what UniCredit does plan to do with Commerzbank?

In the shop window

According to The Wall Street Journal, Qualcomm is said to be interested in a takeover of chipmaker Intel. The rumor caused Intel shares to finish 3.3% higher Friday in advance, while Qualcomm lost 2.9%. Intel shareholders have already seen more than 50% of its market value go up in smoke since January. Once the king of the chip industry, the company has missed one or more trains in recent years. Qualcomm is best known for its Snapdragon processors and modems, which it designs for mobile devices. The company has been interested in the personal computer market for some time. Both companies are keeping their lips tightly sealed and refuse to comment on the rumors.

Did you know…

Qualcomm is one of the companies that played a major role in the development of mobile phones? The company first talked about CDMA in 1989, which later evolved into the 3G network. Today, you can find the company’s technology in just about every smartphone.