Exchange traded funds (ETFs) are following global equities higher early today after China refrained from hiking interest rates and as several deals were announced. Investors also expect congressional approval of a tax-cut extension in the United States, which would improve confidence in the economy.
- The Democratic-led U.S. Congress moved on Monday toward grudging approval of President Obama’s deal with Republicans to extend expiring tax cuts, even for the wealthiest Americans. Backers were expected to muster on Monday the needed 60 votes in the 100-member Senate to clear a procedural hurdle, before passage on Tuesday or Wednesday, reports Reuters. Silver and copper ETFs have become the darlings of the market today; PowerShares DB Silver (NYSEArca: DBS) is up 3% so far; in the last three months, it’s up 44.3%.
- Asian shares vaulted on relief that Beijing refrained from raising interest rates over the weekend. The Associated Press reports that China’s stocks got a boost after fears of a weekend rate high fizzled even amid news that inflation surged to a 28-month high of 5.1 percent in November. Instead, the central bank ordered another increase in banks’ capital reserves in the latest move to reduce excess liquidity. Market Vectors China (NYSEArca: PEK ) is up almost 3% in response to the news.
- European stocks rose for a sixth consecutive session Monday as mining stocks benefited from increased clarity on China’s economic policy and several deals were announced. The move came as a relief to European investors, who have been concerned that a tightening of monetary policy in China, one of the world’s biggest growth engines, could stifle the global economic recovery, reports MarketWatch. The SPDR Euro Stoxx 50 ETF (NYSEArca: FEZ ) is up in morning trading.
- A slew of mergers and acquisitions are happening this morning, too. MarketWatch reports that General Electric Co. (NYSE: GE) on Monday announced a $1.3 billion deal for U.K. energy-equipment group Wellstream Holdings PLC, as part of a move to boost the U.S. conglomerate’s presence in the oil-and-gas sector, especially in Brazil, the company said in a statement. Dell Inc. (NYSE: DELL) said it would pay $27.75 a share for Compellent Technologies Inc. (NYSE: CML), slightly more than Dell indicated it would pay for the data-storage company last week. Shares of Dionex Corp. (NYSE: DNEX) could be active after Thermo Fisher Scientific Inc. (NYSE: TMO) said it plans to acquire the laboratory-equipment maker for $118.50 a share in cash, in a deal worth $2.1 billion. The drug sector could garner some attention after French drug giant Sanofi-Aventis SA (NYSE: SNY) said Monday that it’s extending its offer for Genzyme Corp. (NYSE: GENZ). Index IQ ARB Merger Arbitrage (NYSEArca: MNA) is flat so far, but it could benefit from these deals in the long run, so keep an eye on it.
Gregory A. Clay contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.