Market commentary: A case for higher interest rates?

It was a quiet start to the last week of the first quarter of 2016, as Easter Monday meant that European markets remained closed. Nevertheless, it was business as usual in Asia and America, where markets remained little changed. Gains in consumer stocks were offset by losses in the energy and technology sectors, and investors digested the February consumer spending data.

Monday’s round of economic data mostly clouded the picture for the rate-setting Fed. A report showed that consumer spending rose by a smaller-than-expected 0.1% during last month. Also, the Fed’s preferred measure of inflation – personal consumption expenditure – was at 1% in the 12 months ended in February. This isn’t exactly very good news, as the Fed considerers 2% inflation to be a healthy level.

One of the biggest movers on the market was Starwood Hotels, which enjoyed a 2.5% rise during Monday’s session after news of a potential bidding war for the hotel group helped boost sentiment in early trading. Starwood, owner of the Westin, Le Méridien, Sheraton, St Regis and The Luxury Collection, among other brands, is said to have received a higher buyout offer of $15 billion from China’s Anbang Insurance Group, which is superior to the $14.41 billion bid it received from Marriott International Inc.

This news comes as the Chinese company is reportedly searching for solid international investments to make up for slowing growth at home. Anbang’s buying spree reflects its desire to diversify its holdings by adding valuable real estate in the United States and Europe.

Pandora Media’s stock tumbled over 9% to trade at $9.91 after the Internet music service said that its chief executive officer, Brian McAndrews, will be leaving the company, effective immediately, after two and a half years in the position. His post will be taken up by company founder Tim Westergren.

In the metals industry, gold futures had a hard day on Monday, falling to their lowest levels in a month as investors speculate that a speech by Fed Chair Janet Yellen and jobs data this week could help make a case for higher interest rates. After sinking to $1,211.80, the precious metal managed to recover some of its losses, ending the day at $1,218.70.

Meanwhile, in the battle of Batman vs. Superman, the winner appears to be Warner Bros. As one of the company’s latest films, “Batman vs Superman: Dawn of Justice” hit screens for the very first time during the Easter weekend. The results were record breaking, enjoying the fourth-biggest global opening in box office history. In its debut weekend, Warner Bros earned an estimate $424.1 million worldwide thanks to its superhero team-up and despite some tough reviews from the critics.

In other company news, Yahoo! Inc. was also trading in the green, after it was reported that Microsoft Corporation executives were in talks with other potential investors to buy the internet portal.

This article was issued by Rebecca Naudi, Analyst at Calamatta Cuschieri. For more information visit, www.cc.com.mt .Theinformation, views and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.