Global markets continue to rally | Calamatta Cuschieri

Markets breaking records, the merger of two industrial giants, and bankruptcy for Toys ‘R’ Us

U.S. stocks rose on Tuesday and major U.S equity benchmarks padded all-time highs
U.S. stocks rose on Tuesday and major U.S equity benchmarks padded all-time highs

U.S. stocks rose on Tuesday, with the Dow hitting its latest in a string of records as investors awaited the start of a two-day meeting of Federal Reserve policy makers. Major U.S equity benchmarks padded all-time highs, the dollar fell and Treasuries edged lower after Donald Trump gave a speech to the United Nations and as the Federal Reserve began a two-day meeting.

U.K. stocks rose Tuesday, aided by gains for supermarket shares and a pullback from around 15-month highs in the pound against the U.S. dollar. The FTSE 100 index rose 0.3% to close at 7,275.25, adding to a 0.5% rise on Monday, when the benchmark breaking a four-session losing streak.

Tata Steel – ThyssenKrupp Merger

India's Tata Steel and German rival, ThyssenKrupp, have taken the first step towards merging their European steel operations. The deal would create Europe's second-largest steel group, after ArcelorMittal. The tie-up will lead to job losses to be shared between the two companies, as the two partners expect the move will require a reduction in workforce of about 4,000 jobs, with half coming from administration and half from production.

The firms have signed a memorandum of understanding that proposes a 50/50 joint venture, leading to annual cost savings of up to 600m euros (£533m; $720m). The two companies have been in negotiations since last year, when Tata scrapped plans to sell off its UK operations. In a statement, the chief executive of ThyssenKrupp, Heinrich Hiesinger, said the two companies needed to consolidate and become more efficient because of increasing pressure from imports, and an overcapacity within the industry.

Toys ‘R’ Us goes bankrupt

Toys 'R' Us has filed for bankruptcy protection in the US and Canada as it attempts to restructure its debts. The move casts a shadow over the future of the company's nearly 1,600 stores and 64,000 employees. The firm was once a dominant player in the US toy market, but has struggled against larger rivals such as Amazon.

A US bankruptcy judge however approved a loan of more than $2bn to help stabilise the toy chain. The aim is to give Toys 'R' Us money and time to prepare for the upcoming Christmas shopping season, during which the company experiences its highest sales volumes. The firm's European operations are not part of the bankruptcy proceedings and Toys R Us says it does not expect any immediate impact on its UK stores.

 

 

Disclaimer

This article was issued by Peter Petrov, Junior Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is 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.

More in Business Comment

Get access to the real stories first with the digital edition

Subscribe