Markets roundup, waiting for inflation convincing signs and Apple | Calamatta Cuschieri

Market watchers were digesting a string of economic data released earlier in the day. Investors are also keeping a close eye on the political developments in Europe, with Germany’s possible coalition and Italy’s nearing election

President of the European Central Bank (ECB) Mario Draghi stated that the euro area economy keeps expanding at a robust pace
President of the European Central Bank (ECB) Mario Draghi stated that the euro area economy keeps expanding at a robust pace

European markets closed higher on Monday as the technology sector led the gains. Tech shares rose over 1% after telecom giants confirmed their plans to introduce new 5G networks. Meanwhile, market watchers were digesting a string of economic data released earlier in the day. Investors are also keeping a close eye on the political developments in Europe, mainly Germany, where Christian Democratic Union voted in favour of a grand coalition with the Social Democrats five months after the country's federal election, and Italy with its looming election.

German DAX gained 0.35% at the end of the trading session. Volkswagen was among main advancers, up 1.81% after the company settled its emissions suit in the US. In Paris, CAC 40 increased 0.51% at the close. London's FTSE 100 ended trade 0.62% in the green.

Inflation still to show signs

President of the European Central Bank (ECB) Mario Draghi stated that the euro area economy keeps expanding at a robust pace, with growth "stronger than previously expected and more evenly distributed across sectors and geographies than at any time since the financial crisis." At the same time, Draghi stressed that the inflation has yet to show more convincing signs of a sustained upward adjustment and reach the desired target of close to, but below 2%.

The adverse cyclical factors which include the dampened economic activity and high unemployment in the aftermath of the sovereign debt crisis, as well as the subdued foreign demand and low oil prices were crucial for the low underlying inflation. However these factors are of temporary nature and should not play a role in the medium-term, adding that the ECB expects that headline inflation will resume its gradual upward adjustment, supported by the central bank's monetary policy measures.

Telecommunications take-over

Telecommunications Company GTT Communications Inc. announced on Monday that it is acquiring Interoute Communications Ltd., a fibre and cloud networking platforms operator, for approximately €1.9 billion in cash. The transaction is expected to close in three to six months. According to the statement, the British firm's European fibre network includes 126 cities across 29 countries. The deal will add 15 data centres, 17 virtual data centres, and 51 colocation facilities, to the US Company’s cloud connectivity platform.

President and CEO Rick Calder stated, this combination will create a market leader with substantial scale, unique network assets and award-winning product capabilities to fulfil clients’ growing needs/demand for distributed cloud networking in Europe, the U.S. and across the world.

Apple news

The Tech Giant is preparing to release new smartphones later this year. These will include the largest iPhone ever, an upgraded handset with the same size as iPhone X and a less expensive model with specs and features already included in the flagship iPhone X.

Apple wants to target the market with a crave for multitasking of so called phablets, whilst also catering for a more affordable version of the iPhone X. Production tests with suppliers are already underway and the models are expected to be announced this coming fall.

Disclaimer:

This article was issued by Rodrick Duca, 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.

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