Powell puts pressure on markets | Calamatta Cuschieri

Fed rate hike hits markets, Comcast succeeds in Sky bid & Michael Kors adds Versace to portfolio

US markets surrendered earlier gains to close lower on Wednesday after the Federal Reserve raised interest rates by 25 basis points, as widely anticipated, and indicated its intent to tighten once more in December. The Dow Jones Industrial Average fell 106.93 points, or 0.4%, to 26,385.28. The S&P 500 dropped 9.59 points, or 0.3%, to 2,905.97 with the Nasdaq shedding 17.11 points, or 0.2%, to 7,990.37.

Europe’s markets meanwhile closed higher for a second session in a row, ahead of the Federal Reserve decision, which can influence European investors. The Stoxx Europe 600 edged up less than 0.3% to close at 385.06 and Germany’s DAX 30 advanced by 0.1% to 12,385.89. The U.K.’s FTSE 100 rose by less than 0.1% to end at 7,511.49.

Comcast victorious with Sky takeover

Twenty-First Century Fox Inc agreed to sell its 39 percent stake in Sky PLC to Comcast Corp, the companies said on Wednesday, a deal which completes the U.S. cable group’s takeover and ends Rupert Murdoch’s relationship with the UK-based satellite broadcaster. Fox’s sale hands full control of the satellite TV company to Comcast Chief Executive Officer Brian Roberts, giving the U.S. cable company a global footprint of 53 million customers.

Walt Disney Co, which agreed to buy Fox in June for $71.3 billion, said it had given consent to Fox’s decision. The sale of the Sky stake and the divestiture of regional sports networks will reduce Disney’s $71.3 billion cost for the Fox acquisition by roughly $30 billion. That implies the anticipated sale of the sports networks will yield about $15 billion. Disney shares rose 1.8 percent on the New York Stock Exchange to $115.87 in midday trade.

Michael Kors – Versace acquisition

Michael Kors Holdings Ltd. will buy Italian fashion label Gianni Versace SpA for 1.83 billion euros ($2.2 billion), bringing the American luxury company closer to its goal of becoming an international house of fashion brands. Versace adds high-end couture credibility and heritage to Kors. The 40-year-old fashion house, founded by Gianni Versace, celebrates extravagance with its baroque designs, filling runway shows and red carpets with brash prints and vibrant color.

The company said it plans to increase Versace’s sales to $2 billion annually, more than double the current level, expanding the number of stores globally to 300 from about 200 and accelerating e-commerce development. Michael Kors said it will rename itself Capri Holdings Ltd. as it develops its multibrand luxury strategy.

 

Disclaimer: This article was issued by Peter Petrov, trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view 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.

More in Business Comment