Here is what you need to know.
The Bud-Miller deal may be falling apart. “SABMiller Plc rejected an informal takeover offer from Anheuser-Busch InBev NV of about 66.4 billion pounds ($US100 billion) that it considered too low, according to people familiar with the matter,” Bloomberg reported. SABMiller shares are down by over 3%.
German factory orders posted an unexpected drop. The August reading of German factory orders posted an unexpected decline of 1.8% compared to last month, missing the 0.5% gain that economists were forecasting. For July, factory orders were revised down to a decline of 2.2% month-over-month from the earlier reading of down 1.4%. The euro is up 0.2% at 1.1208.
Australia’s central bank kept policy on hold. The Reserve Bank of Australia held its benchmark interest rate at 2.00%, as expected. The RBA made note of weakness in China and other Southeast Asian economies, but stopped short of suggesting another rate cut is needed. “While growth has been somewhat below longer-term averages for some time, it has been accompanied with somewhat stronger growth of employment and a steady rate of unemployment over the past year,” Reserve Bank of Australia Governor Glenn Stevens noted in the statement. The Australian dollar is stronger by 0.4% at .7110 per dollar.
The yuan is now the fourth most-used payments currency. The Chinese yuan passed the Japanese yen as the fourth most-used currency for cross-border payments, according to Swift data. While still only used in 2.8% of global payments, the yuan has seen a rapid rise as it was just the 12th most-used payment currency three years ago, according to the Wall Street Journal. The US dollar, euro and British pound are the three-most common used payment currencies.
Apple bought an AI startup. Apple announced it has purchased Perceptio, a startup that develops artificial intelligence systems for smartphones. According to Bloomberg, “Perceptio’s goals were to develop techniques to run AI image-classification systems on smartphones, without having to draw from large external repositories of data.” Terms of the deal were not disclosed.
DuPont lowered its forecast and announced its CEO is retiring. The agricultural giant projects operating earnings per share of $US2.75, down from its previous guidance of $US3.10. DuPont’s statement noted, “The revised outlook primarily reflects continued strengthening of the U.S. dollar versus currencies in emerging markets, particularly the Brazilian Real; and a further weakening of agricultural markets, primarily in Brazil.” In addition, CEO Ellen Kullman announced her retirement, and will be replaced by Edward Breen, the man known for breaking up Tyco.
BP will pay a record fine for its 2010 Gulf of Mexico oil spill. US Attorney General General Loretta Lynch announced BP will pay $US20.8 billion to settle civil claims related to its 2010 Deepwater Horizon oil spill in the Gulf of Mexico. “BP is receiving the punishment it deserves, while also providing critical compensation for the injuries it caused to the environment and the economy of the Gulf region,” Lynch said. According to AFP, the deal resolves claims under the Clean Water Act and Oil Pollution Act, and provides economic relief to state and local economies in the Gulf region.
Equifax is upping its bid for Australian rival Veda. The credit agency raised its takeover offer to 2.4 billion Australian dollars, up from 2.3 billion Australian dollars. Veda Chair Helen Nugget said the new offer “reflects Veda’s outstanding market position and represents a strong financial outcome for our shareholders.” According to Reuters, Veda will now allow Equifax to conduct due diligence and will recommend the buyout if a formal offer is made.
Stock markets around the globe continue to climb. Germany’s DAX (+0.3%) paces the gains in Europe and Japan’s Nikkei (+1%) led the way in Asia. China’s Shanghai Composite remained closed in celebration of Golden Week. However, S&P 500 futures are lagging the rest of the world, down 3.50 points at 1971.25.
US economic data is light. The trade balance is due out at 8:30 a.m. ET. The US 10-year yield is unchanged at 2.05%. Earnings reports are slow, but will be watched closely. Pepsi releases its quarterly results ahead of the opening bell and Yum Brands reports after the market close.