Trump blocks Broadcom's hostile Qualcomm bid, China political shake-up, and U.S. inflation data due.
Not for sale
President Donald Trump’s executive order
blocking Broadcom Ltd.’s hostile bid for Qualcomm Inc. on national
security grounds is being viewed as further evidence of the
administration’s tough stance against foreign takeovers of the country’s
tech firms. The fear was that China would gain an edge
in critical technology by encouraging Qualcomm to reduce R&D. That
could have put Huawei Technologies Co. in the lead in developing next-generation wireless
solutions. The ending of the takeover, however, does not mean
Qualcomm’s problems are over, with Chief Executive Officer Steve
Mollenkopf facing a long to-do list in order to regain the faith of
shareholders. The company’s stock dropped 4.8 percent in pre-market
trading.
Spring statement
At 7:30 a.m. Eastern Time, U.K. Chancellor of the Exchequer Philip Hammond will give his Spring Statement
in which he will update forecasts for the British economy. While there
may not be a huge amount to move markets in his speech, Hammond is under
pressure to end the government’s austerity program – and the budget watchdog reporting an expected improvement in public finances may bolster the case.
China shakeup
Plans presented at China’s National People’s Congress make significant changes to how the government will work in the country, handing more power to President Xi Jinping. The central bank will get more control over the financial sector
as authorities attempt to curb risks in the $43 trillion banking and
insurance industries. There will also be a single agency formed to
manage the country’s international development, including Xi’s “One Belt, One Road” pet project.
Markets rise
Overnight,
the MSCI Asia Pacific Index added 0.2 percent, while Japan’s Topix
index closed 0.6 percent higher as the yen weakened ahead of U.S.
inflation data due later today. In Europe, the Stoxx 600 Index was 0.1
percent higher at 5:45 a.m. in light trading. S&P 500 futures pointed to a gain at the open, the 10-year Treasury yield was at 2.877 percent and gold was lower.
Coming up…
The big data point for markets today is U.S. inflation
for February, with analysts expecting a 2.2 percent increase from a
year earlier. Core inflation is expected to remain unchanged at 1.8
percent. While any surprise in the data is unlikely to derail a Federal
Reserve rate hike this month, it will feed into expectations on the pace
of monetary tightening.