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T3's Take 3: Global Markets Party on Strong Data and China's Reawakening


Today's financial recap and tomorrow's financial outlook.

Today on T3 Live

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World Equity Markets

The Shanghai Composite underwent a choppy day. It fell on a drop in the country's trade balance before leaping upwards in the last few hours of trading, finishing up 2.9%. The jump followed the approval of nearly $11 billion in railway projects from China's National Development and Reform Commission.

The Hang Seng gained 3.3%, while Japan's Nikkei fell 2.4% on news that the country's revised GDP showed a contraction of 1.2% last quarte

European equities were up across the board on strong economic data, and follow-through from China's rally. According to data gathered by Eurostat, economic activity grew faster than expected, with GDP up 1.5% vs. the expected 1.2%.

Germany's DAX rallied 1.6% on the country's trade data showing a record trade surplus. The French CAC finished up 1.1%.

US markets saw a sharp jump in stock prices following the cues from overseas.

Markets opened up positive and continued to rise throughout the day, with the S&P 500 closing up 2.5%. All sectors finished up today, with the biotech sector leading the way. The S&P Biotech ETF (XBI) finished up 4.6%. Treasury yields rose slightly as investors moved to stocks to get into the rally.

The VIX dropped 12% due to the buying surge.

The US dollar fell against most major currencies today, but gained slightly against the yen and Swiss franc.

Deals, Deals, Deals

We saw a nice chunk of M&A activity today.

Mylan (MYL) announced that it will start a $27.1 billion bid for Perrigo (PRGO) on September 14. Mylan stated that it is looking to add some of Perrigo's prescription and OTC drugs to its product lineup. Mylan shares finished up 1.4%, while Perrigo rallied 1.9%.

General Electric (GE) received approval from European and US regulators to buy French-based Alstom SA's (ALO) energy business for $9.5 billion. The deal initially came under scrutiny of antitrust legislators saying that the deal may thwart innovation and increase prices by having only two major companies, Seimens AG and General Electric, in the market for gas turbines in Europe.

The Blackstone Group (BX) agreed to buy Strategic Hotels & Resorts (BEE) for $3.93 billion, about $14.25 per share. Blackstone is betting on increased demand in luxury hotels. Blackstone shares finished up 5.2%.

Japan's MS&AD Insurance Group Holdings has agreed to buy UK-based insurer Amlin for $5.34 billion, causing its shares to surge 33%.

Netflix Slump

Shares of Netflix (NFLX) have taken a beating, falling over 16% in the last week. The company announced that it will not be providing its customers with the option of downloading content for offline viewing. Chief Product Officer Neil Hunt stated that providing the option will just confuse users as they will have to "remember what to download, have the proper storage device, etc..." 

Amazon's (AMZN) Prime instant video service does allow its users to download their content for offline viewing.

Hunt explained that the feature is one of the most asked for options from users, but Hunt claims that most asked for does not equate to most used. Most investors believe thisgives Netflix a slight competitive disadvantage.

Netflix shares closed down 3.9%.

Wednesday's Financial Outlook

US economic data for tomorrow will include DOE Short-Term energy outlook reports, MBA mortgage applications and JOLTS job openings.

Overseas economic data will feature British industrial production, Rate Decisions from the Bank of Canada, and Bank of New Zealand, Chinese CPI, and Australia's employment report.

Barnes & Noble (BKS), and HD Supply Holdings (HDS) will announce earnings before the open tomorrow. There are no major earnings announcements after the close.
No positions in stocks mentioned.
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