Shire-ing away from Takeda, IMF warns on debt
|It was a second day of mixed performance across global stock markets. A warning from the IMF on global debt levels is a worry most investors share but choose to ignore when the economic growth outlook is strong. The pressure on debtholders in any future downturn is what makes a trade war so risky for the global economy.
While stock markets stuttered, two barometers for a strong global growth outlook have been on the rise. Oil and copper prices have been romping higher this week. Although copper gave up its gains to turn lower on Thursday. The jump in commodity prices relates more to supply concerns than optimism about demand.
Some technical resistance on price charts goes some way to explain the hesitation from stock market investors. The DAX index is testing its February 26 high near 12,600. The FTSE 100 too is back near its February 26 peak at 7340. Both levels represent the highest European stocks have been since entering correction territory.
The M&A fever that was capturing the imagination of markets just a month ago seems to be showing signs of unravelling after some high profile failures. Today Shire rejected an offer from Takeda Pharmaceutical. Shire’s latest refusal as well a deal to offload its oncology division, a prize asset that would have been complimentary to Takeda’s portfolio could be the final nail in the coffin of the merger.
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