Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Telecom stocks lead European bourses higher on Telecom Italia-KKR bid

By Neil WilsonMarket OverviewNov 22, 2021 10:39
uk.investing.com/analysis/telecom-stocks-lead-european-bourses-higher-on-telecom-italiakkr-bid-200503006
Telecom stocks lead European bourses higher on Telecom Italia-KKR bid
By Neil Wilson   |  Nov 22, 2021 10:39
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Stocks in Europe started mildly higher, shrugging off some of the caution that we saw at the tail end of last week on lockdowns in Austria and elsewhere. Telecoms stocks rallied as KKR made a bid for Telecom Italia (MI:TLIT); BT (LON:BT) and Vodafone (LON:VOD) led the FTSE 100 higher with help from BP (LON:BP) and Antofagasta (LON:ANTO). Vivendi (PA:VIV), a major shareholder in Telecom Italia, led the Stoxx 50 higher. Telecom Italia itself rallied 22% on the news. There has been a lot of speculation about a possible takeover of BT of late, so the move by KKR creates some further excitement that Altice’s Patrick Drahi could launch a bid. A no-bid clause preventing Altice offering for BT expires Dec 10th.  More broadly, if private equity is starting to sniff around this sector then it suggests there could be value to be found in other names; it underlines just how unloved a corner of the market it has become.

Inflation remains on everyone’s minds – for now the benign approach of the Federal Reserve and European Central Bank is keeping real yields pinned to the floor, which is supportive of risk, and both European and US stock markets continue to trade around their all-time highs. The market got a little frightened last week as European nations started to crank up their lockdown mechanisms again. This probably doesn’t amount to the kind of economic impact as previous ones, even if Germany locks down its Christmas markets and so on. Meanwhile, the US has put all that nonsense behind it, so the market is not overly concerned about a winter of localised Covid restrictions. Also consumer sentiment does not equal market sentiment when the liquidity is so ample and monetary and fiscal policy so loose.

Strong earnings from the US retailers helped the S&P 500 eke out a gain last week, whilst megacap tech lifted the Nasdaq Composite to a gain of 1.2%. In contrast the pressure on energy/financials left the Dow nursing a loss of 1.3% for the week. Futures are pointing higher on Monday.  

Oil is a tad higher to start the week but looking cautious, with WTI holding a $76 handle as sellers remain in charge. Gold trades around $1,850 as deeply negative real rates do battle with the dollar’s strength. EURUSD is testing last week’s 16-month lows again this morning. 

This week is a holiday-curtailed one – the US stock market will be closed for Thanksgiving on Thursday, and it’s a half day on Friday. The key focus during the week will be president Biden’s pick for the Fed chair – does he stick with Powell or opt for Brainard? Brainard could be even more dovish than Powell is, and possibly a lot tougher on bank regulation. But more importantly, does she have a strong enough commitment to climate?  

On the data front we are looking to Wednesday’s US PCE inflation, durable goods orders, Q3 GDP 2nd reading and minutes from the last Fed meeting, which will be parsed closely for two things: a) how worried are policymakers about inflation and b) how do they view how near the US labour market is to the level at which they can start thinking about thinking about raising rates. Richard Clarida – stepping down in a couple of meetings – said on Friday that the Fed could speed up the rate at which it tapers QE. 

Also this week, we should hear from the Bank of England’s Haskel, with traders looking anything solid on whether a December rate hike is a goer or not.  We haven’t heard from Haskel since the summer. In May he said he’s not worried by inflation, and in July said there was no need to reduce stimulus in the foreseeable future - we make him a dove and his vote not required for a hike - so this needs to be considered when reading his comments. On Friday chief economist Huw Pill said he doesn’t know which way he will vote in Dec.  

Telecom stocks lead European bourses higher on Telecom Italia-KKR bid
 

Related Articles

Neil Wilson
Stocks Rise Ahead Of FOMC Meeting By Neil Wilson - Jan 26, 2022

Another day, another wild ride. Stocks in the US remained hugely volatile on Tuesday, plunging and rebounding to finish down but well off the session lows. The S&P 500 closed...

Telecom stocks lead European bourses higher on Telecom Italia-KKR bid

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Any information, analysis, opinion, commentary or research-based material on this page is for information purposes only and is not, in any circumstances, intended to be an offer of, or solicitation for, a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any person acting on it does so entirely at their own risk and ETX Capital accepts no responsibility for any adverse trading decisions. You should seek independent advice if you do not understand the associated risks.
Continue with Google
or
Sign up with Email