After a great week last week courtesy of Federal Reserve interest rate cuts, most markets are subdued in the early going today. That includes stocks, crude oil, and gold. The dollar is a bit higher, while Treasuries are slightly lower.
Troubled chipmaker Intel Corp. (INTC) is attracting interest from strategic and financial buyers, according to media reports. The Wall Street Journal said late last week that Qualcomm Inc. (QCOM) was considering acquiring the firm, while Bloomberg reported today that Apollo Global Management Inc. (APO) might inject $5 billion into the company in exchange for a sizable equity stake. INTC shares have plummeted over the past year amid strategic missteps, layoffs, and a dividend suspension.
Intel Corp. (INTC)
Lower interest rates will help home buyers, credit card borrowers, and other consumers and businesses. But they’ll come too late for some commercial real estate owners, developers, and debtors. Some $19.2 billion in CRE loans were in foreclosure as of August, triple the level in January. Banks and other creditors have already taken possession of many troubled properties, with the former owners already taking big losses.
Could China be planning a big stimulus package (finally)? The People’s Bank of China just cut interest rates, while governor Pan Gongsheng announced a press conference tomorrow with two other key economic policymakers. That has markets abuzz about the possibility of more aggressive economic help.
Chinese 10-year note yields hit a low of 2.03% overnight, while the CSI 300 Index rose four days in a row – the longest stock market rally in two months. The country is suffering from an $18 trillion real estate wipeout, as well as a long deflation streak. Here in the US, the iShares China Large-Cap ETF (FXI) has lost 25% of its value in the last half-decade.
