Weekly Market Updates: 05/06/19

Chevron-Occidental Bidding War for Anadarko Heats Up

​Pitchbook data reveals there were 23 deals for $13.4 billion invested capital in M&A markets last week. That is $9.8 billion more capital than the week before on two fewer deals. Two billion-dollar deals, 3M’s acquisition of KCI Holdings and Parker Hannifin’s acquisition of Lord, drove the increase in value from last week, contributing $6.7 billion and $3.7 billion, respectively, to the increase. M&A news was encapsulated by Occidental Petroleum and Chevron’s bidding war for Anadarko Petroleum and their Permian Basin shale-oil fields. Warren Buffett has committed to financing $10 billion of Occidental’s bid.

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Beyond Meat Goes Public and Uber to Go Public This Week

Last week, there were six new initial public offerings that raised $1.1 billion collectively, according to the New York Stock Exchange. Beyond Meat, the producer of plant-based meat alternatives, raised $277 million, and SciPlay, the mobile game developer, raised $352 million. Uber’s initial public offering is expected later this week, which will be the largest company to go public since Facebook did so in 2012. 

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Unemployment Reached 3.6% in April, the Lowest since December 1969’s 3.5% Rate

Among economic news last week:

• The labor market tightened once again in April, adding 263,000 jobs and bringing the unemployment rate down to 3.6%. The unemployment rate hasn’t been this low since December 1969, when it was 3.5%. Further, over the last year, average hourly earnings growth held constant at 3.2%. Although the labor market is experiencing some month-to-month fluctuations, the labor market is still strong, adding well over the number of workers needed to keep pace with new entrants to the labor force.

• The Institute for Supply Management released their Chicago Business Barometer, which fell to 52.6 points in April, from 58.7 in March, the lowest level since the start of 2017. The report cited firms cutting back employment production as domestic demand and global growth soften. A rating above 50 still indicates growth; however, last month’s rating is certainly an indication of a deceleration.

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• The U.S. Bureau of Economic Analysis announced last week that the international trade deficit narrowed in February. The goods and services deficit was $49.4 billion during the month, down $1.8 billion from $51.1 billion in January. Exports totaled $209.7 billion, growing 1.1%, and imports grew 0.2% to $259.1 billion, narrowing the deficit. Year-to-date, the deficit has decreased $8.3 billion, or 7.6%, from the same period in 2018. The U.S. trade deficit in goods with China narrowed by 9.3% from the prior month to $30.12 billion.