Weekly Market Updates: 3/25/19

FIS Acquires Worldpay in the Payment Industry’s Largest Deal Ever

Pitchbook data reveals there were 15 M&A deals in the U.S. last week for combined capital of $36.8 billion, eight fewer deals than the week before but for $19.5 billion more in capital consideration. Fidelity Information Services’ $43-billion acquisition of Worldpay, a leading provider of payment processing services, was the largest deal of the week. Also, Peugeot, a French auto manufacturer, reportedly approached Fiat Chrysler about a merger earlier this year. Fiat Chrysler rebuffed the deal that would’ve formed a $45-billion industry giant.

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Levi Strauss Goes Public, Pricing Their IPO Above the Initial Target Range

According to the New York Stock Exchange website, two companies went public last week: blue jean retailer Levi Strauss and Chinese online brokerage firm Up Fintech Holding. The two companies raised a combined $820.8 million, with about $717 million going to Levi Strauss. This is Levi’s second time going public. Also, Lyft is set to finally debut on the Nasdaq in the middle of next week and Pinterest revealed its S-1 filing for going public sometime in April.

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Federal Reserve Elects to Keep Rates Unchanged Amid Slowing Domestic Growth

Among news last week:
 

• The Federal Open Market Committee (FOMC) held their March meeting last week, deciding to leave interest rates unchanged for the time being. Eleven of the seventeen policy decision-makers believe that rates won’t need to be raised for the remainder of the year, up from just two members in December. Citing slowing domestic and international economic growth, the FOMC left the Federal Funds Rate at a range of 2.25% to 2.5%. In May, the Fed will also slow the unwinding of its balance sheet by buying back more bonds and Treasury securities to replace the maturing assets.

• Existing home sales in the U.S. surged 11.8% last month, the largest gain since February 2015. As the Spring selling season gets underway, lower mortgage rates and attractive prices from a cooling market are encouraging buyers to rejoin the market. However, sales volume for existing homes is down 1.8% from this time last year, indicating the market is in a recovering state. The median sales price of a previously owned home in February was $249,500, up just 3.6% from a year earlier, a rate closer in line with income gains and slower than in early to mid-2018.

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• The number of Americans filing for new unemployment benefits fell by 9,000 to 221,000 for the week ending March 16, showing that slowing growth is not holding back the strength of the labor market. The four-week moving average of new benefit claims ticked up to 225,000. That measure removes some of the week-to-week volatility to provide a clearer image of the trend in unemployment claims. Recently, high job growth and low unemployment has served to create a tight labor market that has managers willing to pay more to find and keep talent, spurring some of the highest wage growth in this business cycle.