Tax reform shakes up equities, M&A deals are parsed and investors price in Brexit uncertainties.

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Tax reform shakes up equities, M&A deals are parsed and investors price in Brexit uncertainties.

November 13, 2017
By Vlad Karpel

Although investor sentiment and attention is focused on parsing tax reform debates, there were a round of major moves in equities today.  We’re seeing two big merger and acquisition stories today- with Qualcomm Inc. (QCOM) rejecting a Broadcom Ltd. (AVGO) takeover bid as well as a potential Hasbro Inc. (HAS) takeover of rival toymaker, Mattel Inc. (MAT).  

Qualcomm’s board unanimously rejected the bid valued at $130 billion, saying that it ‘significantly undervalues’ Qualcomm. The confidence to reject the takeover and expound on its positions in several business sectors have seen share prices tick up today. At the time of publication, Qualcomm is up 1.83% and Broadcom is up 0.02% after falling 0.7% in early trading.

There are reports of a potential takeover deal with Hasbro acquiring Mattel, which would result in the merger of the U.S.’s two largest toymakers. Mattel’s current market value is around $5 billion, about half as much as Hasbro’s $11 billion valuation. Although no details are available, the offer has investors interested to say the least.

Tax-reform is the eclipsing story of the day, with two major factors working to spark a potential pullback in short-term market momentum. Continued discrepancies between House and Senate drafts of the bill, combined with a year-long timeline until corporate reform gets enacted, may slow down immediate bullish market sentiments. Growing political strife within Britain’s ruling Conservative party has been brought into focus, as PM Theresa May’s position comes under question. Infighting would add difficulty to striking a favourable Brexit deal with the E.U., so investors are keeping a close watch here.   

At the time of publication, the DJIA is up 0.01%, or 1.43 points, at 23,424. The S&P 500 is trading at 2,582- up 0.01% from the open. The Nasdaq-100 is up 0.08% at 6,756.

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