The FTSE 100 has drifted a little lower in early trade at the start of the week after the benchmark posted impressive gains last time out. One possible reason for the selling is news over the weekend that China has cancelled scheduled trade talks with the US, but with declines of around 10 points at the time of writing it seems more likely to be just a little pullback following a decent rally. The pound is a little higher on the day despite growing speculation that the government may call a snap election, with Theresa May’s “strategists” apparently seriously considering attempting to take advantage of a recent slump in the polls for opposition leader Jeremy Corbyn, seemingly unperturbed by the recent negative Brexit developments.
Sky’s the limit?
Shares in Sky have jumped around 9% to trade within touching distance of the £17.28 that Comcast (NASDAQ:CMCSA) offered to beat Twenty-First Century Fox for the broadcaster in a rare closed-bid auction over the weekend. The stock has more than doubled since these industry heavyweights began a bidding war for Sky and the winning bid was well above the £15.67 offered by Fox. The situation is complicated further however by Fox already owning 39% of Sky, which it has agreed to sell to Disney in a separate deal, with the stake valued in excess of $15B using Comcast’s £17.28 per share offer. Fox/Disney have not yet said whether they will accept this offer and without it, Comcast will need more than 80% of the remaining stock for its bid to cross the threshold for acceptances. Disney may look to leverage this to their advantage and while this takeover saga is almost certainly close to finishing, there could still be 1 or 2 twists and turns just yet.
Crude Oil hits fresh 4-year high
The price of Oil, as taken by the front month Brent crude contract, has hit its highest level in four years after the world’s biggest producers refrained from agreeing upon a production increase over the weekend. The OPEC+ group which includes Russia had been rumoured to be considering raising their output by 500k barrels per day at their meeting in Algeria and this speculation caused a swift drop in the price on Friday afternoon. This rumour was given greater credence by a Trump tweet a couple days beforehand in which the US president called for the organisation to get prices down, but the inaction has buoyed the market which has opened up strongly following the inaction. Fears of Iranian production being hit by the imminent US sanctions have caused some to predict a strong move higher ahead for crude, and the unwillingness of OPEC and other key producers to attempt to offset this increases the risks of a supply shock further, which could feasibly drive prices as high as $90 or even $100 a barrel by year-end.