Japanese machinery orders, a leading indicator of capital expenditure, have grown at the fastest rate since 1996, surging 19.1% on month in March after slumping 4.6% in February and slaying expectations for a rise of 6%. Companies also expect bookings to grow 0.4% on quarter in Q2. Business investment had long been a weak link in Japan, but "the recovery...remains on track," says economist Marcel Thieliant. The rebound is seen continuing despite an expected fall in demand because of the hike in sales tax last month.
The Chinese property sector cooled further in March as new-home prices increased in 44 out of 70 Chinese cities on a monthly basis, down from 56 in April and the lowest number since October 2012. The real-estate industry had been fairly torrid until early this year, when government measures to restrict house buying and rein in lending started to have a more notable impact. However, the cooling of the sector comes amid concerns about the slowdown in the broader economy.
Swiss voters have overwhelmingly rejected a proposal to institute a minimum wage of 22 Swiss francs ($25) an hour, which would have been the highest in the world. Over 76% of voters cast a "no" ballot. "It's a strong sign to Switzerland as a center of employment," Economy Minister Johann Schneider-Ammann said. "Accepting the initiative would have led to job cuts in economically weak, rural areas."
AstraZeneca has rejected a "final" proposal of £55 a share, or £69B ($117B), from Pfizer (NYSE:PFE), saying that the bid "falls short of AstraZeneca's (NYSE:AZN) value as an independent science-led company." The U.K. company told Pfizer on Friday that any offer would have to be over 10% above the latter's previous bid of £53.50 a share. AstraZeneca said that Pfizer "has failed to make a compelling strategic, business or value case." AstraZeneca's shares were -11.1% premarket.
AT&T has agreed to acquire DirecTV for $48.5B in a cash-and-stock deal worth $95 a share. The agreement would give AT&T (NYSE:T) 20.3M U.S. subscribers and 11.9M in Latin America, and access to the NFL's Sunday Ticket package. AT&T intends to sell its $6B, 8.4% holding in América Móvil (NYSE:AMX), a major rival to DirecTV (NASDAQ:DTV) in Latin America, in order to facilitate regulatory approval of the acquisition and avoid conflicts of interest.
Deutsche Bank intends to raise €8B ($11B) in new capital by issuing 360M shares, 60M of which will be sold to the Qatari royal family. Deutsche Bank (NYSE:DB) plans to offer the remaining stock to existing shareholders via a rights-offering. Insiders expect that the bank will have to offer the stock at about a 25% discount to the current price of around €30 in Frankfurt. The move adds to the €13.2B that Deutsche Bank has raised over recent years.
Johnson Controls intends to spin off its automotive-interiors operations into a joint venture with China's Yanfeng Automotive Trim Systems, which will own 70% of the business and the U.S. company the rest. The JV firm will have expected annual revenues of $7.5B. The non-cash deal comes as Johnson Controls (NYSE:JCI) refocuses more on its higher-margin non-auto interests, although the company will keep its car-seat operations.
Walgreen is reportedly thinking about buying the 55% in European peer Alliance Boots it doesn't own. Taking inspiration from Pfizer (PFE) in its pursuit of AstraZeneca (AZN), Walgreen (WAG) would then move its domicile to the U.K. or Switzerland in order to lower its tax rate and save billions of dollars a year. Walgreen purchased 45% of Boots in 2012 in a cash-and-stock deal worth $6.7B and has a three-year option to acquire the rest.
General Electric is reportedly in talks with nuclear-plant manufacturer Areva (OTCPK:ARVCF) and other French companies about asset sales or partnerships as the U.S. conglomerate looks to persuade France's government to support its bid for Alstom's (OTCPK:ALSMY) energy operations. Meanwhile, Siemens (SI) could formally make a rival offer this week in which it would swap its rail business for Alstom's power assets. However, the latter wants cash and supports GE's (NYSE:GE) bid.
Blackstone has reportedly agreed to sell five Boston-area high-rise office towers to a group led by Canada's Oxford Properties for about $2.1B. Blackstone (NYSE:BX) purchased the assets in 2007. The private-equity firm's $11B real-estate fund from that year, which was used to purchase the Boston properties, is valued at $22B, giving investors an IRR of 13%.
Google unit YouTube has reached a deal to buy Twitch, a site that lets users live-stream their PC/Xbox/PlayStation gameplay, for over $1B in cash, Variety reports. However, the WSJ writes that Google's (GOOG, GOOGL) talks with Twitch are still "at an early stage;" the paper provides no acquisition price. Twitch has 45M+ monthly users, including over 1M who upload/stream videos, sometimes for widely watched competitive events.
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In Asia, Japan -0.6% to 14006. Hong Kong flat at 22705. China -1.05% to 2005. India +0.9% to 24347.
In Europe, at midday, London -0.6%. Paris -0.4%. Frankfurt -0.6%.
Futures at 6:20: Dow -0.4%. S&P -0.4%. Nasdaq -0.4%. Crude +0.6% to $102.67. Gold +0.6% to $1301.
Ten-year Treasury Yield -2 bps to 2.51%.
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