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Market Braces for Rate Hike, Intel Buys Mobileye for $15B
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Monday, March 13, 2017
Pre-market futures are in the green, albeit very modestly, ahead of the first opening bell of this trading week. Market participants have grown sanguine to the idea that the Federal Open Market Committee (FOMC), which meets Tuesday and Wednesday this week, will agree to raise interest rates another quarter of a percent to a 75-100 basis-point range. But the tone of Fed Chair Janet Yellen’s statement following the decision is of even bigger interest to those looking for information on how many rate hikes we might expect in calendar 2017.
Last Friday’s non-farm payroll numbers were the final potential barrier to a coming rate hike. With 235K new jobs added in the month of February, including notable improvements in Construction and Manufacturing as well as the Labor Force Participation Rate, the jobs market is proving itself easily strong enough to withstand an interest rate hike. The Fed, which under Yellen’s watch has been interested in “running hotter for longer,” has finally seen economic growth manifest to levels that point to interest rate levels getting back to “normal” historically.
Thus, the coming rate hike. It has cooled the bull market rally somewhat, but as indexes run near all-time highs this was bound to happen in some respect regardless. Now the question is whether we’re looking at 3 potential rate hikes this year, or perhaps even more. Wednesday’s statement from Yellen is highly anticipated, as a result.
Mobileye Bought by Intel for $15 Billion
Intel (INTC - Free Report) makes a big move before the opening bell, buying self-driving technology firm Mobileye (MBLY - Free Report) for around $15 billion. This amounts to a 34% premium to the Israel-based firm’s Friday closing price. This deal comes as a surprise to the early market, and looks to have been kept nicely quiet ahead of the announcement.
This is a big deal for Intel, as well; growth for giant tech firms has been harder to come by without investing in new businesses, and often these companies find themselves in catch-up mode as they try to keep up with industry competition. Intel’s move this morning puts the company out in front of IBM (IBM - Free Report) and others as it takes an aggressive step toward the self-driving business, which looks to be growing very quickly overall. It will now be up to Intel’s competitors to find their way into this exciting new technology.
Image: Bigstock
Market Braces for Rate Hike, Intel Buys Mobileye for $15B
Monday, March 13, 2017
Pre-market futures are in the green, albeit very modestly, ahead of the first opening bell of this trading week. Market participants have grown sanguine to the idea that the Federal Open Market Committee (FOMC), which meets Tuesday and Wednesday this week, will agree to raise interest rates another quarter of a percent to a 75-100 basis-point range. But the tone of Fed Chair Janet Yellen’s statement following the decision is of even bigger interest to those looking for information on how many rate hikes we might expect in calendar 2017.
Last Friday’s non-farm payroll numbers were the final potential barrier to a coming rate hike. With 235K new jobs added in the month of February, including notable improvements in Construction and Manufacturing as well as the Labor Force Participation Rate, the jobs market is proving itself easily strong enough to withstand an interest rate hike. The Fed, which under Yellen’s watch has been interested in “running hotter for longer,” has finally seen economic growth manifest to levels that point to interest rate levels getting back to “normal” historically.
Thus, the coming rate hike. It has cooled the bull market rally somewhat, but as indexes run near all-time highs this was bound to happen in some respect regardless. Now the question is whether we’re looking at 3 potential rate hikes this year, or perhaps even more. Wednesday’s statement from Yellen is highly anticipated, as a result.
Mobileye Bought by Intel for $15 Billion
Intel (INTC - Free Report) makes a big move before the opening bell, buying self-driving technology firm Mobileye (MBLY - Free Report) for around $15 billion. This amounts to a 34% premium to the Israel-based firm’s Friday closing price. This deal comes as a surprise to the early market, and looks to have been kept nicely quiet ahead of the announcement.
This is a big deal for Intel, as well; growth for giant tech firms has been harder to come by without investing in new businesses, and often these companies find themselves in catch-up mode as they try to keep up with industry competition. Intel’s move this morning puts the company out in front of IBM (IBM - Free Report) and others as it takes an aggressive step toward the self-driving business, which looks to be growing very quickly overall. It will now be up to Intel’s competitors to find their way into this exciting new technology.
Mark Vickery
Senior Editor
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