Paul Laverty, head of Business Development Ireland with online broker DEGIRO, discusses the major market stories for April.
The most talked about IPO of the year so far has finally arrived. Snap Inc, the parent company of the picture-messaging app Snapchat, listed on the NYSE on March 2nd and was immediately met with enthusiasm from investors.
After an initial pricing of $17 per share the day prior, the stock soared 44% during its first day of listing to close at $24.48. It would then go ahead to hit a high of $29.44 the following day before returning to around $20, where it stands as of the time this piece goes to print.
The listing has been especially popular with a group that had previously been hesitant to invest: millennials. On the website StockTwits.com, a Twitter-like platform for stock tips popular with 18 to 34 year-olds, Snap Inc was the most discussed stock for the days surrounding the listing.
Snap is the most recent high-profile Silicon Valley tech startup to list publically and the first to garner so much attention since Facebook’s IPO in 2013, or Twitter’s in 2013. Other prospective tech IPOs in the upcoming years include Uber, Spotify and Airbnb.
FED RATE HIKE
After months of speculation, the US Federal Reserve surprised no one by raising rates during its March meeting for the second time in the past half-year.
After a strong jobs report added a quarter of a million jobs in February, bringing unemployment to 4.7%, doubts were low that the Fed would stick to its plan of quarter per cent interest rate increases over the next year. The Federal Funds Rate target range now stands at 0.75%-1.00%.
US stocks responded positively to the news, signalling that the move is due to a robust economy, rather than needlessly restrictive monetary policy. The Dow finished up 0.54% for the day with the S&P 500 up 0.84%.
2017 is preparing to be an interesting year for industries highly reliant on exported goods. One such industry is the European, and particularly German, auto industry.
Still unclear though is how Trump’s upcoming ‘America first’ policy will affect European auto manufactures and how European goods will be taxed overseas
Manufacturers, such as BMW, Daimler and VW are extremely dependent on the health of the global economy. With a relatively weak euro making auto sales cheaper outside of the EU, German cars have enjoyed a prime position in recent years.
Still unclear though is how Trump’s upcoming ‘America first’ policy will affect European auto manufactures and how European goods will be taxed overseas.
Taking advantage of the situation is China, which has overtaken the US as the largest trading partner of Europe’s largest economy. China is currently involved in trade negotiations with Germany over a fixed rate for electric cars.
The country’s proposal that 8% of all cars should be electric in 2018 is facing difficulty due to capacity issues with German manufacturers. A shift to a later date is currently being discussed.
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