(This is Mark Vickery covering for Sheraz Mian.)
With the Dow up five days straight and oil now perched above $40 a barrel, we see futures up this Friday. This week — complete with a dovish opinion from the FOMC regarding forward interest rates and some better-than-expected earnings numbers — has been an island of market strength in a so-far volatile start to the first 12 weeks of the year.
Starwood’s (HOT) deal with Anbang has been signed this morning by the Chinese insurer — and now burgeoning global hotelier — to purchase Starwood for $78 per share. It’s an all-cab, fully financed deal, and reportedly will be signed by Starwood once the 5-day grace period given by Marriott (MAR), which had positioned itself to purchase Starwood before the Anbang bid. No less than $400 million may be due Marriott if its deal with Starwood goes by the wayside, which it looks to be.
Starwood is trading north of the $78 per share purchase price, up more than $3 per share to $79 and change. Perhaps pre-market traders this morning are thinking we may be seeing a counter-offer from Marriott, but it’s too early to say at this point.
Crude oil prices swept past the (nowadays) psychologically satisfying $40 per barrel to $42 and change. We never really did see a boost in consumer spending when oil prices fell to below $30 just a few weeks ago, but we are indeed seeing immediate economic strength in the market now that oil prices are up again. The attack at a Statoil-BP plant in Algeria was the latest occurrence to prop up oil prices this morning; it seems any impedance to the global oil glut is good for market prices.
High-end retailer Tiffany & Co. (TIF) reported earnings before the bell today, posting a bottom-line beat on slightly weaker revenues. Year over year, both earnings and sales for Tiffany are down, indicating a tightening of high-end consumers making purchases. Again, this is odd considering low oil prices, although for wealthy consumers this is much less of an issue. Adobe (ADBE) posted earnings after the bell Thursday, and its Creative Cloud service gained more than 15 percent quarter over quarter, leading to earnings beat and 5 percent increase in shares.