U.S. Stocks, High-Yield Bonds, and Treasuries modestly increased last week.
There was some volatility during the week sparked by concerns about Deutsche Bank's (DB) capital positioning. However, by the close on Friday afternoon, DB's CEO assured of the bank's health and the Justice Department was reportedly near a much lower settlement with DB than initially expected. The S&P 500 finished up for the week to 2,168 and DB closed up 3%.
US Economic data was mixed. New Home Sales gave up ground in August, but topped expectations. Consumer Confidence swung higher to 104.1 versus the consensus of 98.8. Durable Goods was flat with a strong gain for defense capital goods. GDP stood at an annualized rate of +1.4% after a boost from nonresidential fixed investment in the second-quarter reading. Inflation showed some life with PCE price index up 0.1%, however, August was a soft month for the consumer as income rose only 0.2% and spending was unchanged. Lastly, Chicago PMI rose 3.7 points to 54.2, easily beating the consensus estimate.
Merger talks between CBS and Viacom boosted each of its respective stocks. Analysts are positive about the possibility of the deal because they believe CBS could better capitalize on Viacom's assets which include TV channels Nickelodeon and MTV, and the movie studio Paramount. Qualcomm (QCOM) made M&A news as well after talks of it acquiring NXP Semiconductors (NXPI) arose on Thursday. This deal can benefit QCOM because it would diversify its revenue stream away from handsets and more towards automobiles.