European markets are trading higher this morning, despite having a very volatile week last week. There is no doubt that the DAX IIndex and the FTSE 100 were able to record their highs last week, but the sentiment remained on the seesaw on the back of the mixed economic data released last week. We do know that the economy in the euro region has started facing serious challenges as per the GDP report and this will remain the main headwind for the bull investors. The CAC 40 slipped sharply lower while the FTSE MIB stayed near the 2 month low and if the equity markets does not pick up its momentum together in the upward direction, we may experience the bond yields go even lower for these countries as investors may prefer to invest in bonds rather than in the equity market.
Back in the UK, the main focus will remain on the pharmaceutical sector and on the bank sector, especially after the stocks such as Astrazeneca Plc (NYSE:AZN) and Deutsche Bank (NYSE:DB) are back in the spotlight. Let’s talk about the AstraZeneca first, who has rejected the Pfizer Inc's (NYSE:PFE) new offer once again, which is a good decision from the shareholder, because Pfizer is certainly undervaluing the firm and we do not think they are offering what the company really worth. Moreover, there is strong possibility that after the merger the company will spin off some of the business in AstraZeneca and sell them off separately. What we do need is a decent offer from Pfizer, which does not undervalue the performance and number of new drugs in the pipeline.
The Deutsche Bank has announced that is going to raise more capital ahead of the stress test. Obviously, the bank wants to make its balance sheet more stronger and with Qatari investment coming on board as a major shareholder, the bank’s position could become much stronger as compared to its peers.
Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.