Wednesday Morning Cheat Sheet: 3 Stories Moving the Markets
1) Avis Budget Group (NYSE:CAR) will buy Zipcar (NASDAQ:ZIP) for about $500 million, or $12.25 per share, a 49 percent premium on Monday’s closing price. Zipcar pioneered car-sharing services in the United States, but has faced increased competition from traditional car-rental companies who are trying to capitalize on the market. Car-sharing has become more and more popular as consumers try to avoid buying cars during a sluggish economy.
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That being said, Polk is predicting new vehicle registrations in the U.S. to hit 15.3 million for 2013, following strong sales figures of about 14.4 million in 2012. Manufacturers release their U.S. sales data on Thursday. Shares of Ford Motor (NYSE:F) were up over 2 percent in the pre-market.
2) The ISM Manufacturing Index and U.S. Construction Spending report are expected at 10:00 a.m. November’s PMI was 49.5 percent, reflecting a net contraction in the industry after a drop of 2.2 percentage points from October’s reading 51.7 percent. An increase in the PMI, particularly past 50, would help set a positive tone for the markets in January. Another drop could signal a slow start to the year.
On that note, euro-zone PMI slipped 0.1 percentage points to 46.1 in December.
3) On Tuesday, lawmakers finally reached a deal to avoid the worst of the fiscal cliff, which weighed heavily on markets over the past few months. Among other measures, the Bush Tax Cuts will only expire for single persons earning more than $400,000 per year, or married couples earning more than $450,000 per year. Capital gains will rise from 15 percent to 20 percent for single persons making up to $400,000 per year and married couples making $450,000.