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International Market Update
- European stocks closed lower Tuesday as investors reacted to developments in oil and bond markets. The pan-European Stoxx 600 ended the day down 1%, with technology stocks leading the losses with a 2.2% drop, while most sectors and major bourses slipped into negative territory. Oil and gas stocks were the standout gainers, rising 1.1% on a surge in oil prices amid rising tensions in the Middle East. At the top of the European blue-chip index, French video game publisher Ubisoft climbed 11.9% on news that Microsoft has agreed to acquire Activision Blizzard for nearly $69 billion.
- The major U.S. averages fell sharply Tuesday after Treasury bond yields rose to a new record high and Goldman Sachs reported disappointing earnings. Goldman Sachs operating expenses rose 23% due to higher salaries for Wall Street employees. Interest rates rose along the yield curve, with the benchmark 10-year note hitting 1.87%, the highest level since January 2020. At the start of 2022, the 10-year yield was 1.5%. Technology stocks slipped Tuesday, continuing their downward trend in 2022 in the face of rising interest rates.
- Asia-Pacific markets traded mixed this morning following the sell-off on Wall Street overnight. In Australia, the ASX 200 slipped 0.48% as most sectors traded lower. The heavily weighted financials subindex fell 0.7% as the country’s major banking names sold off. Shares of Japanese conglomerate Sony fell 9.1% after Microsoft said Tuesday it will buy video game publisher Activision Blizzard.
In International news
Microsoft to buy Activision for $68.7 billion in cash
Microsoft announced Tuesday that it will buy video game giant Activision Blizzard for $68.7 billion in cash. The price means Microsoft will pay $95 per share for Activision. Activision’s stock ended the day up more than 25%, closing Tuesday at $82.31 per share. Shares of Microsoft closed down more than 2%. This would be Microsoft’s largest acquisition to date, followed by its acquisition of LinkedIn in 2016 for $26.2 billion. Activision, known for popular games such as Call of Duty and Tony Hawk’s Pro Skater, has been embroiled in controversy in recent months after reports of sexual misconduct and harassment among company executives. On Monday, Activision said it had fired dozens of executives following an investigation.
Goldman shares fall 7% after profit drops on rising costs
Goldman Sachs on Tuesday reported fourth-quarter profit that fell short of analysts’ expectations as the bank’s operating costs rose 23% due to higher salaries for Wall Street employees and higher litigation provisions. Quarterly profit fell 13% from a year earlier to $3.94 billion, or $10.81 a share, below the $11.76 estimate of analysts surveyed by Refinitiv. The bank’s shares fell 7% after earlier dropping more than 8%. Still, companywide revenue for the quarter rose 8% from a year earlier to $12.64 billion, more than $500 million above the consensus estimate, driven by gains in investment banking and wealth management.