#PreMarket Primer for December 30: Blackstone Invests In Crocs, Google & Apple Enter Auto Industry
With the Dow Jones Industrial Average on its way to a 26 percent gain this year, many investors are wondering if the market is beginning to overheat.
However, bargain shares with relatively low valuations have been posting larger than average gains, which some take as a sign of the market's health. Following the Federal Reserve's decision to cut back on its stimulus spending, interest rates are on the rise and investors are taking more risks.
Stocks with relatively low P/E ratios have been driving the market's current rally and giving investors reason to remain optimistic about 2014.
In other news around the markets:
- Google and Apple are poised to begin 2014 battling for the top spot in a new area: the automobile industry. The two technology giants are lining up allies to integrate their software technology and develop in-car entertainment and information systems. At next week's Consumer Electronics Show, Google and German auto partner Audi AG plan to unveil their latest collaboration, a system that will allow drivers to access services available on Android smartphones.
- An audit released on Monday showed that China's local government had racked up $2.95 trillion by the end of June. The report claimed that local debt remained within controllable limits, although the nation's communist party has put together a group which will oversee reforms to government spending in order to keep the nation's economy healthy.
- Blackstone Group will make a $200 million investment in the shoe company Crocs Inc. The investment will give Blackstone a 13 percent stake in the company, while Crocs plans to use the cash for a $350 million stock repurchase expected in the first quarter.
- On the last day of trading in 2013, Japanese shares posted their highest closing level in six years, ending an impressive yearly performance that took the Japanese Nikkei Stock Average up 57 percent. The nation's market has been helped by a weak yen coupled with Prime Minister Shinzo Abe's expected economic policies.
Asian markets were mostly higher, the Japanese NIKKE was up 0.69 percent and the South Korean KOSPI gained 0.45 percent. Australia's ASX 200 was up 0.61 percent and Indonesia's JSX composite gained 1.45 percent.
European markets were moderately lower, the UK's FTSE lost 0.11 percent and the eurozone's STOXX 600 was down 0.06 percent. The Spanish IBEX was down 0.15 percent and the German DAX lost 0.12 percent.
Energy futures were slightly lower, Brent futures lost 0.02 percent and WTI futures were down 0.08 percent. Gold fell 0.99 percent and silver was down 2.04 percent. Industrial metals were higher with aluminum posting the largest gains, up 2.96 percent.
Currency markets were quiet, the euro gained 0.17 percent against the dollar and the pound to dollar ratio was flat. The dollar gained 0.03 percent against the yen and lost 0.12 percent against the Australian dollar.
Stocks moving in the Premarket included:
- Carnival Corp (NYSE: CCL) gained 0.90 percent in premarket trade after rising 2.68 percent over the past five days.
- The Coca-Cola Co (NYSE: KO) rose 0.37 percent in premarket trade after gaining 1.55 percent over the past week
- Perrigo Company PLC (NYSE: PRGO) fell 0.50 percent in premarket trade after slipping 0.03 percent on Friday
- Citigroup Inc. (NYSE: C) fell 0.48 percent in premarket trade after losing 0.17 percent on Friday
- General Electric Co (NYSE: GE) lost 0.43 percent in premarket trade after gaining 1.72 percent over the past five days.
No notable earnings releases expected on Monday.
Notable economic releases expected on Monday include US pending home sales, Italian business confidence and Spanish retail sales.
For a recap of Friday's market action, click here.
Tune into Benzinga’s pre-market info show with Dennis Dick and Joel Elconin here.
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