Billion Dollar Deals Hike US Markets To Record Highs

The price of US stocks reached record levels after several big companies moved on mergers and acquisitions.

Drugs giant Pfizer may have lost out on a hostile bid to take over British rival Astro Zeneca, but that still left some big players hanging in the wind.

AT&T made a £28.8 billion bid for DirecTV and Marathon Oil snapped up the Hess Corporation retail business for £14.1 billion.

Meanwhile the Dow Jones Industrial Average hit 16,606 and Standard & Poor’s reached 1,900.

Industry experts are warning low volatility in the markets could have a downside.

“Caution is recommended for investors holding to many stocks in their portfolios,” said BlackRock’s global chief investment strategist Russ Koesterich.

“Outside shocks like key elections in Europe and Ukraine could rock the boat and cause a slide in prices.”

Emerging market shocks

Emerging market investors face a number of rising political issues.

The Russia/Ukraine crisis is straining relationships between Europe and Moscow – and the price of gas could be affected. Russia’s Gazprom’s biggest outlet is the European Union and stemming the flow as a sanction by either side could shock a tense economic recovery.

Thailand’s military coup leaves some unanswered questions – but as the country has a coup on average every seven years, investors seem unflustered.

Koesterich points out that despite the problems, emerging markets outpaced developed markets by 4% in growth during May 2014.

Britain can expect above average economic growth for the coming months, says new research from the Confederation of British Industry (CBI).

Growth measured by the organisation hit record levels in May 2014 – and the peaked at the highest figure since data keeping started in 2003.

Strong UK growth

The CBI reports strong growth in retail, business/professional and consumer services, while manufacturing is expanding at a steady pace.

CBI Deputy Director-General Katja Hall said: “The economy is doing well with increasing business and consumer confidence.

“Encouragingly, the growth is based over a number of sectors thanks to business investment over the past year.”

Legal & General’s £1.3 billion UK Property Trust has switched into a Property Authorised Investment Fund (PAIF) structure, giving an improved tax-efficient income for many investors.

PAIFs are property funds tracking rental income, interest and dividend income.

Investors with holdings in a PAIF through a pension or ISA wrapper receive rents and interest payments gross.

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