Financial and Economic Brief - October 24, 2017by © Liberty Publishing, Inc.
“Pick Up” in Business for 4th Quarter?
According to a survey of business analysts, even though business wasn't great during Q3 2017, things “should pick up again” in Q4. The sales forecast comes amid signs of strength in the wider U.S. economy, which has enhanced that outlook as well. Despite concerns that a series of back-to-back hurricanes would diminish growth, the survey found little evidence of that. The weakness in Q3 results is expected to show up in the latest wave of corporate earnings reports now underway. But profit gains are expected to jump back into double-digit territory in the Q4 2017 and continue in 2018.
Hartford to Acquire Aetna’s Life and Disability
The Hartford Financial Services Group has agreed to acquire Aetna's U.S. group life and disability business for $1.45 billion. The acquisition is expected to make The Hartford (HIG) the second largest group life and disability insurer. Aetna said options for the deal include making internal investments to enhance customer services, buying back shares, and paying down debt. The deal is expected to close in early November 2017. Hartford Chairman and CEO Christopher Swift said that the transaction provides an opportunity for the company “to become the second-largest group life and disability insurer, an important business for The Hartford with a stable risk profile, attractive returns, and strong long-term growth prospects.”
Wall Street at Record Levels
Wall Street indexes hovered at record levels on Monday as investors aplauded the continuation of “Abenomics” following Japanese Prime Minister Shinzo Abe’s win in the polls. The market has had a solid run, with the Dow breaking the 23,000 milestone last week on strong earnings. Corporate earnings have got off to a strong start, with nearly three quarter of the 88 S&P companies beating expectations. “Investors are being cheered on by the global markets after the Japanese election,” said Peter Cardillo, Chief Market Economist at First Standard Financial. “The strength continues based on the prospect of fiscal reform and good earnings.”