Financial and Economic Brief - December 19, 2017by © Liberty Publishing, Inc.
Industrial Production Rises
U.S. industrial production rose 0.2% in November due to a rebound in extracting oil and natural gas after a stoppage during hurricane season. Mining activity grew by 2% last month, while manufacturing activity rose 0.2%. Production of machinery and primary metals contributed to gains in the factory sector as well. During the past 12 months, total industrial production has increased 3.4%. Along with greater mining activity, factories are showing signs of strength.
Campbell Acquires Snyder’s
Campbell Soups is set to acquire Snyder’s-Lance in a $4.9 billion deal. The deal will almost double Campbell Soup's baked-snacks revenue. Campbell will now get 46% of its revenue from snacks, up from 31% before the deal. “The acquisition of Snyder’s-Lance will accelerate Campbell’s strategy and is in line with our Purpose, ‘real food that matters for life’s moments,’” Campbell CEO Denise Morrison said. It is not clear how much overlap in operations the companies have. Campbell said it would pursue “synergies” to increase its profitability.
U.S. Stock Indexes Hit Record Highs
The major U.S. stock indexes hit record highs on Monday, as the tax bill looked set to be passed into law with its $11 billion in corporate deal making. The tax bill, aims to lower corporate taxes to 21% from 35%. The benchmark S&P 500 has gained about 20% so far in 2017, set for its best year since 2013, as investors bet that lower taxes could raise corporate profits and trigger share buybacks and higher dividend payouts. “People are a bit wary about how long the rally will last, but earnings continue to grow, (the) tax package should help and the economy is doing well,” Robert Pavlik, Chief Investment Strategist at SlateStone Wealth said.