Current Futures: Dow +5.00, S&P +5.40, NASDAQ +8.75
European equity markets opened higher, following the positive close in the Asian markets and the positive U.S. futures. However, the Japanese Nikkei and the U.K. Ftse remained closed this morning, celebrating two national Holidays.
The European carmaker Fiat, which recently bought (to some extent) Chrysler, is paving the way to become the second biggest auto group in the world by acquiring the General Motors European division. The newly formed group will sell as many as 7 million cars per year, while its revenue will be higher than $100 billion per year.
“Since GM may be heading towards bankruptcy, Fiat should not see too much resistance from the U.S. carmaker to buy the European side of businesses. However, since much of GM Europe’s work-force is concentrated in Germany, Fiat may see some political opposition there, since it will create a viable competitor for the German auto-makers, such as VW” TheLFB-Forex.com Trade Team said.
In other news, the Chrysler bankruptcy seems to have paved the way for GM as well. General Motors is seeking to reach an agreement with its bondholders and, at the same time, with the unions, something Chrysler failed to do. GM has to agree with both sides by June 1. Until now, the bondholders have requested a 58% ownership in exchange for the $27 billion in unsecured loans, while GM has offered a 10% stake for bondholders, and a 39% stake plus $10 billion in cash for the unions. Currently, GM bonds are trading close to junk status.
Overnight, the Japanese Nikkei and the U.K. Ftse were closed for business. The Australian S&P/Asx gained 113.40 points (3.01%) to 3,883.00. The German Dax advanced 51.50 points (1.08%) to 4,820.94
Crude oil for May delivery was recently trading at $53.20 per barrel, down $0.10.
Gold for May delivery was recently trading higher by $6.10 to $894.30.