Will They or Won't They?

This was the question that permeated the markets this week, not just in Europe but all over the globe, will we soon see the back of quantitative easing programs? European Central Bank President Mario Draghi gave an upbeat speech on Tuesday at the 2017 ECB Forum on Central Banking in Sintra, Portugal, sending the euro and bond yields up.

Draghi's comment that "deflationary forces have been replaced by inflationary ones" was taken as a sign that the asset purchase program may soon come to an end. However, other senior central bankers warned that investors had misjudged the comments and that they are further away than investors think from ending the QE program. Bank of England Governor Mark Carney and Federal Reserve Head Janet Yellen also signalled the prospect of tightening policy.

Key Number: $1.30. The pound surged above $1.30 on Wednesday, hitting a two-week high after Bank of England Governor Mark Carney hinted that some of the Bank's stimulus may be pared back if the British economy were to improve.

What to Read:

https://www.thestreet.com/story/14203385/1/german-inflation-accelerates-in-june-as-global-central-banks-signal-rate-hikes.html

https://www.thestreet.com/story/14201450/1/pound-surges-after-bank-of-england-governor-hints-at-stimulus-removal.html

Google Gets Whacked With Massive Fine

Alphabet Inc. (GOOGL - Get Report) was hit was a massive fine by the European Commission, in fact it was the biggest ever fine levied by the antitrust regulator. Alphabet's Google division has been fined a record €2.42 billion ($2.7 billion) by the European Commission for abusing its dominance as a search engine by giving itself an advantage in comparison shopping services.

"What Google has done is illegal under EU antitrust rules," said Competition Commissioner Margrethe Vestager. "It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation." Google now has 90 days to end its conduct or face payments of up to 5% of the average daily global revenue of its parent company, Alphabet Inc., the Commission said.

Key Number: $1.21 billion. The fine is the largest in EU history, topping the €1.06 billion penalty levied on Intel Corp. in 2009.

What to Read:

https://www.thestreet.com/story/14199312/1/google-s-landmark-antitrust-fine-is-latest-chapter-in-eu-s-war-with-silicon-valley.html

https://www.thestreet.com/story/14201466/1/google-s-2-7-billion-fine-from-the-eu-is-small-potatoes-analysts-say.html

Nestle Becomes An Activist Target

Dan Loeb's Third Point has another target in its sights, this time in the shape of Swiss food giant Nestle SA (NSRGY) . The activist hedge fund has built up a 1.3% stake in the world's biggest food company, valued at more than $3.5 billion, putting it among the company's top 10 investors and making it the biggest ever initial bet for Third Point.

"It is rare to find a business of Nestle's quality with so many avenues for improvement," Third Point said in a Sunday letter to investors. But that's seemingly where the complements ended, with Third Point adding that shareholder returns have lagged those of its U.S. and European consumer staple peers and that it has failed to address changes in tastes and shopping habits. Third Point is calling for Nestle to shed assets and increase share buybacks.

Key Number: 23%. Nestle owns a 23% stake in French cosmetics company L'Oreal (LRLCY) , which Third Point is calling for them to sell. Nestle however has said the stake was a significant asset and any change would have to be done very carefully.

What to Read:

https://www.thestreet.com/story/14200619/1/nestle-set-to-test-record-highs-after-21-billion-share-buyback-plan.html

https://www.thestreet.com/story/14195122/1/l-oreal-hits-record-high-as-third-point-presses-for-nestle-stake-sale.html

https://www.thestreet.com/story/14195095/1/nestle-in-focus-after-third-point-builds-stake-in-latest-u-s-activist-move-in-europe.html

Adidas Got to Amazon Before Nike

Adidas AG (ADDYY) shares surged Friday trading just hours after its biggest competitor announced a lucrative partnership to sell sports apparel with online giant Amazon.com Inc. (AMZN - Get Report) Nike Inc. (NKE - Get Report) confirmed late Thursday that it has teamed up with Amazon to sell certain products on the e-commerce conglomerate's site. The move appears to be the latest attempt by Nike to arrest its declining domestic market share, a portion of which has gone to rival Adidas, which has an existing partnership with Amazon in the US, the company told TheStreet, and a unique landing page on the site. Adidas has been outperforming Nike of late. The German group has been throwing its weight behind digital and hopes to quadruple its online sales to $4 billion by 2020.

Key Number: 8%. Nike shares were 8.7% higher in Friday morning trading at $57.81 each.

What to Read:

https://www.thestreet.com/story/14205252/1/nike-just-revealed-that-its-most-important-brand-is-raking-in-billions-of-dollars.html

https://www.thestreet.com/story/14205625/1/adidas-tops-european-gainers-nike-surges-in-pre-market-trading-after-amazon-deal-boosts-sentiment.html

The Queen Gets a Raise

HRH Queen Elizabeth II is getting a raise and her central London house is getting a makeover. The Queen will see her annual salary increase 8% to £82 million ($105 million), with much of the money going towards a refurbishment of Buckingham palace. The increase comes from public funds, after the Crown Estate profits rose by £24 million. Sir Alan Reid, Keeper of the Privy Purse, said the Queen represented "excellent value for money." He said the bottom line for the Sovereign Grant last year was about 65 pence per person in the U.K. a year, less than a price of a stamp. The Sovereign Grant, which is paid two years in arrears, is money given to the Queen by the Treasury.

Key Number: $472 million. Buckingham Palace needs an almost half a billion dollar makeover.

What to Read:

https://www.thestreet.com/story/14188699/1/trump-s-u-k-visit-looks-to-be-delayed-after-queen-fails-to-mention-it-in-opening-of-parliament.html

https://www.thestreet.com/video/14118304/prince-philip-to-stand-down-from-royal-duties-in-autumn.html