The Lexington Group - US Market Report - 29.07.2013

Online, July 30, 2013 (Newswire.com) - In the United States, employment figures have improved, but GDP is down. We believe, the future oriented employment numbers are a more telling sign than GDP. More workers, results in more jobs becoming available, which results in more money in the hands of consumers, and more money that will be spent. While GDP is calculated from previous economic performance, we believe these weak numbers hide the true strength of the US economy. The divergence between job creation and GDP will not last much longer. Our analysts expect growth to pick up during the second half of 2013, as the effects of higher taxes dissipates and the global economy improves.

Futures are down slightly on all three major indices; the Dow Jones Industrial Average, Nasdaq 100, and S&P 500 all dropped nearly 0.2%. Drug manufacturer Elan Corp. jumped over 7% as news breaks of an acquisition by Perrigo, who have stated they will use both cash and stocks to purchase the Irish company. Perrigo will purchase the company at $16.50, which represents a 10.5% premium of Elan´s closing share price on Friday. We believe that Perrigo is buying the Dublin-based firm to take advantages of the low Irish corporate tax rate of 12.5%, which should reduce its operating costs by $150 million a year.

We expect Omnicon Group Inc. shares to rise, on the back of a merger announcement with the French Publicis Groupe SA. This will be the largest advertising industry deal in history. The merger will create a new entity called Publicis Omnicon Group and will have $35.1 billion in market capital overtaking WPP as the largest advertising firm in the world. Based on last year's figures, the new firm would have combined revenue of $22 billion passing the $15 billion posted last year by WPP.