November 4, 2024
Siemens' planned $10.6 billion acquisition of Altair Engineering was the main M&A story. The deal is expected to close in the second half of 2025 and would strengthen Siemens' industrial software position, especially in product lifecycle management. Altair adds design, engineering, simulation, and AI-driven development capabilities to Siemens' Xcelerator platform.
The strategic case is scale in software. The deal would move Siemens from fourth to second in PLM, behind Ansys, in a market estimated to grow about 10% per year. Siemens expects the acquisition to add $500 million of mid-term revenue and more than $1 billion annually over the long term. The 18.7% premium drew some cost-efficiency questions, so investors will watch whether earnings per share improves within two years.
Big Tech showed why AI spending is becoming a margin debate. Meta and Microsoft beat expectations but emphasized deeper AI infrastructure spending, and the Nasdaq led a U.S. stock selloff. Alphabet gave a more constructive read, reporting a 34% profit increase supported by cloud demand tied to AI models. Apple reported 6% iPhone revenue growth, but the gradual rollout of Apple Intelligence made the AI device story less immediate.
The U.S. macro backdrop was still solid. Third-quarter GDP grew 2.8% year over year, below the prior quarter's 3.0% and the 3.1% expected, but above the Fed's 1.8% long-term growth estimate. Consumer spending rose at a 3.7% rate, while PCE inflation increased 0.2% month over month and 2.1% over 12 months. Core PCE stayed stickier at 2.7%, and the savings rate fell to 4.6%.
Consumers looked more confident. The Conference Board index rose to 108.7 in October from 99.2, and recession concerns fell to the lowest level since July 2022. The University of Michigan sentiment index edged up to 70.5.
Global rate stories were mixed. Russia raised rates 200 basis points to 21% after inflation reached 9.8%. Australia inflation fell to 2.8%, but core inflation stayed at 3.5%. The yen weakened as Japan balanced political uncertainty with gradual tightening. Bitcoin traded near $72,333 after briefly climbing above $73,000, supported by ETF demand, election anticipation, and short liquidations.