Good morning. Happy Friday.
The Asian/Pacific markets did great. South Korea, India, Taiwan, Australia, Malaysia, Indonesia, Thailand and the Philippines led. Europe, Africa and the Middle East currently lean to the upside. Denmark, Poland, France, Turkey and Switzerland are up; Finland, Norway and Portugal are down. Futures in the States point towards a slight positive open for the cash market.
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The dollar is up. Oil and copper are down small amounts. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Low bar
Banks will kick off the Q2 earnings season today, leading off with JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC). For the most part, analyst earnings revisions don’t paint a pretty picture. Only one of the Big 6 U.S. Banks saw its Q1 earnings consensus estimate rise over the past six months. Analysts have cut their Q2 earnings estimates the most for Goldman (GS), which is expected to post its worst quarterly earnings in years, and Morgan Stanley (MS).
Rate repercussions: Part of the reason for the lower expectations for bank earnings is that deposit costs are continuing to rise as the Federal Reserve’s interest rate-hiking path continues, albeit at a slower pace. Jefferies’ Ken Usdin expects deposit mix shifts and elevated competition to weigh on funding costs, while reserves for bad credit will likely increase. “Expect Q2 to be similar to Q1 with deposit betas and non-interest bearing deposit outflows driving stock performance,” said Morgan Stanley analyst Betsy Graseck.
Credit focus: The one bright spot is credit, excluding subprime consumer. “It’s a double-edged sword because the good news is credit is good, but the bad news is that this could mean rates need to go even higher, which will likely put more pressure on deposit betas and non-interest bearing) outflow,” said Graseck. CFRA’s Kenneth Leon sees rising credit risks for personal loans and credit card balances, both Q/Q and Y/Y.
SA commentary: SA analyst Logan Kane said JPMorgan looks like the best bet at this time, having likely emerged as the big winner from the spring bank panic. Juxtaposed Ideas remains bullish on Citigroup, given its well-diversified portfolio and sustained efforts in improving operating efficiency. As for Wells Fargo, Labutes IR said its operating performance is not expected to improve significantly in Q2 due to weak fundamentals and other issues. (12 comments)
Not a security
XRP (XRP-USD) soared over 70% after a judge ruled that the cryptocurrency isn’t a security in terms of sales to the general public. However, it denied Ripple Labs’ motion for summary judgment regarding institutional sales and will issue a separate order for a trial date in due course. After the ruling, Coinbase (COIN) relisted XRP. The token saw its market cap swell 64% over the last day, triggering a broader rally in the crypto market, with bitcoin (BTC-USD) up 3%. In 2020, the Securities and Exchange Commission sued Ripple for allegedly raising more than $1.3B through an unregistered digital asset securities offering. (58 comments)
More support
China’s central bank has signaled that more support for the economy could be on the way, while its financial regulators are looking to woo global investors at a time when its economy has been hit by persisting weakness and geopolitical tensions. Officials at the People’s Bank of China hinted at adjustments to the reserve requirement ratio and easing of property controls. In separate news, China’s financial regulators invited some of the world’s top investors to a rare symposium next week as they try to shore up foreign investor confidence. “Some markets are bracing for the sort of bazooka stimulus response that we have seen in the recent past,” ING economists said. “But we are not at all sure we will see that this time.”
Free vaccines
The CDC has announced a program to provide free COVID-19 shots for those without insurance coverage, following an end to government-led procurements. The program, which will be launched in the fall after COVID vaccines move onto the commercial market, will end in December 2024. The move comes in the wake of Pfizer (PFE), BioNTech (BNTX), Moderna (MRNA), and Novavax (NVAX) updating their COVID shots to target currently circulating variants. To note, the emergency use authorization for Johnson & Johnson’s (JNJ) COVID vaccine was revoked by the FDA at the request of the company, given no additional demand in the U.S. (55 comments)
Today’s Economic Calendar
8:30 Import/Export Prices
10:00 Consumer Sentiment
1:00 PM Baker Hughes Rig Count
What else is happening…
Microsoft (MSFT), Activision (ATVI) mull U.K. cloud-gaming rights sale.
Hollywood actors go on strike in historic entertainment shutdown.
Shell (SHEL) explores selling stake in renewable power business.
Bob Iger says Disney (DIS) could move away from TV networks.
Meta Platforms (META) plans launch of commercial AI model.
Nikola (NKLA) soars after disclosing hydrogen truck sale.
Nokia (NOK) cuts guidance as macro woes weigh on demand.
Amazon (AMZN) rallies on record Prime Day, peers trade higher.
Airline stocks fly high as Delta Air Lines (DAL) boosts FY guidance.
Workers building Taiwan Semi’s (TSM) Arizona plant hit with pay cut.
WHO arm labels aspartame as ‘possible carcinogen’, but FDA disagrees.
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Good morning. Happy Thursday.
The Asian/Pacific markets did great. Japan, China, Hong Kong, Australia, Singapore and the Philippines led. Europe, Africa and the Middle East are currently posting solid gains. Denmark, France, Germany, Russia, South Africa, Finland, Hungary, the Netherlands, Italy and Portugal are leading. Futures in the States point towards a positive open for the cash market.
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The dollar is down. Oil is unchanged; copper is up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Turning point?
Economists and analysts are clearly divided about the latest inflation report card, but markets seem to think otherwise. The Consumer Price Index dropped to 3% Y/Y in June, down from a 4% headline rate in May, while core inflation – which excludes volatile food and energy prices – only grew by 0.2% M/M, after climbing by 0.4% or more for the past six months. Following the data release, the S&P 500 (SP500) and Nasdaq (COMP.IND) ended Wednesday’s session at their highest levels in over a year as optimism builds about a soft landing for the U.S. economy.
The good: “The roots of a further decline in the rate of inflation are well established and should support a continuation of the bull market in stocks,” wrote Investing Group Leader Lawrence Fuller. “While the core rate remains well above target, the roots of its decline are staring us in the face. The inflation hawks will do their best to find components of the price index that are not falling in line with the overall rate, but they will come up empty-handed.” Inflation Keeps Declining And Stocks Keep Climbing (19 comments)
The bad: “Though positive, the CPI report isn’t expected to change the outcome at the Federal Reserve’s July 25-26 meeting,” said SA analyst Justin Purohit. “By moving forward with continued increases, the Fed risks overshooting key components whose deceleration is expected to increase in the back half of the year. With these considerations in mind, I believe the Fed is on track for a policy mistake.” June CPI Report: What It Means For Consumers And Markets (11 comments)
The ugly: “On the surface, the easy part of the inflation cycle appears to have been completed. The core measure of inflation is undoubtedly better than where they were, but the Fed isn’t likely to take much comfort in one month of better data,” added Mott Capital Management. “Core goods and services are still relatively high, even after modest improvement. It will put into question the fantasy the stock market has had now for some time that inflation is just going to vanish and melt away… and based on the data, the hard part for the markets is likely only beginning.” The Inflation Battle Is Far From Over, Now The Hard Part Begins (24 comments)
Double strike
Hollywood is gearing up for the first double strike of writers and actors since 1960 after contract negotiations between a union representing 160,000 actors and major studios failed. Actors are now set to join writers, who have already been on the picket lines for more than two months. The SAG-AFTRA voted to recommend a strike and its national board will make the final decision today. “After more than four weeks of bargaining, the Alliance of Motion Picture and Television Producers remains unwilling to offer a fair deal,” said SAG-AFTRA. AMPTP represents major studios and streamers including Apple (AAPL), Disney (DIS) and Netflix (NFLX). (11 comments)
More time
It’s not easy for Bob Iger to retire. He’ll remain at the helm of Disney (DIS) for two years longer than planned after the company extended the CEO’s employment contract to December 2026 (Loop Capital called it). Iger has delayed many succession decisions in the past, but ultimately extended his tenure, and took investors by surprise when he returned to Disney last year to replace Bob Chapek. Current Chairman Mark Parker said the new contract extension would give Disney “ample time to position a new CEO for long-term success,” with the House of Mouse continuing to evaluate internal and external candidates for the top spot. (111 comments)
New rules
The Securities and Exchange Commission has adopted measures to reduce the risk of investor runs on money market funds, a $5.5T industry, during times of market stress. The SEC had passed rules to prevent such runs after financial markets spiraled in 2008 and 2020, but these efforts failed to stop investors fleeing these funds. The latest measures increase minimum liquidity requirements to provide a bigger buffer in the event of rapid redemptions, among other changes. Trade group SIFMA is cautious about the changes, given additional costs on shareholders, but is relieved that the SEC didn’t implement swing pricing. (2 comments)
Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 Producer Price Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $18B, 30-Year Bond Auction
2:00 PM Treasury Statement
4:30 PM Fed Balance Sheet
6:45 PM Fed’s Waller Speaks on Economic and Policy Outlook
What else is happening…
Microsoft (MSFT)-Activision (ATVI): FTC appeals ruling on $69B deal.
Broadcom’s (AVGO) takeover of VMware (VMW) gets conditional EU nod.
Musk unveils xAI to ‘understand reality’ and ‘true nature of universe.’
Microsoft (MSFT) says Chinese hackers accessed 25 organizations.
Deeper Dive: The music industry is growing louder with new ETF.
Viasat (VSAT) falls 10% after flagging deployment issue in satellite.
U.N. chief to Putin: Extend Black Sea grain deal for SWIFT access.
BP (BP), TotalEnergies (TTE) win in €12.6B offshore wind site auction.
BlackRock (BLK), KKR (KKR) near sale of ADNOC oil pipeline stake.
Google (GOOGL) expands access to AI bot Bard, with new image features.
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Good morning. Happy Wednesday.
The Asian/Pacific markets leaned to the upside. Hong Kong, South Korea and the Philippines did well, while Japan and China were weak. Europe, Africa and the Middle East are currently posting big gains. The UK, Poland, France, Germany, Russia, South Africa, Finland, Hungary, the Netherlands, Italy, Israel, Austria and the Czech Republic are up more than 1%. Futures in the States point towards a moderate gap up open for the cash market.
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The dollar is down. Oil and copper are down. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Inflation report card
In the wake of the pandemic, inflation surged. A large swath of Americans had money and nowhere to go, so they bought stuff and manufacturers had a hard time keeping up. First, goods prices rose, then when lockdowns eased, costs of services climbed. Prices even rose at the fastest pace in 40 years, with the Consumer Price Index jumping to a 9.1% Y/Y rate in June 2022 and core CPI (excluding food and energy) hitting a peak of 6.3% that August.
Fast forward: Those dynamics have calmed down and inflation has eased, with CPI coming in at 4.0% Y/Y and core CPI at 5.3% in May 2023. That’s still double the Federal Reserve’s target of 2%, with FOMC officials signaling further rate hikes in an effort to cool the economy, and with it, the trajectory of prices. Traders, too, expect the Fed to raise its policy rate by 25 basis points to 5.25%-5.50% later this month, assigning a 92.4% probability to that outcome, up from an 86.8% probability a week ago, according to the CME’s FedWatch Tool.
Eyes are now on the latest bout of inflation data this morning as the U.S. Labor Department releases its June CPI report at 8:30 AM ET. Economists expect the headline number to only rise by 3.1% Y/Y in June, down from 4.0% in May, and core CPI to increase 5.0%, easing from 5.3% in the prior month. On a month-over-month basis, CPI is expected to rise 0.3% vs. 0.1% in May and core CPI is expected to increase 0.3% vs. 0.4% in the prior month.
SA analyst Christopher Robb sees “a real possibility” that CPI could fall more than the consensus. Used car prices fell 4.2% in June, the biggest monthly drop since early in the pandemic, according to the Manheim Used Vehicle Value Index. He also points to signs that worsening housing affordability could lead to a “double punch of relief to core inflation.” Others, like SA analyst Damir Tokic, expect inflation to resume and think the Fed’s decision to pause rate hikes in May was a mistake.
Fading effect: While economists focus on the CPI, the report’s influence on markets has been subsiding recently, according to SA analyst Mike Zaccardi. “Options traders have priced in about a 0.8% move up or down by Wednesday’s closing bell when analyzing at-the-money straddle price,” he said. “So, fireworks are not expected, but the Fed will surely pay close attention to inflation trends ahead of its July 26 rate decision.” (7 comments)
Big win
Videogame maker Activision Blizzard (ATVI) closed up 10% on Tuesday after a federal court allowed Microsoft (MSFT) to move forward with its $69B acquisition. “The Federal Trade Commission has not shown a likelihood it will prevail on its claim this merger may substantially lessen competition,” wrote Judge Jacqueline Scott Corley. “To the contrary, evidence points to more consumer access to Call of Duty and other Activision content.” SA Investing Group Leader Chris DeMuth called the ruling balanced, though the FTC is leaning toward appealing its loss. Microsoft has also offered to make a small divestiture to address U.K. antitrust concerns as it shoots to get the deal over the finish line. (43 comments)
Suicide risk?
The European Medicines Agency’s investigation into reports of suicidal behavior linked to Novo Nordisk’s (NVO) weight loss and diabetes drugs has been extended to include other GLP-1 receptor agonists. The probe began earlier this month after the Icelandic Medicines Agency flagged reports of suicidal thoughts and self-injury linked to semaglutide and liraglutide, the active ingredients of Novo’s blockbuster drugs Wegovy/Ozempic and Saxenda. The EMA expects to conclude its review in November. Other GLP-1 receptor agonists on the market include Eli Lilly’s (LLY) diabetes therapy Trulicity and Sanofi’s (SNY) Adlyxin. (28 comments)
Deceptive practices
The Consumer Financial Protection Bureau is continuing its crackdown on banks overcharging fees on consumer accounts. Bank of America (BAC) has been ordered to pay more than $100M to customers for allegedly charging “junk fees, withholding credit card rewards, and opening fake accounts.” The Office of the Comptroller of the Currency also alleged that the bank’s “double-dipping” on fees was illegal. Meanwhile, BofA’s Merrill Lynch unit agreed to pay a $6M penalty to settle SEC charges that the firm failed to file Suspicious Activity Reports from 2009 to late 2019, as well as a separate $6M fine to settle charges brought by FINRA. (26 comments)
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Consumer Price Index
9:45 Fed’s Kashkari: “Banking Solvency and Monetary Policy”
10:00 Atlanta Fed’s Business Inflation Expectations
10:30 EIA Petroleum Inventories
1:00 PM Results of $32B, 10-Year Note Auction
2:00 PM Fed’s Beige Book
4:00 PM Fed’s Mester Speech
What else is happening…
Arm (ARMHF) eyes Nvidia (NVDA) as anchor investor in upcoming IPO.
Amazon (AMZN) Prime Day leads to outperformance in the retail sector.
In early talks, Disney (DIS) explores strategic options for India business.
Live-action: Mattel (MAT) stock gets dolled up on Barbie movie hype.
Tower Semiconductor (TSEM) gains with Intel (INTC) CEO in China.
Equitrans (ETRN) weighs options amid blocked Mountain Valley Pipeline.
Boeing (BA) delivered 60 planes in June, H1 output rose 23%.
Big setback as Blue Origin (BORGN) rocket engine explodes during test.
Shutterstock (SSTK) rockets on expanded partnership with OpenAI.
Coty (COTY) in spotlight as Kim Kardashian wants SKKN stake back.
Canada proposes changes on mortgages in negative amortization.
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Good morning. Happy Tuesday.
The Asian/Pacific markets did very well. China, South Korea, Taiwan, Australia and Indonesia led. Europe, Africa and the Middle East are mostly up. France, Turkey, Germany, Hungary, Greece, South Africa, Italy, Israel and Saudi Arabia are leading. Futures in the States point towards a positive open for the cash market.
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The dollar is down. Oil is up; copper is down. Gold is up; silver is down. Bonds are up.
Stories/News from Seeking Alpha…
Too big to benchmark
They were once called the FAANGs, and then MAMAA stocks, before evolving into the Magnificent Seven. But whatever Mad Money’s Jim Cramer wants to call it, the group’s outsized influence is starting to cause some trouble for market indices. Following a return of the tech trade and a major rally in 2023 helped by the AI craze, some of the financial world’s benchmarks are now upending diversification rules, resulting in profound impacts for countless investing products and the hundreds of billions of dollars that are linked to them.
Snapshot: The Nasdaq 100 (NDX), the go-to index for prominent growth-oriented stocks, has surged nearly 40% YTD, compared to the 15% gain of the S&P 500. The power behind the bull market that resumed in March is being led by the Magnificent Seven and their stellar performance in 2023: Alphabet (GOOGL) +31%, Microsoft (MSFT) +39%, Amazon (AMZN) +48%, Apple (AAPL) +51%, Meta (META) +136%, Tesla (TSLA) +149% and Nvidia (NVDA) +195%. Putting things in perspective, without the big gains of the gunslinging gang, the S&P 500 would be slightly underwater for the year. “Overconcentration” is even present in the Nasdaq 100 (NDX), which revels in these types of heavyweight stocks, forcing the index provider to pull the trigger.
Unlike a reconstitution, where stocks are removed or added, a rebalancing changes the weights of an index and their stock component percentages. The Nasdaq has only conducted a special rebalance twice in the past – in December 1998 and May 2011. The rules state that action will be taken if the aggregate total of all stocks with individual weights above 4.5% in the index exceeds 48% (currently, the “Magnificent Seven” stocks account for 55% of the total weighting of the Nasdaq 100). Apple exceeds $3T market cap as analysts heap praise on tech giant.
What to watch: Rebalancing changes will be announced on July 14 and take effect before the market opens on July 24. Keep an eye on ETFs like the Invesco QQQ Trust (NASDAQ:QQQ), Invesco NASDAQ 100 (NASDAQ:QQQM) and the ProShares UltraPro QQQ ETF (NASDAQ:TQQQ), as well as positioning that could occur beforehand. SA analysts like Jim Sloan also explore if The Leadership Of The Magnificent Seven Makes Sense by comparing value vs. growth dynamics, while UFD Capital urges investors to take the long-term perspective despite bubble fears over artificial intelligence.
Sweden is in
Sweden is one step closer to joining NATO after Turkey backed its bid to become a part of the alliance. President Recep Tayyip Erdogan committed to forward Sweden’s accession protocol to Parliament “as soon as possible” for ratification amid commitments by Stockholm to bolster its anti-terrorism efforts and support Ankara’s bid to join the EU. Following Turkey’s decision, the U.S. is expected to transfer F-16 fighter jets produced by Lockheed Martin (LMT), though the decision will need approval from Congress. Investing Group Leader Leo Nelissen sees the growing momentum of the F-16 program, which has benefited from war-related uncertainties, further contributing to Lockheed’s positive trajectory.
Threads hits 100M
Meta’s (META) Threads is off to a fast start, crossing 100M users less than a week after its launch as it quickly catches up to Twitter’s roughly 240M daily active users. The figure excludes Europe, where Threads has not yet launched due to data regulation concerns. “That’s mostly organic demand and we haven’t even turned on many promotions yet,” said Meta CEO Mark Zuckerberg in a post. Evercore ISI also believes Threads presents a significant revenue opportunity over the next few years, adding that “Twitter’s turbulent execution has opened up an opportunity for a competitor app.” (32 comments)
Capital requirements
Fed Vice Chair for Supervision Michael Barr has laid out a set of proposals to address recent bank failures and to bolster the financial system with stronger capital requirements. His plans include updating standards for risk-based requirements for big lenders and improving bank stress testing. “These changes would increase capital requirements overall, but I want to emphasize that they would principally raise capital requirements for the largest, most complex banks,” said Barr. “I expect to have more to say on these topics in the coming months.” In the Fed’s 2023 stress test, all 23 banks met minimum capital requirements under a hypothetical recession, confirming “that the banking system remains strong and resilient.” (2 comments)
Today’s Economic Calendar
6:00 NFIB Small Business Optimism Index
1:00 PM Results of $40B, 3-Year Note Auction
What else is happening…
WSB survey results: Wait for war’s end for Ukraine NATO membership.
Berkshire (BRK.A) to buy Dominion (D) stake in LNG plant for $3.3B.
Apple (AAPL) supplier Foxconn (OTCPK:HNHPF) exits Indian chip deal.
Rite Aid (RAD) dips as it weighs bankruptcy to address opioid liabilities.
Icahn Enterprises (IEP) jumps after Carl Icahn renegotiates personal loans.
Cava (CAVA) keeps rising; analysts see plenty of space for more growth.
Novo Nordisk (NVO) weight loss drugs under EU scrutiny over suicide risk.
Activision (ATVI) on watch ahead of ruling in Microsoft (MSFT) FTC case.
Cheniere (LNG) avoiding Panama Canal for longer LNG routes to Asia.
NY Times (NYT) closing sports desk to focus on integrating The Athletic.
Novavax (NVAX) jumps after revising COVID vaccine deal with Canada.
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets were mixed. China, Hong Kong and Thailand did well while Japan, Australia and New Zealand were weak. Europe, Africa and the Middle East are mostly up. The UK, France, Turkey, Germany, Russia, Greece, Switzerland, the Netherlands, Italy and Portugal are up; Denmark, South Africa and the Czech Republic are down. Futures in the States point towards a flat open for the cash market.
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The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
NATO support
President Biden will depart for Lithuania on Monday night for the North Atlantic Treaty Organization’s annual summit. The stop in Vilnius is part of a broader solidarity mission this week that seeks to shore up support for Ukraine as its counter-offensive against Russia gets underway. Tensions continue to escalate in the war, with NATO member Poland moving over 1,000 troops to the east of the country on Saturday amid concerns about the presence of Wagner Group fighters in neighboring Belarus.
Quote: “I don’t think there is unanimity in NATO about whether or not to bring Ukraine into the NATO family now, at this moment, in the middle of a war,” President Biden said in an interview with CNN. “NATO is a process that takes some time to meet all the qualifications, from democratization to a whole range of other issues. In the meantime, one of the things I indicated the U.S. would be ready to provide – while the process is going on – is security, weaponry and the capacity for them to defend themselves.”
Biden also commented on his decision to approve cluster munitions for Ukraine, in part due to the fact that the U.S. “was low” on 155mm howitzer shells – after providing more than 1.5M of the artillery rounds to Kyiv. Many nations that have funneled weapons to Ukraine are also finding that their stocks are running low, such as Stinger and Javelin anti-aircraft and anti-tank missiles produced by Raytheon (RTX) and Lockheed Martin (LMT). It could take years for defense contractors to meet the shortfall, especially with less than a quarter of NATO countries meeting their obligations to spend at least 2% of their GDP on defense spending by 2025.
Outlook: Ukrainian President Volodymyr Zelenskyy has been invited to the summit in Vilnius scheduled for Tuesday and Wednesday. Pledges of military and financial support are expected to be announced at – or soon after – the gathering, while a coalition of allies might detail training for Ukrainian pilots in Lockheed-built F-16 aircraft. Another wildcard at the meeting is the full approval of Sweden into the alliance, which may hinge on the supply of upgraded U.S. fighter jets to Turkey and commitments by Stockholm to contain supporters of what Ankara deems terrorist entities. Reversing a historic policy of non-alignment, Finland was the latest member accepted into NATO this past April, bringing the military alliance to 31 members. (3 comments)
Black gold
American crude oil production is on track to set a record this year, keeping energy prices stable and blunting the efforts of Saudi Arabia and other oil exporters to drive them higher. While OPEC and its allies cut production this year, increased output in countries outside of the group is making up for the difference. Half of the new crude is coming from the U.S., where companies including ConocoPhillips (COP) and Devon Energy (DVN) delivered strong Q1 production amid efforts to improve efficiency. Investing Group Leader HFIR believes oil is asymmetrically positioned to the upside as “U.S. oil demand is starting to fire on all cylinders, and U.S. shale oil production is peaking.” (318 comments)
End in sight
Investors are expressing optimism that China’s crackdown on the technology sector is nearing its end after the PBOC imposed fines on Ant Group and Tencent (OTCPK:TCEHY). Ant Group, in which Alibaba (BABA) owns a 33% stake, was slapped with a $985M fine, while Tencent was handed a ~$410M penalty. This frees up Ant Group to potentially explore a public listing again, close to three years after China blocked what would have been the world’s largest IPO. “We believe the fines indicate that the rectification of large fintech platforms has come to an end,” said JPMorgan’s Alex Yao.
M&A delay
New U.S. guidelines proposed for regulators to review mergers and acquisitions have the potential to add months to a deal review. It’s possible that “on the margins,” the proposed rules could potentially curtail M&A,” Kara Kuritz, who previously served as the HSR Act specialist at the DOJ’s antitrust division, told Seeking Alpha. The industry has “already seen a decline due to volatility in the markets with interest rate increases and a Biden administration that has been aggressive in its antitrust efforts, suing in an attempt to block several high profile transactions, including Microsoft’s (MSFT) planned $69B purchase of Activision (ATVI) and Amgen’s (AMGN) $28B purchase of Horizon Therapeutics (HZNP). “Any time the transaction costs of doing a deal increase, that cost increase has a chilling effect,” said Kuritz. (33 comments)
Today’s Economic Calendar
10:00 Fed’s Barr: “Bank Capital”
10:00 Wholesale Inventories (Preliminary)
11:00 Fed’s Daly Speech
12:30 PM Investor Movement Index
3:00 PM Consumer Credit
What else is happening…
Meta (META) Threads crosses 70M users, early success to continue.
Goldman’s top four themes for earnings season (yes, one is AI).
Netflix’s (NFLX) ‘less compelling’ content could hinder growth.
Goldman Sachs sees rays of hope in underperforming health sector.
TPG (TPG) to buy Forcepoint’s govt cybersecurity unit for $2.45B.
SVB (OTCPK:SIVBQ) files lawsuit to recover $1.93B seized by FDIC.
Rivian (RIVN) could break free of Amazon’s (AMZN) exclusivity deal.
China’s consumer inflation unexpectedly flat, producer prices fall.
Eisai (OTCPK:ESALF): Upside targets after Leqembi full approval.
Deep dive: Bridgestone (OTCPK:BRDCY) vs. Michelin (OTCPK:MGDDF).
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