FTC Loses First Bid to Block Microsoft’s Acquisition of Activision Blizzard. The Focus Turns to U.K. Regulators.
Used Car Prices Drop By a Record. Carvana Stock Is Up, a Lot.
CNN
—
Two Los Angeles County sheriff’s deputies have been taken off field duty as their department investigates force they used when a couple was being detained at a Southern California grocery store last month, the county sheriff’s department said.
The encounter unfolded on June 24 as deputies responded to a report of a robbery in the city of Lancaster and tried to detain a couple matching the description of suspects given by store security in calls to 911, the Los Angeles County Sheriff’s Department said without releasing details about the descriptions.
“As deputies attempted to detain the individuals described by store security personnel, the encounter escalated into a use of force incident that was captured by a community member with a cell phone camera,” the sheriff’s department said in a news release. “The video is disturbing.”
County Sheriff Robert Luna echoed those sentiments at a news conference Wednesday, saying he is “also committed to full transparency” and decided to release the store video publicly.
“I have seen the video – both the video collected by the community member and our body-worn camera footage that we put out Monday night. And it’s disturbing. There’s no ifs and buts about it,” Luna said.
On Wednesday night, protesters gathered at the WinCo grocery store to protest the use of force witnessed.
“I just couldn’t believe my eyes, I was just so upset,” Lisa Garrett, who recorded cell phone video footage of the detention, said at the protest. “You weren’t there. I was there. It was really bad.”
The agency released body camera footage of the encounter, which shows a deputy arrive on scene and tell a man repeatedly to put his hands on the hood of a police cruiser. When the man refuses, the officer repeatedly tells him to sit down.
The man is heard saying he’s done nothing wrong and says, “They approached us first, man,” but it’s not clear who he is referring to.
The deputy radios dispatch that he has made contact and that the man is uncooperative, and then tells the man, “Sit down, dude. We’ll figure this out.”
The man sits on a rock after the deputy tells him to, and he says, “I told them to call the police” and “I waited for you.”
The video shows deputies approach the man, telling him they were going to do a pat-down. The man says, “I don’t have nothing.”
The two deputies handcuff him while the man says, “I’m not even being resistant.” He asks why he is being detained and deputies do not answer, the video shows.
While he is being handcuffed, the man is heard saying his arm is “f**ked up.”
After the man is handcuffed, one angle of the footage shows a deputy forcing him to the ground. He tells the deputy that he’s “not going to fight” him, and that his wife has cancer.
While the man was being handcuffed, a woman recorded video of it – separate from the bystander that authorities say also recorded video.
In one deputy’s body camera footage, the woman can be heard saying, “You can’t touch me” as the deputy approaches her and reaches for her cell phone and says, “Stop.”
A struggle ensues and the woman is thrown to the ground by the deputy, video shows. “Get down on the ground,” the deputy says multiple times. The deputy’s hand is seen placed on the back of the woman’s neck.
“Stop or you’re gonna get punched in the face,” the deputy says, and the woman threatens to sue him.
The unidentified woman says she can’t breathe and tells the officer to “stop manhandling” her. The deputy sprays a substance into the woman’s face. It is not clear whether the spray was mace or pepper spray. CNN has sought clarification from the sheriff’s department.
The deputy’s knee is placed on her back as he attempts to handcuff the woman, who requests “a commander” repeatedly and states that she isn’t doing anything. The deputy continues trying to handcuff her and says she will get “sprayed again.”
In one clip, the woman can be heard yelling from the ground for a commander. The man tells the deputy, “You don’t have to do this sh*t bro. That’s wrong, man.”
Once the woman is handcuffed, the man is brought over by the other deputy. The man asks the woman if she’s all right. “No, he throw me to the ground,” she replies.
One angle of footage ends with the man and the woman being placed in separate police cars.
The man involved was arrested and cited on suspicion of resisting or delaying an officer, petty theft or attempt at petty theft, and interfering with a business, Luna said. The woman was arrested and cited on suspicion of assaulting an officer and battery after assaulting loss prevention personnel inside the market.
Both have been released, according to Deputy Miesha McClendon.
The footage will be reviewed “to determine if the force used was reasonable, necessary, appropriate, and proportional to the level of actions described,” the sheriff’s department said in the release.
Both deputies have been reassigned from field duty “pending further administrative review,” according to the department.
“We take the use of force very seriously and are determined to establish the facts of the incident,” the release reads.
The investigation into the incident will include the body camera footage, surveillance video from the store and cell phone video taken by the bystander, the sheriff’s department said.
Technology stocks reigned supreme in the first half of the year, far outperforming the wider market. But sustaining that rally will be tough, and investors need to look now for tech stocks that are ready to benefit from the growth of artificial intelligence.
Meta Platforms Inc. launched Threads, its rival to Twitter, a day early Wednesday.
“Let’s do this. Welcome to Threads,” Meta Chief Executive Mark Zuckerberg posted on the new app.
The text-based app, a spinoff of Meta’s META Instagram, had been set to launch Thursday morning, but instead went live for users in the U.S. and more than 100 other…
Meta’s Twitter-rival Threads launches tomorrow: What we know so far
Reuters
—
Cell phones, tablets and smartwatches will be largely banned from classrooms in the Netherlands from January 1, 2024, the Dutch government said on Tuesday, in a bid to limit distractions during lessons.
Devices will only be allowed if they are specifically needed, for instance during lessons on digital skills, for medical reasons or for people with disabilities.
“Even though mobile phones are intertwined with our lives, they do not belong in the classroom,” education minister Robbert Dijkgraaf said in a statement.
“Students need to be able to concentrate and need to be given the opportunity to study well. Mobile phones are a disturbance, scientific research shows. We need to protect students against this.”
The ban is the result of an agreement between the ministry, schools and related organizations.
Schools can find their own way to organize the ban, Dijkgraaf said, but legal rules will follow if this does not yield enough results by the summer of 2024.
The fate of
Microsoft
$69 billion purchase of
Activision
Blizzard will finally be known in the coming weeks—and investors may want to consider taking profits on the videogame maker’s stock before then.
Apple Inc. closed out the June quarter with a bang, clinching a $3 trillion valuation for the first time.
Shares of Apple
AAPL,
advanced 2.3% in Friday trading, given them a market capitalization above $3 trillion. The company previously hadn’t ended a trading session at the milestone mark, though it got close Jan. 3, 2022, when it traded intraday at levels that would have amounted to that valuation level but failed to close there.
The smartphone giant became the first U.S. company to secure a $3 trillion valuation. Its market capitalization alone is larger than the market caps of the S&P 500 Utilities, Real Estate and Materials sectors combined, according to Dow Jones Market Data.
Apple’s close in $3 trillion territory comes 719 trading days after it crossed the $2 trillion threshold, also according to Dow Jones Market Data.
Read: Apple’s march toward a $3 trillion valuation, shown in one chart
Citi Research weighed in late Thursday with a vote of confidence in the stock’s ability to run ever higher from here, with analyst Atif Malik initiating coverage of the shares with a buy rating and $240 target price.
See more: Buy Apple’s stock because it’s more than just a hardware play, Citi says
“We believe the Street is underestimating continued gross margin expansion,” Malik wrote in his note to clients, while adding that he anticipates the “trend of premium iPhones grabbing more share to continue.”
His bullish note came as Apple shares surged 46% so far in 2023 amid a strong first half of the year for Big Tech players.
More from MarketWatch: The Nasdaq-100 is headed for its best first half on record. But the rally faces a high-stakes test in July.
Wedbush analyst Daniel Ives chimed in that Apple shares could come to fetch a higher multiple as the company nears $100 billion in annual services revenue for fiscal 2024, compared with about $50 billion in fiscal 2020.
“Herein lies the key to the valuation re-rating that we believe will continue to take place around Apple’s stock as the Street further appreciates the sheer massive potential of this services revenue that we now assign a valuation in the $1.4 trillion range,” he wrote.
Ives said he thinks a fair valuation for Apple would be about $3.5 trillion by fiscal 2025, though his bull case contemplates the potential for a $4 trillion valuation by that point.
Don’t miss: These are the best-performing stocks in the 2023 bull market — and the worst
Micron Technology Inc. shares rose in the extended session Wednesday after the memory-chip maker’s chief executive called the bottom on the sector, and quarterly results came in better than expected.
Micron
MU,
shares had jumped more than 5% after hours following the release of results, but by the end of the company’s conference call with analysts, the stock was up less than 2%. Shares finished Wednesday’s session with a 0.4% gain to close at $67.07, while the S&P 500 index
SPX,
declined less than 0.1%.
The Boise, Idaho-based company forecast an adjusted loss of $1.26 to $1.12 a share on revenue of $3.7 billion to $4.1 billion for the fourth quarter, while analysts surveyed by FactSet had estimated a loss of $1.07 a share on revenue of $3.88 billion for the fourth quarter, and a loss of $4.65 a share on revenue of $15.32 billion for the year.
Read: Snowflake stock rallies as ‘blizzard’ of AI product announcements make Wall Street happy
In the near term, Micron Chief Executive Sanjay Mehrotra told analysts on the call that while sales forecasts received a considerable boost from larger-than-expected AI sales, forecasts for PC, smartphone and standard server sales are looking worse than feared, and will eat into those gains. All told, however, the CEO told analysts that supply reductions are beginning to stabilize the market.
Micron Chief Financial Officer Mark Murphy said the company took about $400 million in inventory write-downs in the third quarter, contributing to negative gross margins of 16%, an improvement of 15 percentage points sequentially. When Micron reported its worst loss ever a quarter ago, the company had taken a $1.4 billion inventory charge. When Micron started flashing signs of negative margins earlier in the year, many analysts saw that as signs of a bottom on the horizon.
Read: Is Micron selling memory chips for less than they cost to make? That may mean the bottom is near.
Micron makes two types of memory chips: DRAM, or dynamic random access memory, the type of memory commonly used in PCs and servers; and NAND, the flash memory chips used in smaller devices like smartphones and USB drives. After prices for memory soared early in the COVID-19 pandemic, companies overbought large stores of chips to avoid shortages, creating a glut.
“As we have said before, AI servers have six to eight times the DRAM content of a regular server and three times the NAND content,” Mehrotra told analysts on the call. “In fact, some customers are deploying AI compute capability with substantially higher memory content.”
For the third quarter, Micron reported third-quarter loss of $1.9 billion, or $1.73 a share, versus net income of $2.63 billion, or $2.34 a share, in the year-ago period.
The adjusted loss, which excluded stock-based compensation expenses and other items, was $1.43 a share, versus net income of $2.59 a share in the year-ago period.
Revenue dropped to $3.75 billion from $8.64 billion in the year-ago quarter, as a two-year shortage of chips, triggered by the COVID pandemic, flipped quickly, but unevenly, into a glut around this time last year. Analysts surveyed by FactSet had forecast a loss of $1.61 a share on revenue of $3.65 billion.
“We believe that the memory industry has passed its trough in revenue, and we expect margins to improve as industry supply-demand balance is gradually restored,” Mehrotra had said in an earlier statement.
The CEO also called a recent order by the Chinese government to stop using Micron chips because of alleged serious, but unspecified, risks “a significant headwind that is impacting our outlook and slowing our recovery.”
On the call with analysts, Mehrotra said he expects to see a “record total addressable market in calendar 2025 along with a return to more normalized levels of profitability.”
Leading up to earnings, analysts had said that Micron is “at the bottom of this deep downturn,” but “China complicates the recovery plan.” For the year, Micron shares are up 34%, compared with the S&P 500’s 14% gain.
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https://www.barrons.com/articles/nvidia-stock-price-ai-tesla-5af5041c
Shares of newly minted $1 trillion company
Nvidia
were taking it on the chin Monday, and investors searching for a reason should look to
Tesla
The heads of prominent U.S. and Indian companies will meet at the White House on Friday with President Joe Biden and Indian Prime Minister Narendra Modi to discuss investment in areas including artificial intelligence.
Those attending include Sam Altman, CEO of OpenAI, as well as Apple
AAPL,
CEO Tim Cook and Google
GOOG,
GOOGL,
CEO Sundar Pichai. Indian company executives include Mukesh Ambani, chair of Reliance Industries, and Anand Mahindra, chair of Mahindra Group.
“The president and Prime Minister Modi of the Republic of India will meet with senior officials and CEOs of American and Indian companies gathered to discuss innovation, investment, and manufacturing in a variety of technology sectors, including AI, semiconductors, and space,” the White House said.
Friday’s meeting is part of Modi’s high-profile visit to Washington, which included a state dinner at the White House and the announcement of a number of business deals.
Now read: Jet engine, drone deals unveiled as Biden meets India’s Modi
U.S. stocks fell Friday with the S&P 500 index on track for its worst week since the collapse of Silicon Valley Bank in March suggesting the three month rally may be coming to an end.
Investors sought safety in bonds and the U.S. dollar as a wave of interest-rate hikes and hawkish commentary from international central bankers revived worries about global economic growth.
On Thursday, the Dow industrials fell 4.81 points, or less than 0.1%, to close at 33,946.71. The four-day slide is the blue-chip gauge’s longest losing streak since a five-day drop that ended on May 25, according to Dow Jones Market Data. Both the S&P 500 and Nasdaq finished higher, snapping a three-day losing streak.
U.S. stocks on Friday looked set to snap the longest streak of weekly gains since 2019 for the Nasdaq.
Concerns that interest rate rises by central banks might harm global economic growth were weighing on global equities on Friday, analysts said, following interest rate rises in the U.K., Switzerland, Norway and Turkey on Thursday. The latest batch of rate hikes followed moves by the central banks of Canada and Australia earlier this month.
Data released on Friday also showed business activity in the eurozone losing momentum in June, according to a purchasing managers survey. U.S. economic growth may also be slowing. The S&P Global U.S. services index fell to a 54.1 in June from 54.9 in the prior month, a two-month low, while the manufacturing index, meanwhile, slid to a five-month low of 46.9 from 51 in May.
“US stocks are sliding as the global growth outlook continues to deteriorate following soft global PMI readings,” Edward Moya, Senior Market Analyst at Oanda wrote in a note Friday. “The risk of a sharper economic downturn is greater for Europe than it is for the US, so that could keep the dollar supported over the short-term.”
With central banks around the world promising to raise borrowing costs even higher to tame inflation, analysts focused on the potential ramifications of higher interest rates for both the health of the economy and equity valuations. In the U.S., analysts across Wall Street have warned that the S&P 500 and Nasdaq Composite valuations are again looking unreasonably rich.
The price-to-earnings ratio for the S&P 500 based on Wall Street’s forecasts for corporate earnings over the next 12 months is just shy of 19, according to FactSet. That’s higher than the five-year average.
While the Federal Reserve opted to leave interest rates on hold in June, Chair Jerome Powell reiterated in Congressional testimony this week that senior Fed officials strongly support hiking rates “a couple of times” later this year.
Ryan Belanger, founder and managing principal at Claro Advisors, is among the analysts who believe the market’s rally is getting ahead of itself.
“The market is too confident that the Federal Reserve can engineer a soft landing and it would be wise for investors to reduce exposure to stocks,” Belanger said in emailed commentary.
With the S&P 500 down nearly 1.5% for the week, stocks are on track for their biggest such pullback since March 10, FactSet data showed.
Of course, the market is coming off a rally which is leading some to conclude that this might be a healthy pullback. The S&P 500 had climbed for five straight weeks through June 16, its longest such winning streak since November 2021, Dow Jones Market Data show. Meanwhile, the technology-heavy Nasdaq had logged eighth straight weekly advance to mark its longest stretch of gains since March 2019.
“Some of this is a bit of a giveback and when you look at the market action from the last month and a half, we’ve kind of gone parabolic,” said Paul Nolte, senior wealth manager and market strategist at Murphy & Sylvest Wealth Management, during a phone interview with MarketWatch.
Defensive assets like the dollar and high-quality sovereign bonds were outperforming on Friday, with the yield on the 10-year Treasury note
TMUBMUSD10Y,
falling five basis points to 3.744%. Yields on 10-year U.K. gilt
TMBMKGB-10Y,
and 10-year German bunds were down by 10 basis points or more. Crude prices
CL.1,
which are sensitive to expectations for the global economy, fell 1.6% to $68.49 a barrel.
However, U.S. Treasury Secretary Janet Yellen struck an upbeat tone Friday when she said during an interview with Bloomberg that recession risks in the U.S. have faded “because look at the resilience of the labor market, and inflation is coming down.”
Investors will hear from Cleveland Fed President Loretta Mester later. She’s expected to speak at 1:40 p.m. Eastern Time.
The summer haze settling over stocks doesn’t look ready to budge Thursday, with the S&P 500 index
SPX,
in the throes of its longest losing streak since May.
On the bright side, the index is looking at a 6% gain for the June quarter, whose end is just a few days away.
In other corners of the market, the quarter has been less forgiving. Consumer staples, those things you can’t live without, have lost over 1%, perhaps reflecting the tougher economic times we are living in. Within that sector, though, is beer and one name that has indeed had a quartarius horriblis.
Anheuser-Busch InBev’s
ABI,
BUD,
U.S.-listed shares are down about 15%, as Bud Light sales have tumbled following consumer backlash to a social-media campaign featuring trans activist Dylan Mulvaney in April.
But our call of the day from Deutsche Bank says it’s time to buy this unloved stock, even if those Bud Light sales never recover. A team of analysts led by Mitch Collett have upgraded Anheuser-Busch shares to buy from hold and lifted their price target to €60 euros from €59 euros (they didn’t offer an ADR price target).
Recent underperformance of the stock “implies a permanent reduction in ABI’s U.S. business. Our proprietary survey data suggests these headwinds are likely to fade even if we do not expect the U.S. business ever to fully recover from its current challenges,” said Collett.
The analysts pointed to recent Nielson data that showed ABI’s U.S. business currently down 12%, with Bud Light sales off 24% and the rest of its portfolio down 7%. But an analysis of distribution data shows ABI itself isn’t “losing shelf presence” as sales velocity is the primary driver of the decline, which bodes well if consumer sentiment improves, said Deutsche Bank.
Those declines are about a 12% headwind to ABI’s annual net income, which is in line with European underperformance seen by the stock, added Collett and the team.
Read: Bud Light dethroned as top-selling beer by Modelo, as boycott cuts into sales
Deutsche Bank conducted its own survey that showed 24% of Bud Light consumers are no longer buying that brand, with 18% buying less, but 21% buying more and 37% buying the same amount. Those findings are largely consistent with Nielson;s, said the analysts.
Deutsche Bank’s own survey also showed that 42% of Bud Light drinkers expect to be buying Bud Light again in three to six months, versus 29% who see that as unlikely. And 50% expect that battered beer’s reputation will recover in time, versus 30% who says it won’t. “We believe this bodes well for the brand, recapturing some of its lost share,” said Collett and the team.
Analysts at RBC Capital also recently pushed back on the selloff for the stock, saying the hit to the shares and forecasts for the stock are “excessive,” as they don’t see Bud Light’s troubles hurting AB InBev outside the U.S.. They said AB InBev is a “nerve-racking buying opportunity.”
Ahead of Thursday’s open, U.S.-listed Bud shares were up about 1.3%, tracking gains from its Belgian shares.
U.S. stock index futures
ES00,
NQ00,
are drifting lower, with bond yields
TMUBMUSD02Y,
TMUBMUSD10Y,
on the rise and oil prices
CL.1,
also weaker. The Norwegian krone
USDNOK,
is up 1.5% against the dollar after the country’s central bank hiked interest rates 50 basis points. Switzerland also hiked rates, but the Swiss franc is steady
USDCHF,
The British pound
GBPUSD,
is higher after the Bank of England also hiked interest rates by 50 basis points. The Turkish lira was falling slightly after the central bank, under new management, hiked interest rate to 15% from 8.5%, against forecasts for a hike to 20%.
China markets were closed for a holiday, with losses elsewhere, such as Japan
NIK,
and Australia
XJO,
For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.
Federal Reserve Chair Jerome Powell’s second day of testimony on Capitol Hill kicks off at 10 a.m. Eastern. On Wednesday, he said higher interest rates should be expected , but didn’t offer any clues on timing. U.S. weekly jobless benefit claims and current account data are due at 8:30 a.,m. ET, with leading indicators also at 10 a.m., alongside a speech from Cleveland Fed President Loretta Mester. Richmond Fed President Tom Barkin will speak at 4:30 p.m.
The Bank of England will announce an interest-rate decision at 7 a.m. ET and after worse-than-expected inflation data on Wednesday, a 50 basis-point hike hasn’t been ruled out.
Darden Restaurants
DRI,
will report ahead of the open, with Smith & Wesson
SWBI,
due after the close.
Tesla stock
TSLA,
is down 2% in premarket trading on the heels of the EV maker’s worst loss in two months.
Joining recent actions by other big stakeholders cashing in on big gains for Nvidia
NVDA,
a board member just sold $51 million in stock.
A giant drilling machine is moving Stockholm toward an emissions-free future
These were the top searched tickers on MarketWatch as of 6 a.m. :
| Ticker | Security name |
|
TSLA, |
Tesla |
|
MULN, |
Mullen Automotive |
|
NVDA, |
Nvidia |
|
AMC, |
AMC Entertainment |
|
APE, |
AMC Entertainment preferred holdings |
|
NIO, |
Nio |
|
PLTR, |
Palantir Technologies |
|
MANU, |
Manchester United |
|
SPCE, |
Virgin Galactic Holdings |
|
AAPL, |
Apple |
Are Elon Musk and Mark Zuckerberg ready for a cage match?
It’s summertime. Let your kids get bored.
Tokyo streets now offer the chance to snuggle an alpaca
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Stock futures were falling following three straight days of losses for Wall Street. Federal Reserve Chairman Jerome Powell again will be delivering testimony before Congress. His comments on Wednesday that the central bank likely would be raising rates further this year pushed markets lower.
U.S.-listed shares of Logitech International SA, a Swiss maker of computer peripherals and software, were down about 3.6% Monday, amid reports that one of the company’s gamepads was being used to steer the submersible that went missing while taking five people down to the wreck of the Titanic.
Logitech’s $30 F710 gamepad was the controller of the OceanGate submarine vessel that is the subject of a massive sea-and-air search, according to a segment on the “CBS News Sunday Morning Show” by reporter David Pogue that aired last November.
In the segment, OceanGate Chief Executive Stockton Rush, one of the five people currently onboard the submersible, showed Pogue the game controller that he said “runs the whole thing,” causing the reporter to burst out laughing.
Pogue later describes the “MacGyver jerry-riggedness” of the whole thing, which included off-the-shelf components such as lights from Camper World and construction pipes as ballast. Rush explained that other parts of the vessel were made in cooperation with Boeing, NASA and the University of Washington.
As The Verge pointed out, game controllers are used in other instances to control submarine periscopes, including by the U.S. Navy and Elon Musk’s The Boring Company.
On Monday, Pogue tweeted that during his report which was filmed last summer, the submersible got lost for a period — while he was on the surface.
In that instance, the vessel still had contact with the surface. This time, there are no communications, although a Canadian military surveillance aircraft detected underwater noises early Wednesday, as the Associated Press reported.
A statement from the U.S. Coast Guard did not elaborate on what rescuers believed the noises could be, though it offered a glimmer of hope for those lost aboard the Titan. Estimates suggested as little as a day’s worth of oxygen could be left if the vessel is still functioning.
Also on the vessel with Rush are a British adventurer, two members of a Pakistani business family and a Titanic expert.
Authorities reported the carbon-fiber vessel overdue Sunday night, setting off the search in waters about 435 miles (700 kilometers) off the coast of of St. John’s.
The submersible had a four-day oxygen supply when it was put to sea around 6 a.m. Sunday, according to David Concannon, an adviser to OceanGate Expeditions, which oversaw the mission.
Questions remain about how teams could reach the lost submersible, which could be as deep as about 12,500 feet (3,800 meters) below the surface near the watery tomb of the historic ocean liner. Newly uncovered allegations also suggested there had been significant warnings made about the vessel’s safety prior to its disappearance.
Read: Missing Titanic submersible: Here’s what we know so far
Logitech’s stock
LOGI,
is down about 18% in the month to date.
U.S. stock index futures slipped lower Tuesday after a three-day break, with Chinese equities wilting on disappointment over the monetary stimulus efforts in the world’s number-two economy.
On Friday, the Dow Jones Industrial Average
DJIA,
fell 109 points, or 0.32%, to 34299, the S&P 500
SPX,
declined 16 points, or 0.37%, to 4410, and the Nasdaq Composite
COMP,
dropped 93 points, or 0.68%, to 13690.
Investors were in a cautious mood following the U.S. long weekend in honor of the Juneteenth federal holiday, but that’s after a strong run. The S&P 500 gained 2.6% last week, its fifth week in a row of gains, as the tech-heavy Nasdaq Composite took its winning run to eight weeks.
Mike Wilson, Morgan Stanley’s chief U.S. equity strategist, said both retail and institutional investor sentiment are at their highest levels in over two years.
“We note that the consensus is right about 80% of the time, which means such shifts in sentiment and positioning can often be right as the collective intelligence of the market knows best,” he said. “However, given our fundamental view on growth, we find it hard to get on board with the current excitement and narrative supporting it. In other words, if second half growth re-accelerates as expected, then the bullish narrative being used to support equity prices will be proven correct.”
One event that investors have to weigh is the resumption this fall of student loan payments, and what that may mean for consumers’ disposable income. Student loan payments have been paused since the start of the pandemic in March 2020.
China cut its 1- and 5-year lending rates by 10 basis points, which investors viewed to be modest, particularly after a Friday state council meeting didn’t result in other concrete measures. According to Societe Generale, there were expectations the 5-year rate, the benchmark for mortgages, would be cut by 15 basis points.
The Hang Seng
HSI,
fell 1.5% in Hong Kong.
Alibaba
BABA,
the Chinese internet giant, also was in the spotlight after announcing that its CEO and chairman will step down to focus on the cloud division, with Brooklyn Nets owner Joseph Tsai becoming chairman.
Tuesday’s economic data include housing starts data, which showed a 21.7% rise in May after a revised 2.9% drop in April. Building permits also climbed 5.2% in May.
A panel later Tuesday will include both New York Federal Reserve President John Williams and Fed Vice Chair for Supervision Michael Barr. On Wednesday Fed Chair Jerome Powell is due to deliver semi-annual congressional testimony.
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https://www.barrons.com/articles/virgin-galactic-stock-price-space-flight-d6f730d1
Virgin Galactic
shares were up more than 40% in premarket trading Friday after the company announced its first commercial flight into space.
By Joe Hoppe
The U.K. Competition and Markets Authority on Friday said it has cleared Amazon.com’s proposed $1.7 billion acquisition of iRobot Corp.
The regulator, which had launched an initial formal investigation in April into the takeover of the Roomba maker, concluded that the deal wouldn’t lead to competition concerns in the U.K.
The deal remains under regulatory review in other jurisdictions. In September, iRobot said the U.S. Federal Trade Commission formally requested documents from both companies explaining the deal’s purpose and rationale. A securities filing by iRobot said both companies would cooperate with the FTC’s investigation.
After an investigation, which typically takes up to a year, the FTC can sue to block a merger, seek concessions such as divestitures or decline to take action, allowing a deal to close.
“We’re working cooperatively with the relevant regulators in their review of the merger,” an Amazon spokesperson said at the time.
Write to Joe Hoppe at joseph.hoppe@wsj.com
