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mXa Roundup - Volume 39

May 27th - 31st, 2024

The second estimate for first-quarter GDP was revised lower to 1.3% quarter-over-quarter annualized rate due to decreased consumer spending

  • The S&P 500 is down 0.73%, the Nasdaq is down 3.42%, and the Dow Industrials is down 2.39 % WTD; Market attention is turning to the release of April personal consumption expenditures (PCE) inflation data, with expectations for headline PCE to remain unchanged at 2.7% year-over-year

  • The 10-Yr U.S. Treasury yield has increased +0.030% to a current yield of 4.497%, whereas the 30-Yr U.S. Treasury yield increased +0.063% to a current yield of 4.636%

  • Crude oil prices increased 1.61% to a current $78.12/bbl while bitcoin decreased 0.20% to a current $68,335.60/coin

  • The reliability of the inverted yield curve as a recession predictor is being questioned as it has been inverted for a record period without the occurrence of an economic slowdown, challenging long-held assumptions about market behaviors [WSJ

  • Streaming companies are increasingly offering bundled services to attract customers and simplify billing, with major players like Disney and Warner Bros. Discovery announcing discounted packages to combat rising subscription costs and customer churn [WSJ

  • Stock market indexes have reached new highs, with Nvidia, Microsoft, Apple, and Alphabet driving the surge, collectively adding $1.4 trillion in market value this month, largely fueled by the AI boom [WSJ

  • Elliott Investment Management's $2.5 billion investment and proposal for a flexible capital plan at Texas Instruments has met Wall Street skepticism, with doubts about changes to TI's high-expenditure strategy [WSJ

  • BlackRock's iShares Bitcoin Trust has surpassed the Grayscale Bitcoin Trust to become the world's largest bitcoin exchange-traded fund, with $19.68 billion in assets under management [WSJ

  • Chewy reported a significant increase in net income and sales, outperforming Wall Street expectations and its brick-and-mortar rivals, driven by a shift in customer spending towards its pharmacy and a growth in its sponsored ads business [WSJ]

The AI-driven demand surge is boosting Nvidia and sectors like utilities, while Dell's AI server business propels its market valu

  • After a period of mediocre performance, the Plymouth County Retirement Association, with a $1.4 billion fund, has risen to the top 10% of U.S. pensions in the last three years, largely due to a strategic early bet on rising interest rates [WSJ

  • Dell has seen its market value and stock prices soar due to high demand for its AI server business, fueled by Nvidia's promising sales forecast for AI chips, with the company's server revenue expected to show significant year-over-year growth [WSJ]

  • Research by economists and an analysis by the Wall Street Journal suggest that Republican-dominated areas in the U.S. have experienced higher inflation rates than Democratic areas, a trend evident both at the metropolitan and state levels [WSJ]

  • Demand for artificial intelligence continues to surge, driving significant gains for companies like Nvidia and benefiting sectors like utilities, energy, materials, and data center operations across the broader market [WSJ]

M&A activity is on the rise this week with major developments within energy taking the the headlines 

  • US oil giant ConocoPhillips agreed to buy Marathon Oil in a $22.5B all-stock deal [RT

  • Hess shareholders approved Chevron's $53B takeover despite a dispute with ExxonMobil over a key asset [BBG

  • Google-parent Alphabet is considering an all-stock bid for $32.5B marketing software firm HubSpot [CNBC

  • T-Mobile agreed to acquire almost all of US Cellular's wireless operations in a $4.4B deal [RT

  • Midstream energy company Energy Transfer agreed to acquire WTG Midstream Holdings in a ~$3.25B cash-and-stock deal [RT

  • Czech billionaire Daniel Křetínský agreed to acquire the Royal Mail-owner International Distribution Services at a $6.7B valuation [FT]

  • Oil and gas developer Double Eagle is exploring a $6.5B sale of its latest Permian Basin-based producer Double Eagle Energy Holdings IV [RT

  • US pharmaceutical giant Merck agreed to acquire privately held biotech EyeBio for ~$3B [RT

  • Oil and natural gas company Aethon Energy will acquire Tellurian's upstream assets for $260M [RT

  • Johnson & Johnson agreed to acquire rights to a drug from privately held Numab Therapeutics for ~$1.3B [RT

  • Japanese industrial group Asahi Kasei will acquire Swedish biotech Calliditas Therapeutics for ~$1.1B [BBG

  • Aerospace components maker TransDigm will acquire test manufacturer Raptor Scientific from PE firm L Squared Capital Partners for $655M [PRN]

Recent developments across four key industries highlight Saudi Arabia’s plan to raise up to $11.95 billion, America’s healthcare market faces risks, and Google improving its AI search

Energy & Natural Resources

  • Saudi Arabia's government intends to sell a portion of its stake in oil giant Aramco, aiming to raise up to $11.95 billion by selling shares representing about 0.64% of the company [WSJ

  • ConocoPhillips has agreed to acquire Marathon Oil in an all-stock transaction valued at $17.1 billion, a move that reflects ongoing consolidation in the energy sector amid falling profits at Marathon [WSJ

  • U.S. crude oil inventories saw a larger-than-expected decline last week, dropping by 4.2 million barrels, while gasoline stocks increased as refineries ramped up production [WSJ

  • Energy Transfer LP is set to acquire WTG Midstream Holdings LLC for approximately $3.25 billion, consisting of $2.45 billion in cash and 50.8 million newly issued common units, with the deal expected to close in the third quarter [RZ

Technology, Media, & Telecommunications

  • Google is refining its AI-driven search responses after encountering issues with bizarre and incorrect answers, prompting adjustments and a dozen technical improvements following user feedback [WSJ

  • Google announced a $2 billion investment to establish its first data center in Malaysia, aimed at powering new cloud services and meeting the growing demand for computing in Southeast Asia [WSJ

  • Salesforce's recent financial results disappointed investors as revenue growth slowed to a record-low 10.7% in the fiscal first quarter, with billings increasing by only 3% [WSJ

Healthcare & Life Sciences

  • The U.S. Department of Health and Human Services is leading efforts to map cybersecurity risks associated with single technology suppliers dominating aspects of the healthcare market, following a ransomware attack on UnitedHealth Group's Change Healthcare unit [WSJ

  • The consolidation trend in the American healthcare market, driven by mergers and private equity investments, has led to diminished competition, increased prices, and risks to essential healthcare services [WSJ

Financial Services

  • First Republic Bank's acquisition by JPMorgan Chase led to customer dissatisfaction, with many experiencing issues such as payment failures and long wait times for support [WSJ

  • Bill Ackman's investment firm, Pershing Square, is planning to go public, selling a stake valued at about $10.5 billion to investors as a precursor to a potential IPO [WSJ

Outside of standard macroeconomic updates and M&A developments, Donald Trump, Claudia Sheinbaum, and Luka Dončić are names that have led news cycles

  • Donald Trump was convicted of 34 felonies for hiding hush money payments, becoming the first former president convicted; his 2024 campaign may be affected, with sentencing scheduled before the Republican National Convention [WSJ

  • Endorsed by President Andrés Manuel López Obrador, Claudia Sheinbaum is set to become Mexico's first female president, facing challenges in U.S. relations and organized crime while continuing her mentor's nationalist policies [WSJ

  • As Israeli forces intensify their military operations in central Rafah, tensions escalate between the Israeli government and families of hostages held by Hamas, who criticize the government for prioritizing military objectives over the safe recovery of the hostages [WSJ

  • PricewaterhouseCoopers (PwC) has entered a significant deal with OpenAI, making it the largest customer and first reseller of ChatGPT Enterprise, aiming to deploy over 100,000 licenses across its U.S. and U.K. employees [WSJ

  • Luka Doncic led the Dallas Mavericks to their first NBA Finals appearance since 2011, scoring 36 points in a decisive 124-103 victory over the Minnesota Timberwolves, securing a 4-1 series win in the Western Conference finals [RT]

Cole LaCour

May 31, 2024

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