September 30 - October 4, 2024
The U.S. dollar is strengthening against major currencies, WTI oil rises on Middle East supply risks, and gold prices decline
The S&P 500 is up 0.23%, the Nasdaq is up 0.42%, and the Dow Industrials is up 0.44% WTD
The 10-Yr U.S. Treasury yield has increased +0.214% to a current yield of 3.956%, whereas the 30-Yr U.S. Treasury yield increased +0.141% to a current yield of 4.248%
Crude oil prices increased 8.69% to a current $74.39/bbl while bitcoin decreased 7.11% to a current $60,979.10/coin
Defense stocks surged, with Lockheed Martin and RTX leading gains, after Iran's missile attack on Israel heightened fears of a broader conflict, pushing the Global X Defense Tech ETF up nearly 2% [WSJ]
High vehicle prices and borrowing costs are limiting U.S. auto sales, with third-quarter results down 1.9%, as affordability concerns keep buyers on the sidelines despite some price reductions and increased leasing [WSJ]
The British pound has rebounded as the top-performing G-10 currency in 2023, boosted by high credit rates, investor confidence, and foreign investment following political stability under Keir Starmer [WSJ]
Greg Abel is pushing for higher efficiency at BNSF Railway by bringing in Ed Harris to improve operations, while seeking profit gains similar to railroads using precision scheduled railroading [WSJ]
SPDR tech fund rebalances, Nike faces a sales slump, and luxury brands are shifting to smaller, affordable items
SPDR tech fund investors faced an imbalance with outsized Nvidia exposure over Apple, despite similar market caps, prompting major rebalancing and revealing challenges in passive investing with big tech [WSJ]
Nike is facing a sales slump due to oversupplying limited-edition sneakers, leading to decreased demand and diluted brand exclusivity, with profits falling and new leadership tasked with addressing the challenges [WSJ]
Robotaxis need large passenger networks to succeed, with Uber leveraging partnerships like Waymo, while Tesla aims to build its own costly autonomous fleet, posing significant scaling challenges [WSJ]
China faces a severe real estate glut, with up to 90 million empty housing units, worsened by a shrinking population and struggling smaller cities, despite government efforts to revive the property market [WSJ]
Luxury brands are turning to smaller, more affordable handbags and accessories to win back middle-income shoppers and boost sales, as high prices and cautious consumer demand have hurt their profitability [WSJ]
M&A activity continues to remain mixed with developments in technology, CPG, and energy
FTC cleared Chevron's $53B merger with Hess and banned John Hess from the board [CNBC]
ADNOC will buy German chemicals maker Covestro for $16.3B, including debt [RT]
TPG and Singapore's GIC agreed to buy German metering company Techem from majority owner Partners Group for $7.5B [BBG]
Ares is in talks to buy a 10% stake Miami Dolphins, which includes Hard Rock Stadium and Miami GP, from billionaire Stephen Ross at an $8.1B valuation [SP]
PE firm TPG will acquire AT&T's remaining 70% in pay-TV firm DirecTV for $7.6B cash and merge it rival Dish from EchoStar in a $9.8B debt deal [WSJ]
Australian property listings firm REA abandoned its $8.3B pursuit of UK rival Rightmove [FT]
Insurance giant Marsh McLennan agreed to acquire McGriff Insurance Services for $7.8B [RT]
Tower firm Vertical Bridge will acquire leasing rights for thousands of Verizon's towers for $3.3B [WSJ]
PepsiCo agreed to acquire Siete Foods for $1.2B [WSJ]
Russian billionaire Vladimir Lisin is set to acquire Russian baby food producer Progress for $745M [RT]
Sony will acquire rock band Pink Floyd's music catalog for ~$400M [FT]
Recent developments across four key industries highlight Oil prices surging 5.1%, OpenAI raising $6.6 billion, and Eli Lilly strengthens its lead in the weight-loss drug market
Energy & Natural Resources
Oil prices jumped 5.1% after President Biden suggested possible U.S. support for an Israeli strike on Iranian oil facilities, raising fears of conflict and higher gas prices before the election [WSJ]
Amid rising oil prices and Middle East conflict, traders are increasingly betting on crude oil reaching up to $100 or more, with call options activity hitting a two-year high [WSJ]
Technology, Media, & Telecommunications
Microsoft plans to invest $4.75 billion in Italy over the next two years to expand cloud and AI infrastructure, aiming to support the country's digital transformation and boost its presence in the growing AI market [WSJ]
OpenAI raised $6.6 billion in new funding, valuing the company at $157 billion, despite internal turmoil, as it continues to lead the AI market with ChatGPT's success and rapidly developing new products [WSJ]
Oracle plans to invest over $6.5 billion to establish a public cloud region in Malaysia, supporting the country's AI and cloud services demand while aligning with its goal of becoming a Southeast Asian AI hub [WSJ]
Healthcare & Life Sciences
Baxter, the U.S.'s largest IV fluid maker, will cut hospital shipments by 40% after Hurricane Helene flooded its North Carolina plant, causing a significant supply-chain disruption that hospitals are managing by conserving fluids [WSJ]
Eli Lilly has resolved the tirzepatide shortage, allowing it to meet rising demand and limiting the production of knockoff versions by compounding pharmacies, further boosting its position in the weight-loss drug market [WSJ]
Financial Services
The U.S. labor market showed strength with 254,000 jobs added in the last month, beating expectations and lowering the unemployment rate to 4.1%, suggesting progress towards a soft landing ahead of the upcoming presidential election [WSJ]
Money managers like Apollo and BlackRock are racing to offer private credit funds to retail investors, despite regulatory and liquidity challenges, as the $1.7 trillion private credit market is expected to grow significantly in the coming years [WSJ]
Cole LaCour
Oct 4, 2024
