“On July 1, 2016, Puerto Rico will default on more than $1 billion in general obligation bonds” — Puerto Rico Governor Garcia Padilla in an editorial. Looks like the commonwealth won’t be paying bondholders anytime soon. Surprise, surprise.
- U.S. markets rose again, leading to the biggest 3-day gain in four months, as expectations of expanded stimulus programs eased worries of Brexit fallout
Alternatives to Watch
- Yesterday, Great Britain joined the list of nations with negative bond yields when its two-year plummeted into negative territory after Bank of England Governor Mark Carney hinted at a summer rate cut
- Shares of Deutsche Bank tumbled to 30-year lows after the IMF labeled the bank “the riskiest bank in the world” days after it was one of two banks to fail the Fed’s stress tests
Shoot for the Starz
…And that’s what Lions Gate Entertainment did. Lions Gate bought cable TV provider Starz for a staggering $4.4 billion. Lions Gate has had a lot of ups and downs lately—the ups being the blockbuster Hunger Games movies and the downs being the lackluster Divergent series. The acquisition should add a bit of stability, thanks to Starz’s steady subscription revenue and expansive TV distribution network. The new duo hopes to better compete with big names like Time Warner Cable. Maybe we’ll see a Hunger Games show?
Mondelez Wants Some Kisses
…But it can’t have ‘em. Yesterday morning, Mondelez International made a $23 billion dollar bid for Hershey. Who the heck is Mondelez? Just the second largest snack manufacturer on the planet and the maker of “milk’s favorite cookie.” The Mondelez-Hershey deal would have created the world’s largest candy company. The problem? In the afternoon, Hershey’s board unanimously rejected the offer, going so far as to say it “provided no basis for further discussion.” That takes care of that.
And the Court Says
…Access denied. Yesterday, a federal appeals court overturned a $7.25 billion antitrust settlement from 2012 between retailers and Visa and Mastercard. The court ruled that retailers had been “inadequately” represented during the settlement process, which began after retailers accused credit card companies of unfair processing fees. The decision is a big blow to credit card companies, as they hoped that the settlement would halt the pattern of retailers suing the credit card industry.
More Bad News for EU
…S&P is not having any of it. Shortly after the U.K.’s credit score was cut, Standard and Poor’s lowered the EU’s rating to AA in the wake of Brexit. Yep, the EU now has a lower credit rating than Finland and is on par with nations like Kuwait. What’s the big deal? Investors use the scores to determine the safety of their fundsand the likelihood that they’ll get their money back. On the bright side, S&P expects “that no other member states will leave the EU.” But if Britain proved anything, it’s that you never know.
- Spotify says Apple won’t approve a new version of its app
- Tesla’s autopilot under investigation after fatal crash
- Hertz signs rental deals with Uber and Lyft
- Android N’s name is officially Nougat
- Monday: International Trade (-)
- Tuesday: Nike (+/-), Carnival (+) Earnings; U.S. Q1 GDP (3rd Estimate) (+)
- Wednesday: Monsanto (-), General Mills (+) Earnings; Personal Income and Outlays (+)
- Thursday: Constellation Brands (+), ConAgra (+/-), Micron (-), Darden Restaurants (+/-) Earnings; Weekly Jobless Claims (-)
- Friday: ISM Manufacturing Index; June Auto Sales; Construction Spending
MILLENNIALS LOOK ON THE BRIGHT SIDE
With the 21st Century came the creation of Facebook, the invention of the iPhone, the election of the first African American president and, apparently, a pretty sizeable ego boost. As it turns out, millennials are getting pretty cocky when it comes to their investing skills, but is this confidence warranted? You be the judge:
- A new survey conducted by Securian Financial Group found that millennials are more positive about the future and their investments compared to their parents. They also see themselves as significantly more knowledgeable.
- Over 70% of millennials foresee a bull market in the next couple of years, while boomers are split 50-50 between bull and bear. While only 17% of the boomers claim to be very informed about investments, around 42% of millennials make the same claim. Maybe wisdom doesn’t come with age after all?
- But with age does come patience, something millennials don’t seem to have. While 60% of boomers say they wouldn’t make changes to their portfolio in a crisis (Brexit, for instance), only 37% of millennials can say the same. Pshh, patience is overrated.
INTERVIEW QUESTION OF THE DAY
Why is a good credit rating important for sovereign entities and countries? (Answer)
BUSINESS TERM OF THE DAY
Sovereign Credit Rating — A sovereign credit rating is the credit rating of a country or sovereign entity. It gives investors insight into the level of risk with investing in a particular country, based on evaluations of a country’s economic and political environment.
FOOD FOR THOUGHT
It’s a fantastic day to be an Indian government worker. Prime Minister Modi approved a 23% increase in pay for current employees and pensioners with hopes that they spend, spend, spend.
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