“We remember all those romances back at summer camp; they were exciting, they were hot, they were thrilling but when summer camp ended, they ended,” — Michael Arone, chief investment strategist at State Street Global Advisors, warning investors that the recent market rally could cool down as the summer ends. Summer camp and bull markets: that’s what it’s all about.
- U.S. markets closed lower in a light volume Monday, dragged down by oil as investors wait for important economic announcements later in the week along with key earnings reports
Alternatives to Watch
- Oil briefly dropped down to three-month lows as investors fear that the supply glut is back as the dollar strengthened and inventory counts rose
- Shares of Nintendo dropped an astounding 17% after the company pointed out that it only owns 32% of Pokémon Go. What a buzzkill
Yahoo Sweepstakes are Finally Over
…And Verizon is the winner. After a painfully long process, Verizon finally agreed to buy Yahoo for $4.83 billion yesterday. In return for all that dough, Verizon will own Yahoo’s core internet business and stands to inherit some real estate as well. Although many believe CEO Marissa Mayer was at the root of Yahoo’s growth problems, she stands to make over $50 million if fired. Not bad. Some more gossip: Verizon plans to merge Yahoo with AOL (which it purchased last year) in hopes of competing with Facebook and Alphabet in the digital advertising space—good luck with that one.
Time to Start Playing Catch Up
…And Sprint has got something to prove. For years, Sprint has struggled to keep up with Verizon and AT&T, especially when it comes to cell coverage. In order to gain ground, CEO Marcelo Claure has been on a mission—focusing his efforts on the customer. How so? The nation’s fourth-largest wireless carrier has offered expert advice for Pokémon Go players, and has also given customers deep discounts. It all adds up to an impressive 173,000 new postpaid customers gained this quarter. Watch your backs, Verizon and AT&T.
…There was Redbox. Ring a bell? Redbox owner Outerwall agreed to be bought by Apollo Global Management yesterday, in light of its struggling DVD business. The buyout means Outerwall will be going private, and lucky for shareholders, shares are being bought up at an 11% premium. So what will happen to our trusty old Redboxes? It has yet to be seen, but Redbox is supposedly in the process of testing its own streaming service—and with Netflix confidently inhabiting its number one spot, that could be a seriously uphill battle.
Twitter Goes Live
…And we’re not just talking live tweeting. Thanks to a partnership with the MLB and NHL, Twitter has announced that starting this fall, viewers will be able to catch weekly live streams of professional baseball and hockey games for free. Yep, free. Twitter already has the rights to stream Thursday Night Football, and last week made a deal with the NBA to stream new pregame shows. Although Disney—the proud owner of ESPN—still controls the lion’s share of live sports, keep an eye out for Twitter.
- Amazon expands drone testing in Britain
- AMC Theatres ups takeover bid for Carmike Cinemas to $1.2 billion
- All 2017 Ford vehicles are getting Apple CarPlay
- Spotify to target ads based on playlists
- Monday: Sprint (-), Gilead Sciences (+/-) Earnings
- Tuesday: Apple, Caterpillar, JetBlue, McDonald’s, Twitter, Under Armour, Verizon Earnings; FOMC Meeting Begins; New Home Sales; Consumer Confidence
- Wednesday: Boeing, Coca-Cola, Comcast, Deutsche Bank, Facebook, Hilton Earnings; FOMC Meeting Announcement
- Thursday: Alphabet, Amazon, Expedia, Ford, Hershey, Mastercard Earnings; International Trade in Goods; Weekly Jobless Claims
- Friday: Anheuser-Busch, Chevron, Exxon Mobil Earnings; Second Quarter GDP
TAKE THE MONEY AND RUN
With the RNC wrapping up last week and the DNC kicking off, it’s clear that presidential elections spell economic uncertainty. And if there’s anything investors hate, it’s uncertainty. A recent UBS survey found that a large portion of millionaires are looking to back off from the stock market after votes are counted in November. Here’s how it breaks down:
- The survey found that 47% of Americans with $1 million or more in investable assets may reduce their market exposure due to the riskiness of the current election. 9% have already made this move.
- Though there are different opinions on who should win, 61% are confident that if their preferred candidate wins, the market will benefit. A similar 66% said the loss of their preferred candidate would hurt the market.
- Perhaps most shockingly, nearly 33% of those surveyed said they may withdraw entirely from the market following the results of the election.
- But, these wealthy individuals are still split on exactly who should win come November. Millionaires, they’re just like us!
INTERVIEW QUESTION OF THE DAY
Quick! What is the sum of the numbers from 1 to 100? (Answer)
BUSINESS TERM OF THE DAY
Duration — a measure of the sensitivity of the price of a fixed-income investment to a change in interest rates, expressed as a number of years. The bigger the duration number, the greater the interest-rate risk (rate fluctuations) or reward for bond prices.
FOOD FOR THOUGHT
If someone told you that less pay means better performance, would you believe them? Research firm MSCI found that the best-paid CEOs tend to run some of the worst-performing companies and vice versa, calling into question modern CEO compensation. That’s a head-scratcher.
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