July 29th - August 2nd, 2024
Equity markets closed higher in July, with the S&P 500 gaining just over 1%, marking its eighth monthly increase in the past nine months
The S&P 500 is up 0.24%, the Nasdaq is down 0.80%, and the Dow Industrials is up 0.52% WTD
The 10-Yr U.S. Treasury yield has decreased -0.239% to a current yield of 3.938%, whereas the 30-Yr U.S. Treasury yield decreased -0.206% to a current yield of 4.236%
Crude oil prices decreased 1.84% to a current $75.94/bbl while bitcoin increased 5.33% to a current $64,605.30/coin
Investor confidence in Federal Reserve rate cuts carries risks, including potential inflation spikes from geopolitical events and the Fed's slow response to an economic slowdown, which could disrupt market expectations [WSJ]
Japan’s Nikkei Stock Average experienced its largest single-day drop in over four years, closing 5.8% lower due to signs of a cooling U.S. economy and an interest rate hike by the Bank of Japan [WSJ]
Banks and lenders are increasingly seizing distressed commercial properties, with foreclosure portfolios reaching $20.5 billion in the second quarter, the highest since 2015, driven by high interest rates and slow office worker returns [WSJ]
China installed more solar capacity last year than the U.S. has in its entire history, leading to concerns that solar farms are encroaching on cropland and undermining food security goals [WSJ]
QXO, a company formed by Brad Jacobs, saw a dramatic rise and fall in share prices due to limited tradable shares and high investor demand, until a recent filing increased share availability and corrected the inflated valuation [WSJ]
The popularity of PHEVs may reduce future battery demand and high interest rates have increased the value of mortgage servicing rights
High interest rates have benefited mortgage servicing companies, as homeowners hold onto their mortgages longer, increasing the value of mortgage servicing rights and leading to higher interest earnings on escrow accounts [WSJ]
Plug-in hybrid electric vehicles (PHEVs) are rapidly gaining popularity, especially in China where sales surged 70% in early 2024, potentially reducing future battery demand as their smaller batteries led J.P. Morgan to cut its 2030 forecast for China's battery demand by 10% [WSJ]
The U.S. box office had a disappointing second quarter with sales down 27% year-over-year to $1.95 billion, marking the biggest drop since 1976, excluding 2020 [WSJ]
BBVA's strong Q2 earnings, driven by a 57% rise in domestic profit and Spain's robust economic growth, support its bid for Banco de Sabadell but also strengthen Sabadell's defense [WSJ]
M&A activity continues to remain depressed
$5.6B-listed cybersecurity firm Tenable is exploring a sale after receiving takeover interest [BBG]
PE firm Astorg is exploring a sale of its fund services business IQ-EQ at a potential $4.3B valuation [RT]
Accounting firm Marcum will acquire US's only listed accountancy CBiz for $2.3B in cash and stock [FT]
Bain, Cinven, Blackstone, and others are considering a $2.2B bid for Carlyle's Italian aerospace components manufacturer Forgital [BBG]
Ex-Warner Music chair Edgar Bronfman Jr. is in talks to bid for Paramount Global parent National Amusements [AX]
Private credit giant HPS Investment Partners will acquire Chorus Aviation's regional-aircraft leasing business for $1.4B, including debt [BBG]
Indigenous communities will acquire a 5.3% stake in pipeline operator TC Energy's Canadian natural gas pipeline system for $722M [RT]
Societe Generale acquired a 75% stake in energy-focused asset manager Reed Management and will invest $270M in the company [RT]
Canva will acquire image generation startup Leonardo.ai [BBG]
AI finance firm Pagaya Technologies agreed to buy ML-enabled asset manager Theorem Technology [BBG]
Viaro Energy agreed to buy North Sea gas field assets from Shell and Exxon [BBG]
Recent developments across four key industries highlight U.S. crude oil inventories falling for the fifth consecutive week, Microsoft shares dropping nearly 3%, and International Consolidated Airlines Group's shares rising
Energy & Natural Resources
Shell's second-quarter adjusted earnings were $6.29 billion, down from $7.73 billion in Q1, driven by lower refining margins and a slump in integrated gas trading, but still exceeding analysts' expectations of $6.01 billion [WSJ]
U.S. crude oil inventories fell by 3.4 million barrels last week, marking the fifth consecutive decline, amid rising exports and steady demand, according to the U.S. Energy Information Administration [WSJ]
Technology, Media, & Telecommunications
Amazon's Q2 sales rose 10% year-over-year to $148 billion, with AWS revenue up 19%, but shares fell over 7% due to weaker-than-expected revenue growth and continued heavy AI investments [WSJ]
Meta announced plans to increase its 2024 capital expenditures to between $37 billion and $40 billion, up from the previous range, and expects significant growth in capex in 2025, reflecting its heavy investment in generative AI [WSJ]
Investor wariness over heavy AI investment led to a nearly 3% drop in Microsoft's shares, reflecting broader skepticism towards big tech's high capital expenditures amid recent stock slides [WSJ]
Healthcare & Life Sciences
The ambition of Theranos for finger-prick blood tests is being realized by companies like Becton Dickinson and Babson Diagnostics, who have introduced new devices in Austin, Texas, for conducting routine medical tests with drops of blood [WSJ]
Financial Services
Barclays raised its net interest income guidance for 2024 following stronger-than-expected Q2 earnings, reporting a pretax profit of £1.94 billion and launching a £750 million share buyback [WSJ]
International Consolidated Airlines Group's shares rose after announcing its first dividend since the pandemic and reporting better-than-expected earnings, with an interim dividend of 3 European cents per share [WSJ]
Cole LaCour
Aug 2, 2024
