Nasdaq closed at a record high, Paramount’s streaming service on the block, ‘Roaring Kitty’ took 6.6% of Chewy’s shares
Johannes Eisele AFP Getty Images
This report is from today’s CNBC Daily Open, our international market newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. As you see? You can subscribe here.
What you need to know today
Nasdaq record
Wall Street started the second half of the year with modest gains, driven by continued strength in megacap stocks. The Dow Jones Industrial Average rose 0.13, while the S&P 500 gained 0.23%. The tech-heavy Nasdaq Composite closed at a record high, led by Microsoft’s 2.19% gain and Nvidia’s 0.6% rise. Meanwhile, the yield on the 10-year Treasury rose ahead of key labor market data this week. US oil prices rose 2.3% ahead of the Fourth of July holiday.
A streaming deal?
Paramount Global is exploring integrating its Paramount+ streaming service with other existing platforms, according to people familiar with the matter. The company is in discussions with several media and technology companies, including Warner Bros. Discovery. The merger could help the combined entity compete with streaming platforms Netflix and Disney. The move marks a new wave of consolidation in the streaming industry as companies seek to gain a foothold in a competitive market.
Something chewy
Keith Gill, known as “Roaring Kitty,” has taken a 6.6% stake in Chewy, buying more than 9 million shares worth more than $245 million, according to a Securities and Exchange Commission filing. Gill, the famous meme stock trader, is now the third largest shareholder in the pet food e-commerce company. Shares of Chewy rose more than 9% on Monday but reversed course to close 6.6% lower, with Wall Street analysts warning volatility is not good for the pet retailer.
Boeing, Spirit up
Shares of Boeing and Spirit AeroSystems rose 2.58% and 3.35%, respectively, after Boeing agreed to buy back fuselage maker Spirit in a $4.7 billion all-stock deal. The deal gives Boeing more control over production as it faces regulatory scrutiny over safety concerns. Separately, Airbus will acquire Spirit’s manufacturing facility dedicated to Airbus aircraft for $1. Spirit will pay $559 million in damages to Airbus. Plants in Belfast, Wichita and North Carolina produce wings, fuselages and other components for the A220 and A350. Airbus shares rose 2.6% in Paris.
Japanese stocks rose, if weakened
Markets in the Asia-Pacific region were mixed, with Japan’s export-heavy Nikkei 225 and the broad-based Topix rising 1.1%. If it falls, it remains at a 38-year low. South Korea’s Kospi fell even as June inflation was weaker than expected, raising the prospect of a rate cut. Australia’s S&P/ASX 200 fell 0.46% as the Reserve Bank of Australia released minutes from its June monetary policy meeting, where board members discussed raising interest rates. Elsewhere, Hong Kong’s Hang Seng index rose 0.57%, while mainland China’s CSI 300 was unchanged.
(PRO) Rise of the humanoid
Morgan Stanley expects a significant increase in humanoid robots, reaching 8 million in 2040. Tesla CEO Elon Musk shares this optimism, projecting that the company’s Optimus robot can eventually propel the automaker’s value to $25 trillion. Here are some companies Morgan Stanley says will benefit from this boom.
Bottom line
The market does not like surprises. As France’s far-right National Rally and its allies won more than a third of the vote in the snap election, President Emmanuel Macron’s left-wing and centrist New Popular Front alliance began horse-trading to ensure that Marine Le Pen did not have it. rule the majority. French markets staged a relief rally on the prospect of a hung parliament.
La Banque Postale Asset Management’s Sebastian Paris Horvitz said the result was the “worst” option for the market.
That’s a sentiment that translates across the Atlantic, where President Joe Biden’s debate performance has fueled concern and uncertainty over the Democratic nomination. Stephanie Link, CIO at Hightower, told CNBC that more than the presidency, what matters is the composition of Congress.
“If congress splits, that’s what the market likes because nothing gets done,” Link said. “That’s what the market wants. They don’t want surprises.”
A prime example of market disfavor is the case of Liz Truss, whose 44-day tenure as UK prime minister ended after markets reacted negatively to debt-financed tax cuts.
Despite the political uncertainty, many investors want to see the market build on the Nasdaq’s 18% and the S&P 500’s 14.5% gain in the first half. Historical trends indicate a positive outlook for the coming months.
The stock market has a history of performing well in July, with the Dow, S&P 500, and Nasdaq Composite showing consistent monthly gains in recent years. The last time this major index had a loss in July was back in 2014. Furthermore, July occasionally brings significant gains, such as in 2022 when the S&P 500 and Nasdaq jumped more than 9% and 12%.
“Nasdaq 20,000 is where we’re going eventually,” Dan Ives, director of equity research at Wedbush Securities, told CNBC. “Tech stocks are up another 15% because even though this has been led by the godfather of AI Jensen (Huang) at Nvidia… Multiplier for every dollar spent on Nvidia chips, $8 to $10 flows through other technologies… In my opinion, hours 9 at the AI party until 4, and I think this tech bull market continues.
– CNBC’s Brian Evans, Samantha Subin, Yun Li, Fred Imbert, Alex Harring, Jenni Reid, Sophie Kiderlin, Tanaya Macheel, Spencer Kimball, Leslie Josephs, Alex Sherman, Lim Hui Jie and Dylan Butts contributed to this report.
