MARKET MOVERS
- Amazon to acquire the maker of Roomba vacuums for roughly $1.7 billion. The company is acquiring iRobot for $61 a share, an all-cash deal that values the Roomba maker at $1.7 billion, the company announced Friday. The deal will deepen Amazon’s presence in consumer robotics. Amazon is buying iRobot at a time when the robot maker is facing broad headwinds.
- The latest jobs report doesn’t support the stock market’s bullish narrative. July jobs came in at 528,000, far above the 258,000 that was expected. Wage growth was up 0.5% month-over-month, 5.2% year over year, also above expectations. Bulls wanted slower job growth to keep pressure on the Fed to slow rate hikes. Bulls also wanted lower wage growth to show inflation was peaking. Neither is happening.
- U.S. 10-year Treasury yield jumps to 2.79% after jobs growth blows past expectations. Friday’s move marks a reversal from the recent trend, which saw the 10-year yield trending lower on fears the Fed’s hiking campaign was tipping the economy into a recession. Earlier this week, the 10-year yield fell to 2.50% and its lowest since April, according to FactSet. Read more here.
- Meta’s first-ever corporate bond deal sees $30 billion in demand. The company saw roughly $30 billion in demand for its debut $10 billion, four-part U.S. corporate bond deal. That’s a big deal. While Meta reported its first-ever drop in revenue in the second quarter, investment bankers still were able to pull in price talk on each class of A1- to AA-rated bonds from the social-media giant.
- U.S. trade deficit narrows as energy exports rise. The trade gap in goods and services shrank 6.2% in June to $79.6 billion after seasonal adjustment, the Commerce Department said Thursday, down from May’s revised deficit of $84.9 billion. The trade deficit narrowed as a rise in shipments of energy products pushed up exports, while cooling consumer appetite weighed on imports.
Read more here.
- Tesla shareholders approve a 3-for-1 stock split. The split is aimed at attracting an even larger number of retail investors, who have been piling into the stock -- will bring Tesla’s shares down to the $300 range. The Austin, Texas based-company in a regulatory filing on Friday said each stockholder of record on Aug. 17 will get a dividend of two additional shares for each stock held.
WHAT TO WATCH
- Elon Musk suggests big Tesla factory expansion plans. The Tesla CEO said that the electric-vehicle maker is likely to need roughly a dozen factories to reach its goal of selling 20 million vehicles annually by 2030. An announcement about Tesla’s next factory location could come later this year, he said at the auto makers’ annual shareholder meeting, held at its Austin, Texas-area factory.
- Warner Bros. Discovery will combine HBO Max and Discovery+. There will be fewer streaming services. The plan is to eventually merge Warner Bros. Discovery’s two flagship streaming platforms, HBO Max and Discovery+, into one product set to launch next summer. According to CEO David Zaslav, the company will also offer a free, ad-supported product similar to those offered by competitors. Read more here.
- Housing is not a bubble waiting to pop. There was no subprime debt orgy this time around. It sure feels like a bubble when you consider the rise in prices since the summer of 2020. But the majority of home purchases in that time have gone to credit-worthy borrowers who now have an equity cushion in their homes. Prices could definitely fall and they probably should. But this doesn’t mean the housing market is a giant bubble waiting to be popped. Read more here.
