MARKET MOVERS
- Netflix confirms partnership talks for an ad-supported service. Co-Chief Executive Ted Sarandos confirmed that the streaming company is speaking to multiple potential partners to help it enter the advertising business, telling an industry conference that it may build its own ad business in the future. Investors became more hopeful that the company is moving quickly toward offering the new service. Read more here.
- Facebook, Netflix, and PayPal are value stocks now. All three will jump into the Russell 1000 Value Index, and their weights in the Russell 1000 Growth Index will dwindle. Meta is the company with the most uncertainty right now regarding growth because it is putting all eggs in one basket even though the market believes that the metaverse is something that will take several years to fully be adopted by everybody. Source(5:08)
- U.S. investment-grade corporate bond funds and ETFs suffer the largest weekly outflows of the year. Investors withdrew billions out of U.S. investment-grade corporate bonds and related ETFs over the past week as the Federal Reserve’s aggressive rate hikes plans feed fears of an economic downturn. U.S. high-grade funds and ETFs saw the biggest weekly outflows of $8.9 billion from a $6.56 billion outflow a week earlier.
- Consumer sentiment at a record low is another ominous sign for the economy. The University of Michigan’s gauge of consumer sentiment reached a final reading of 50 in June. That was the lowest reading on record going back to 1952, and down from May’s 58.4 reading. A souring mood for consumers is a concerning sign because household spending accounts for about 70% of U.S. economic output.
- Federal appeals court puts FDA’s ban on Juul’s e-cigarettes on hold. A panel of judges from the U.S. Court of Appeals for the D.C. Circuit on Friday afternoon granted Juul’s request to delay the FDA’s ban, according to court documents. The temporary stay gives the court time to hear arguments and wasn’t a ruling on the merits of the case, the judges wrote. Read more here.
- U.S. new home sales stronger in May. New home sales rose 10.7% to a seasonally-adjusted rate of 696,000 in May, from a sharply revised 629,000 in the prior month, the Commerce Department reported Friday. Despite the higher sales numbers, the housing sector is in the midst of a slowdown, with mortgage rates soaring past 5.8% for a 30-year fixed-rate mortgage. Inventory remains tight with the number of homes on the market.
WHAT TO WATCH
- Miner capitulation means Bitcoin's bottom is near, according to CryptoQuant. A major “capitulation event” in which Bitcoin miners funnel thousands of tokens to exchanges could signal an approaching bottom. Bitcoin miners are turning sellers after seeing the price more than halve in 2022. This past month, miners moved 23,000 Bitcoin to exchanges, representing the highest monthly flow since May 2021.
- Most funds will turn into zombie funds. What you've seen is a bunch of people assimilating into these negative habits um that were propagated by all of this money that was poured into our ecosystem recently. And that has just become a death spiral for a lot of people. Most of these 10, 15, and 20 million dollar funds that were given to a first-time manager with some tangential relation to technology will turn these funds into zombie funds. Source(18:07)
- Frontier Airlines sweetens its offer for Spirit merger as shareholder vote looms. The new offer for $4.13 per share, $2 per share higher than Frontier’s original cash-and-stock bid, comes after JetBlue Airways repeatedly upped its own offer to buy Spirit outright in an all-cash deal. A Frontier-Spirit combination would create a discount carrier behemoth and the country’s fifth-largest airline. Read more here.
- Cadillac plans to price its future Celestiq EV at around $300,000. GM is set to reveal later this summer a prototype of the car. The company has said the sedan will be Cadillac’s premier offering and custom-built at its engineering center near Detroit. The automaker intends to build fewer than 500 Celestiqs annually as a way to showcase its technology and generate buzz for Cadillac. Read more here.
