Oct 7, 2021 7:51AM EDT
Stock Market Futures Edged Higher On Possible Debt Limit Extension
Stock market futures are ticking higher in early morning trading on Thursday as investors’ concerns about the debt ceiling deal eased. Senate Minority Leader Mitch McConnell offered a short-term suspension of the U.S. debt ceiling. This is to avert a national default and economic crisis. Adding optimism to the stock market this week is the stronger than expected ADP monthly employment report.
“We expect that Congress will attach a debt ceiling increase to the tax and spending provisions in a budget reconciliation package … As deadlines approach without a deal to lift the debt ceiling, rising risk aversion could spark more market volatility, but we believe the economic expansion ultimately will be the main influence on equity and bond prices through next year”- Paul Christopher, Head of global market strategy at Wells Fargo Investment Institute.
Ahead of the stock market today, investors will be looking at weekly initial jobless claims due 8.30 a.m. ET. As of 6:59 a.m. ET, the Dow, S&P 500, and Nasdaq futures are rising by 0.71%, 0.82%, and 1.04% respectively.
IAC/InterActive’s Dotdash To Acquire Meredith For $2.7 Billion
IAC/InterActiveCorp’s (NASDAQ: IAC) digital media unit, Dotdash, will acquire Meredith (NYSE: MDP) in an all-cash transaction for $42.18 a share. The $2.7 billion deal will combine the Barry Diller-controller IAC with Meredith, a magazine publisher with major titles under its belt. For starters, Meredith is the publisher of People, Better Homes & Gardens, Entertainment Weekly, just to name a few. Following this announcement, both IAC stock and MDP stock are surging in the after-hours on Wednesday.
Once the deal becomes final, the new company will operate as Dotdash Meredith. IAC also said that the new company would be one of the largest publishers in the United States. Following this acquisition, the company’s monthly online consumers will rise from approximately 100 million to 175 million.
“Nowhere else will you find such a premium portfolio of media assets under one roof,” Tom Harty, chairman and CEO of Meredith, said in a statement. “We are thrilled to join forces to accelerate Meredith’s digital future.“
Levi Strauss Topped Wall Street’s Earnings Estimates
Jeans specialist Levi Strauss (NYSE: LEVI) reported earnings that topped Wall Street’s expectations. This came as consumer demand picked up during the back-to-school season. Besides, consumers also looked to stock up on the latest denim trends. Investors were initially nervous heading into the earnings report. We saw that LEVI stock closed more than 5% lower during its intraday trading. That’s because many assimilate Nike’s (NYSE: NKE) outlook to Levi’s. Thankfully, Levi has fared well comparatively due to its diversified manufacturing.
“Our supply chain really is a source of competitive advantage … We can move products around with a lot of agility … We’ve been running the business against different scenarios for the last 18 months.”- Chip Bergh, Chief Executive Officer of Levi Strauss
From its most recent quarterly report, revenue came in 41% higher year-over-year to $1.5 billion. And that slightly topped estimates of $1.48 billion. Also, net income rose to $193 million from $27 million a year earlier. For the fourth quarter, Levi is expecting year-over-year revenue growth of approximately 20%. The company provided a cautious outlook amid the uncertainty of the health crisis. Considering all this, with Levi continuing to expand into new markets and push deeper into online channels, would you agree that LEVI stock is a long-term hold?
Source: TD Ameritrade TOS
Twitter (NYSE: TWTR) is selling its MoPub mobile advertising network to AppLovin (NASDAQ: APP), a game developer and ad-tech company, for $1.05 billion. According to AppLovin’s press release, 45,000 mobile apps use the MoPub network, which reaches 1.5 billion addressable users. AppLovin primarily makes its money through the sale of virtual items in video games, and marketing tools that other game developers use for app promotion.
“We are excited by the opportunity to grow the AppLovin platform and further enhance our publisher monetization tools through this strategic transaction … We welcome the MoPub team and together we will work diligently to combine the best of MoPub into the AppLovin software platform.”- Adam Foroughi, Chief Executive Officer of AppLovin.
The recent disposal of MoPub shows that the company is refocusing on what Twitter CFO Ned Segal described as a “massive” advertising opportunity. This would allow Twitter to emphasize developing its own owned and operated products instead. For instance, Twitter is exploring new revenue streams that tap into explosive growth in the creator economy with features like Super Follows and Ticketed Spaces. More importantly, the company’s fundamentals seem to be in great shape judging from its second-quarter report. With all that being said, is TWTR stock worth adding to your watchlist ahead of its third-quarter report at the end of this month?
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Bitcoin & Other Cryptocurrencies Continued To Push Higher
Cryptocurrencies were broadly higher on Thursday morning with Bitcoin topping $55,000 and hitting its highest level since mid-May. There are a few reasons why the bulls are back in the crypto space. For starters, Federal Reserve Chairman Jerome Powell confirmed that he has no intention to ban Bitcoin. What’s more, Powell also expressed interest in regulating stablecoins. This could pave the way forward for the crypto industry to legitimize themselves ahead of mainstream adoption.
Delano Saporu, founder of New Street Advisors, said that greater adoption for bitcoin should support a continued rebound. He added, “You’re looking at more institutions getting involved. We saw US Bank’s announcement that it is going to offer institutional custody services. We’re also seeing Bank of America implementing research on Bitcoin as well so I think there is still more room to run.”
In addition to this, Bitcoin also has a prominent new supporter. Dawn Fitzpatrick, CEO of Soros Fund Management, told Bloomberg that it owns “some coins… but not a lot”. Rumors said George Soros, who is famous for making big money on traditional currency investments, has been reading about Bitcoin for the past few months. Furthermore, Bitcoin could become a legal mode of payment in Brazil. Now, Brazil is preparing to vote on a cryptocurrency regulation bill. The bill is expected to be presented to the Plenary of the Chamber of Deputies within the next few days. Should the plan gain approval, this would likely serve as another major catalyst for the crypto space as a whole.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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