BY THE NUMBERS
U.S. stock futures fell Monday after Friday's strong rally. However, Friday's gains of more than 1% for the Dow and S&P 500 and over 2% for the Nasdaq were not enough to make up for sharp declines earlier last week. The Dow and S&P 500 saw weekly declines more than 1% each, while the Nasdaq sank over 2% in its worst weekly performances since February. (CNBC)
The roller-coaster ride on inflation worries hit stocks early last week, with the Dow dropping 3.4%, the S&P 500 falling 4% and the Nasdaq plunging 5%. All three stock benchmarks made up some of those losses Thursday and Friday. (CNBC)
Bond yields were mostly lower Monday after the 10-year Treasury yield jumped to over 1.7% on Wednesday during the worst of last week's stock selling. Inflation fears and whether the Federal Reserve will be able hold the line as promised on near 0% interest rates and massive asset purchases rattled markets. (CNBC)
IN THE NEWS TODAY
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AT&T (T) on Monday announced a deal to combine its WarnerMedia movie and media content unit with Discovery (DISCA) paving the way for one of Hollywood's biggest power players to better compete with streaming media giants like Netflix and Disney. Shares of AT&T gained about 2% and Discovery soared roughly 10%. (CNBC)
AT&T shareholders would own 71% of the new company. Discovery shareholders would own 29%. The transaction would put together such properties as WarnerMedia's CNN, HBO and Warner Bros., and Discovery's HGTV, TLC and History channel. In 2018, AT&T acquired Time Warner, since renamed to WarnerMedia, for $85 billion in equity value.
Tesla (TSLA) CEO Elon Musk clarified in a tweet early Monday that the electric vehicle maker has "not sold any bitcoin." Bitcoin on Monday saw a partial recovery, trading above $45,000 per unit. The price of the world's biggest cryptocurrency fell below that level Sunday after Musk seemingly implied in a Twitter exchange that Tesla sold or may sell the rest of its bitcoin holdings. (CNBC)
MicroStrategy (MSTR). tumbled 7% in premarket action amid a slide in the price of bitcoin to the lowest level in more than three months. The business analytics company holds roughly $5 billion worth of bitcoin. The cryptocurrency's volatility is also impacting shares of Coinbase (COIN), the largest U.S. cryptocurrency exchange, which fell 3.5%.
Apple (AAPL) gets its turn this week to mount a courtroom defense against Epic Games' antitrust claims, preparing to bring in its most powerful spokesman: Tim Cook. Apple's CEO is set to testify in a trial that, regardless of the verdict, could prove to be one of the most consequential for the iPhone maker. (WSJ)
CDC Director Dr. Rochelle Walensky called for people to be honest and ditch their Covid masks only if they are fully vaccinated. The sudden change in CDC guidance last week left some people confused as it does not lift local mask ordinances. Local governments and businesses are grappling with whether to follow the CDC's new guidance. (CNBC)
Starbucks (SBUX) said, "Facial coverings will be optional for vaccinated customers beginning Monday, May 17, unless local regulations require them by law." Walmart (WMT) and Costco (COST) led the way Friday. Target (TGT) joined as well. (CNBC)
Sanofi (SNY) and GlaxoSmithKline (GSK) said their experimental Covid vaccine showed strong results in an early-stage study, with 95% to 100% efficacy. The drug companies plan to begin a phase 3 trial within a few weeks. (Reuters)
STOCKS TO WATCH
Hostess Brands (TWNK): The maker of Twinkies and other snacks reported quarterly profit of 20 cents per share, a penny a share above estimates. Revenue also topped Wall Street forecasts. Hostess said it continues to see elevated at-home consumption of its snacks, as well as increased "on-the-go" sales.
ViacomCBS (VIAC): ViacomCBS resolved a dispute with former CEO Les Moonves, and will keep the $120 million in severance it had withheld after Moonves resigned amid accusations of sexual harassment which he has denied. Viacom shares rallied 3.8% in premarket trading.
At Home Group (HOME): At Home Group's largest shareholder said it will oppose the deal to sell the home furnishings retailer to private-equity firm Hellman & Friedman for $2.4 billion. CAS Investment Partners, which owns about 17% of At Home Group, made its objections in a letter to the company's board of directors that was seen by The Wall Street Journal. CAS feels the bid "grossly undervalues" the company.
Marathon Petroleum (MPC): Top Federal Trade Commission officials say Marathon Petroleum's sale of Speedway gas stations to the parent of the 7-11 chain may be illegal on competitive grounds. The $21 billion deal closed on Friday, but the officials say they will continue to investigate. Separately, Marathon announced a modified Dutch auction tender offer for up to $4 billion of its common shares.
Texas Roadhouse (TXRH): The restaurant chain's shares rose 1.4% in the premarket after Deutsche Bank upgraded the stock to "buy" from "hold." Deutsche Bank said recent trends point to the possibility that current revenue assumptions may be conservative, and it also points to the recent pullback in the stock's price.
Blackstone (BX): Blackstone's improved $6.5 billion bid for Crown Resorts was rejected by the Australian casino operator, which said the bid undervalued the company and was not in the best interests of shareholders.
Cummins (CMI): The maker of engines and other power solutions saw its stock rise 1.4% in the premarket after Bank of America Securities upgraded it to "buy" from "neutral," saying it sees continued outperformance ahead amid an upbeat market for farm machinery and equipment rental.