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  • 📡 DirecTV scoops up Dish for $1

📡 DirecTV scoops up Dish for $1

+ Powell Signals Rate Cuts Ahead, But “No Hurry”

September 30, 2024

Good afternoon! SpaceX launched a Falcon rocket on Saturday, sending two astronauts to the ISS to deliver a Dragon capsule that will bring back NASA’s Butch Wilmore and Suni Williams, who’ve been stranded in space for nearly four months after their Boeing Starliner malfunctioned. They’re set to return to Earth by February.

Nick Hague and Russian cosmonaut Alexander Gorbunov are on board, with two empty seats reserved for Wilmore and Williams. Once Hague and Gorbunov dock, four other astronauts will return after their own month-long delay caused by Starliner’s issues.

MARKETS

*Stock data as of market close*

  • US stocks wrapped up the month and quarter with fresh records after Fed Chair Jerome Powell assured investors he’s got the economy’s back—but don’t expect him to rush those rate cuts. The S&P 500 climbed 0.4% to a new high, while the Nasdaq gained 0.38%, and the Dow barely edged up but still managed a record close.

  • Markets were a bit wobbly after Powell’s remarks, but stocks rallied into the close. Powell hinted at more rate cuts down the road but made it clear he’s not on a set schedule. Despite his cautious tone, the S&P 500 capped off the quarter with a hefty $2.5 trillion rally.

STOCKS
Winners & Losers

What’s up 📈

  • Futu Holdings ($FUTU) surged 11.64% as China stocks rallied on Monday to their best day in 16 years, fueled by recent economic stimulus that sparked investor optimism. U.S.-listed China-related stocks and ETFs followed suit.

  • CVS Health ($CVS) increased 2.44% after news broke that hedge fund Glenview Capital plans to meet with CVS executives to help revamp the struggling business. Glenview Capital has also established a sizable position in the company, according to sources.

  • Nio Inc ($NIO) climbed 2.45% after the Chinese EV maker announced a 13.3 billion yuan cash injection into its Nio China business, which will reduce its ownership in the unit from 92.1% to 88.3%.

  • Icahn Enterprises ($IEP) ticked up 3.13%.

  • Hims & Hers Health ($HIMS) rose 3.66%.

What’s down 📉

  • Stellantis ($STLA) plummeted 12.52% after warning that its second-half sales would fall short of expectations. The grim forecast also impacted other automakers, with Aston Martin Lagonda Global Holdings ($ARGGY) plunging 21.43%, Ford ($F) slipping 2.04%, and General Motors ($GM) declining 3.53%.

  • EchoStar Corporation ($SATS) dropped 11.48% following the news that DirecTV agreed to acquire EchoStar’s satellite television business, which includes Dish TV, ending decades of intermittent talks between the two distributors.

  • Coinbase ($COIN) slid 6.83% as stocks tied to bitcoin retreated after the cryptocurrency fell by 3%, trading below $64,000. MicroStrategy ($MSTR) also dropped 4%.

  • Micron Technology ($MU) fell 3.53%.

  • Ulta Beauty ($ULTA) declined 3.69%.

TELECOM/MEDIA
DirecTV scoops up Dish for $1

After two decades of on-again, off-again talks, DirecTV and Dish are finally tying the knot. DirecTV will scoop up Dish for a jaw-dropping $1 (yep, that’s not a typo) and inherit a not-so-sweet $9.75 billion in debt. Why the big move? They’re hoping a combined front will help them survive the ruthless streaming wars.

Streaming giants like Netflix and Amazon have slashed into satellite TV’s customer base, leaving DirecTV and Dish clinging to shrinking market share. Together, the companies have lost over 60% of their subscribers since 2016.

AT&T Waves Goodbye
AT&T, once DirecTV’s proud parent, is making a clean break. The telecom giant is offloading its remaining 70% stake in DirecTV to private equity firm TPG for a cool $7.6 billion, officially kissing the media world goodbye. Remember, this is the same company that spent a whopping $48.5 billion to buy DirecTV back in 2015. Oh, how times change.

For AT&T, this deal is part of its grand strategy to refocus on cellphones and broadband, leaving the Hollywood dreams behind. Shareholders are crossing their fingers for a bigger dividend payout from that fresh cash infusion.

Debt, Bondholders, and Red Tape, Oh My!
Not so fast—this deal isn’t set in stone yet. Dish’s bondholders will have to agree to write off $1.57 billion of debt, and the whole operation still needs the green light from regulators. But with streaming services gobbling up the market, industry insiders are hopeful the merger will slide through without too much fuss.

If it all goes according to plan, the merger could give the new mega-company more muscle to negotiate with content creators like Disney and Warner Bros. A little bargaining power never hurt anyone.

The Endgame
The new DirecTV-Dish combo will boast around 18 million subscribers, making it the biggest pay-TV provider in the U.S. But let’s be real—that’s still a sinking ship. Cord-cutting isn’t slowing down, and satellite TV feels a bit... 2005.

Still, by teaming up, the two hope they can scrape by with fewer costs and a stronger negotiating hand. Survival of the fittest, right?

The question remains: Can a revamped satellite service stay relevant in a world where everyone’s streaming? Only time—and your Netflix subscription—will tell.

NEWS
Market Movements

ECONOMY
Powell Signals Rate Cuts Ahead, But “No Hurry”

Federal Reserve Chair Jerome Powell isn’t in a rush to cut rates. While the Fed plans to lower interest rates "over time," Powell emphasized that decisions will be made cautiously and based on incoming data. Speaking at the National Association for Business Economics, he reiterated that the economy is holding strong, but rate cuts will be gradual.

The Fed’s strategy? Slow and steady wins the race, with no fixed game plan.

Inflation: Job’s Not Finished Yet
Powell reminded everyone that while inflation has eased, tapping into his inner Kobe, the job isn’t finished. The Fed’s preferred inflation measure rose 2.2% over the past year, which is a good sign, but not quite where they want it. Powell's taking a measured approach, determined not to let inflation make a comeback.

The bottom line: they’ll keep fighting inflation until it’s fully under control.

Labor Market: Cooling Off, but Still Strong
On the employment front, the labor market remains solid but has cooled compared to last year. Powell noted that job conditions don’t need to weaken further to reach inflation goals, which is good news for anyone fearing a spike in unemployment.

Economists predict 150,000 new jobs were added in September—slower growth, but still steady.

Looking Ahead
Powell hinted at two more quarter-point rate cuts this year, but the Fed is keeping its options open. If the economy performs better or worse than expected, those plans could change. Flexibility is the name of the game.

The Fed’s ultimate goal? A soft landing where inflation falls, and the economy keeps chugging along—without any sharp jolts. Powell’s in no rush, but he’s keeping his eyes on the prize.

Calendar
On The Horizon

Tomorrow

This week is all about labor market data, kicking off tomorrow with the Job Openings and Labor Turnover Survey (JOLTS). This report covers the essentials: how many jobs are open, how many people are getting hired, and how many are calling it quits.

The numbers will give the Fed some ammo for its next rate cut decision. Last month, we saw 7.7 million job openings, a slight dip from July, with hiring and quitting basically flat. Economists are predicting another small drop to 7.64 million—if it drops more, get ready for chatter about a labor market slowdown.

But that’s not all. We’re also getting US PMI, ISM Manufacturing, and Construction Spending reports tomorrow, offering a broader look at how the economy’s holding up.

Before Market Open:

  • McCormick & Company ($MKC) might not be the hottest stock around, but it’s as steady as they come. The spice giant dominates the seasoning world, but investors should keep an eye on its profitability. Despite ruling the spice aisle, McCormick has a surprisingly hard time turning that market power into serious cash. Consensus? $0.67 EPS and $1.67 billion in revenue.

After Market Close:

  • Nike ($NKE) has been stumbling lately. A tough Bloomberg piece recently put CEO John Donahoe in the hot seat, and now he’s out, replaced by Elliott Hill—who, by the way, has a pretty killer LinkedIn resume. Hill’s got a lot on his plate, though, and investors will be looking for his game plan to turn Nike’s fortunes around. Expectations: $0.52 EPS and $11.65 billion in revenue.

NEWS
The Daily Rundown

RESOURCES
The Federal Reserve Resource

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