Stock Market Futures Rise As Stocks Look To Recoup Yesterday’s Losses
U.S. stock futures are trading higher early on Tuesday this week. This comes at a time when investors are likely considering their options. After all, the stock market is coming off a rather volatile time. This is apparent as markets attempt to stabilize after a broad-based rally last week. The likes of which saw the S&P 500 have its second-best week of 2022 and its first weekly gains since late May 2022. Despite the current decline in stocks, J.P Morgan (NYSE: JPM) chief global markets strategist Marko Kolanovic appears positive.
In detail, he argues that U.S. equities could gain by as much as 7% this week. According to Kolanovic, this would, in theory, be thanks to investors looking to rebalance their portfolios following a vicious first half of 2022. The strategist also adds, “On top of that, the market is in an oversold condition, cash balances are at record levels, and recent market shorting activity reached levels not seen since 2008.” Nevertheless, Kolanovic does admit, “rebalances are not the only drivers and the estimated move is assuming ‘all else equal.” While all this is happening, there remains plenty of notable stock market news to consider today as well. As of 4:55 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading higher by 0.60%, 0.53%, and 0.57% respectively.
Nike In Focus After Topping Earnings Estimates And Authorizing $18 Billion Stock Repurchase Plan
Nike (NYSE: NKE) is among the major names to take note of in the stock market today. For the most part, this is likely the result of the company’s latest quarterly financial update. In it, the sports apparel retail titan posted solid figures across the board. According to the press release, Nike’s total earnings per share for the quarter is $0.90. Also, the company’s total quarterly revenue is $12.23 billion. For reference, this is versus consensus Wall Street figures of $0.81 and $12.06 billion. With the company topping estimates in an especially challenging business environment, NKE stock would be in the spotlight now.
In fact, Nike does highlight that its direct-to-consumer (D2C) business continues to hold strong and is growing. For the quarter, the company’s D2C revenue is up by 7% year-over-year. It seems that even with concerns of sales deterioration in China, Nike remains hard at work. Commenting on this in further detail is Nike CFO, Matt Friend. He starts by saying, “In this dynamic environment, NIKE’s unrivaled strengths continue to fuel our momentum.” Friend continues, “Two years into executing our Consumer Direct Acceleration, we are better positioned than ever to drive long-term growth while serving consumers directly at scale.”
On top of all this, Nike’s board of directors is also authorizing a sizable share buyback plan. Over the next four years, the company now has an $18 billion stock repurchase program in place. This, the Nike board notes, will replace its existing $15 billion share repurchase plans that are ending in its current fiscal year. Sure, NKE stock may be losing steam alongside the broader market now. However, with results like this, long-term investors could be eyeing the company’s shares this week.
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Spirit Airlines Gains Altitude After JetBlue Raises Takeover Offer And Reverse Breakup Fee
In other news, it appears that Spirit Airlines (NYSE: SAVE) continues to make headlines. This comes as JetBlue (NASDAQ: JBLU) updates its ongoing takeover offer for the low-cost airline operator. Following news of Spirit shareholders receiving a recommendation to vote for Frontier’s (NASDAQ: ULCC) offering, JetBlue is once again raising its takeover offer. To begin with, JetBlue is raising its reverse breakup fee to $400 million. Simply put, if a deal with JetBlue falls through for antitrust reasons, this amount will be payable to Spirit. Additionally, a ticking fee will give shareholders a monthly prepayment of $0.10 per share between January 2023 and the consummation or termination of the deal.
According to JetBlue, all this adds up to an aggregated ticking fee of up to $1.80 per share. This would be with the first $1.15 per share offsetting the reverse breakup fee or the merger consideration. Providing an overview on this is JetBlue CEO, Robin Hayes. He argues, “Spirit shareholders should not be misled by Spirit and Frontier’s rosy projections of a potential future stock price, which are based on highly flawed assumptions that fail to account for the actual market conditions, including the need for pilot pay increases and elevated fuel costs.” With things seemingly heating up in the battle to acquire Spirit, SAVE stock will likely remain in focus.
Robinhood Sees Turbulence Following Bloomberg Report Of Potential FTX Takeover
At the same time, the likes of Robinhood (NASDAQ: HOOD) is also among the head turners in the stock market now. On the whole, HOOD stock seems to be experiencing some volatility as it soared by as much as 14% during intraday trading yesterday. In turn, the company’s shares are now trading lower ahead of the opening bell today. The current movement in HOOD stock likely stems from a recent Bloomberg report regarding the trading app operator possibly being acquired. According to Bloomberg’s sources, the crypto exchange FTX is planning to acquire Robinhood.
All in all, such news would explain a sharp rise in the value of HOOD stock yesterday. Nevertheless, Sam Bankman-Fried, the CEO of FTX did deny the report later in the day. Despite doing so, he provides some interesting commentary regarding FTX’s view on Robinhood. In his words, “We are excited about Robinhood’s business prospects and potential ways we could partner with them, and I have always been impressed by the business that Vlad and his team have built.” Not to mention, all of this comes just over a month after Bankman-Fried personally took a 7.6% stake in the firm. The question now is whether the focus on HOOD stock will persist today.
Berkshire Hathaway Bolsters Occidental Petroleum Stake Further By $44 Million
Shares of Occidental Petroleum (NYSE: OXY) are also making waves in the stock market today. Overall, this is thanks to Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) making yet another investment in the oil firm. As of earlier today, Berkshire revealed a $44 million transaction to buy 794,000 shares of Occidental. To put things into perspective, this brings Berkshire’s total stake in the firm to about 16.4%. The likes of which add up to 153.5 million shares of OXY stock and are currently worth about $9 billion.
In the larger scheme of things, the Oracle of Omaha appears to be taking a liking to Occidental. Throughout a series of investments, the investors’ company has paid, on average, about $53 per share. This estimate is based on Berkshire’s fillings since March. In essence, this latest purchase further solidifies the firm’s position as the largest stakeholder in Occidental. Investment firm Vanguard is the second-largest investor, holding an almost 11% stake. While Buffett focuses on OXY stock amidst the current market turbulence, investors could be keen to follow suit.