Stock Market Futures On The Decline Following Last Week’s Rally
U.S. stock futures are in the red in early morning trading today. With the start of a new trading week, investors appear to be responding to last week’s broad-based rebound in stocks. In the larger scheme of things, this would be understandable. Sure, stocks did recover from recent lows amid the ongoing situation in Eastern Europe. Besides, the Federal Reserve has also announced an interest rate hike in line with expectations.
Looking towards the week ahead, there is more economic data on tap to digest as well. In particular, a report from the University of Michigan on consumer sentiment is set for release on Friday. Ideally, Friday’s report will provide further insight into consumer spending trends as inflation continues to rise. As it stands, the Surveys of Consumers index is currently estimated to come in at 59.7. This would be its lowest level since 2011. Furthermore, it would also be in line with February’s consumer data suggesting that U.S. retail sales growth is slowing. Between the rising costs of items and gas, this is not all too surprising. Nevertheless, it seems like there will be plenty of data points keeping investors on their toes this week. As of 6:48 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading lower by 0.41%, 0.23%, and 0.37% respectively.
General Motors Doubles Down On Self-Driving Tech Division With Almost $3.5 Billion Investment
General Motors (NYSE: GM) could be worth noting at this week’s stock market opening. Overall, this would be thanks to the latest coming from the automotive titan on the investments front. Namely, GM is investing an additional $3.45 billion towards its self-driving car subsidiary, Cruise. The current move by GM follows a complete divestment by Japan’s SoftBank Group’s Vision Fund. In general, the exit comes as SoftBank attempts to get a handle on its overall debt. As such, it would make sense that the conglomerate is looking to trim the higher-risk assets in its portfolio.
Naturally, following such news, investors may be wondering if Cruise can continue to grow in the long run. For some, GM doubling down on the sector could be indicative of potential progress down the line. In detail, GM is agreeing to pay $2.1 billion to buy SoftBank’s stake in Cruise. On top of that, it is also adding $1.35 billion towards funding development. All in all, GM now holds an overwhelming 80% stake in Cruise. Among other notable shareholders are Microsoft (NASDAQ: MSFT) and Walmart (NYSE: WMT), and Honda (NYSE: HMC).
At the same time, Cruise is still waiting for regulatory approval to charge riders for driverless rides in San Francisco. Also, the company is set to begin production of its first electric vehicle (EV) model, the Cadillac Lyriq this week. With GM seemingly firing on all cylinders now, I could see investors eyeing GM stock now.
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Nike Earnings On Tap After Today’s Closing Bell: What To Know
In other news, consumer sports retailer Nike (NYSE: NKE) is set to report its third fiscal quarter earnings after today’s closing bell. Later today, consensus estimates see Nike posting an earnings per share of $0.72 alongside revenue of $10.62 billion. This upcoming quarterly release would likely be closely watched as Nike continues to face supply chain pressure across the board. On one hand, you have growing coronavirus cases in China impacting overall economic recovery in the region. On the other hand, Nike is also halting its operations in Russia as well.
Despite all of this, analysts over at investment banking firm Stifel (NYSE: SF) seem to remain bullish. In particular, Stifel analyst Jim Duffy argues that these headwinds could be offset by Nike’s direct-to-consumer (DTC) digital channels. The likes of which have been and continue to improve as the company terminates wholesale partnerships with other retailers. In doing so, Nike would be working to consolidate distribution within its own channels. Additionally, Duffy also highlights the company’s sales growth in the North America, Europe, and the Middle East and Africa regions as positive factors to consider. As a result of all this, the firm currently has NKE stock at a Buy rating. Regardless of how Nike performs, NKE stock will likely be in focus in the stock market today.
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Private Equity Firm Thoma Bravo To Acquire Anaplan For $10.7 Billion
On the acquisition front, we have Anaplan (NYSE: PLAN) making headlines today. Over the weekend, news broke of private equity firm Thoma Bravo agreeing to buy Anaplan for $10.7 billion. Going into the details, Thoma Bravo is paying $66 per share for Anaplan. Following the all-cash deal, Anaplan CEO Frank Calderoni will continue to head the company. Because of all this, PLAN stock will likely be gaining attention at this week’s stock market open.
For some context, Anaplan essentially creates cloud-based software that helps organizations plan for and forecasts business outcomes in the long run. Not to mention, the company also boasts an extensive list of high-profile clients. Part of its clientele are firms such as Coca-Cola (NYSE: KO), Shell (NYSE: SHEL), and VMware (NYSE: VMW). The overall scale of this purchase is understandable after considering the growing demand for planning software amidst the uncertainties during the pandemic.
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Nielsen Focuses On Share Repurchase Plans After Rejecting Takeover Offer
Another piece of news regarding acquisition offers today would be from Nielsen (NYSE: NLSN). Diving in, the information, data, and market measurement firm is rejecting a takeover offer from a private equity consortium. According to Nielsen, the current offer significantly undervalues that company at $25.40 per share. The company notes that its board “unanimously determined that the consortium’s offer significantly undervalues the company and does not adequately compensate shareholders for Nielsen’s growth prospects.”
Sharing the board’s opinions on this is WindAcre, one of Nielsen’s largest shareholders. According to Snehal Amin, Managing Partner of WindAcre, the firm does not “believe the offer comes close to recognizing Nielsen’s intrinsic value.” Amin also adds that WindAcre was already intending to block the transaction to “realize, in time, the intrinsic value,” of its investments in Nielsen.
This follows reports from last week suggesting that Elliott Management and Brookfield Asset Management (NYSE: BAM) were in advanced talks with Nielsen. According to the previous report, the consortium was planning for a $15 billion takeover, including debt. Moreover, alongside the offer rejection, Nielsen is planning to begin its $1 billion share buyback authorization later next month. With all this buzz around the company now, investors may want to keep an eye on NLSN stock this week.
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