📈 Angi's $500B Spinoff Secret

Good morning.

⚡ The Fast Five → China considers selling U.S. TikTok to Elon, Pfizer goes all-in on obesity drugs, Cleveland-Cliffs mulls new offer for U.S. Steel, Microsoft CEO forms new AI group, IAC set to spinoff Angi

🔎 Market Trends → Nasdaq closes lower, S&P 500 up slightly as US yields stay elevated; US Futures Edge Higher Ahead of Key Inflation Data

And now…

⏱️ Your 5-minute briefing for Tuesday, January 14, 2025:

MARKET BRIEF
Before the Open

Pre-Market

Fear & Greed

Markets in Review

Markets Mixed as Investors Eye Inflation Data and Bank Earnings

The Dow rose 0.9% to 42,297.1, and the S&P 500 edged up 0.2% to 5,836.2, while the Nasdaq slipped 0.4% to 19,088.1. Energy and materials led sector gains, while utilities lagged.

The Big Picture:

Markets moved cautiously Monday, with traders bracing for key inflation data and bank earnings later this week. The producer price index is due Tuesday, followed by consumer inflation data Wednesday, offering critical insights into the Fed's next steps on monetary policy.

The Federal Reserve Bank of New York’s survey showed steady one-year inflation expectations at 3%, with mixed signals at longer horizons. Meanwhile, energy markets rallied as US sanctions on Russian oil tightened supply dynamics, pushing WTI crude oil up 2.8% to $78.73/barrel.

The 10-year yield rose to 4.79%, reflecting market anticipation of steady but controlled inflation pressures.

Market Movers:

• JPMorgan Chase (JPM): Gained +1.8%, ahead of quarterly earnings this week, reflecting investor optimism around robust bank profitability amid higher rates.

• Johnson & Johnson (JNJ): Rose +1.7%, among the Dow’s top performers, after announcing a $14.6 billion acquisition of Intra-Cellular Therapies (ITCI), which surged +34% on the deal.

• Moderna (MRNA): Tumbled -17%, the S&P 500’s worst performer, after lowering its full-year revenue outlook, weighing on investor sentiment.

What They’re Saying:

"This week’s inflation data will set the tone for the Fed’s early 2025 strategy, but corporate earnings, especially from major banks, will provide the clearest picture of economic momentum," noted D.A. Davidson.

WHAT WE’RE WATCHING
Events

• Today: Bureau of Labor Statistics - Core Finished Goods PPI (Producer Price Index) - 8:30am

• Why You Should Care: It’s a leading indicator of inflation – when producers charge more for goods and services, these higher costs are often passed on to consumers.

• Today: Bureau of Labor Statistics - Wholesale Prices - 8:30am

• Why You Should Care: It's a leading indicator of consumer inflation - when producers charge more for goods and services the higher costs are usually passed on to the consumer.

Earnings Reports

• Today: Calavo Growers, Rocky Mountain Chocolate Factory, Applied Digital, Park Aerospace, VOXX International

• Tomorrow: J.P. Morgan Chase, Wells Fargo, Citigroup, BlackRock, Schwab, Rio Tinto, Bank of New York Mellon

MARKET BRIEF
Leading News

IAC's Latest Spinoff Play: Why Angi's Independence Could Unlock Hidden Value

Why it matters:

IAC's decision to unleash Angi (ANGI) as an independent entity signals a strategic pivot that could release trapped value in both companies—a classic "sum-of-the-parts" arbitrage opportunity that savvy investors have been eyeing.

Zoom Out:

Barry Diller's corporate incubator extraordinaire is at it again, following its time-tested playbook of nurturing digital businesses before setting them free. Previous success stories include Match Group (MTCH) and Expedia (EXPE), which have delivered compound annual returns of 27% and 16% respectively since their spinoffs.

The home improvement marketplace's liberation comes at an intriguing inflection point: While Angi's recent 16% revenue decline might spook some investors, this temporary setback could actually set the stage for a leaner, more focused growth trajectory.

Key Insights:

• The "Diller Premium" remains intact: IAC's track record of spinning off winners (think Ticketmaster, LendingTree) suggests there's method to this apparent madness. The company's spinoff alumni have historically outperformed the S&P 500 by an average of 12% in their first year of independence.

• Simplified capital structure = enhanced agility: The move to a one-share-one-vote structure eliminates the dual-class overhang, potentially making Angi more attractive to institutional investors and setting up the possibility of M&A activity in the fragmented home services space.

Market Pulse:

"This isn't just another corporate divorce—it's more like sending a fully grown child to college with a trust fund," says veteran tech analyst Sarah Chen. "Both parties stand to benefit from the separation."

Bull’s Take:

With IAC trading at a steep 40% discount to its net asset value, this spinoff could be the catalyst that finally closes that gap. For patient investors willing to weather some near-term volatility, both IAC and Angi offer compelling entry points into the digital transformation of the $500 billion home services market.

Headlines

• China considers selling TikTok U.S. operations to Musk (link)

• SEC charges Robinhood with securities violations, brokerage to pay $45 million penalty (link)

• Pfizer Going 'All In' on Obesity Drug Development, CEO Bourla Says (link)

• Cleveland-Cliffs and Nucor Mull Fresh Bid for U.S. Steel (link)

• Bayer to Scale Back Health Dealmaking Amid Push to Pay Down Debt (link)

• Microsoft CEO Nadella forms new AI group to build and run apps for customers (link)

CRYPTO
Fear & Greed

Headlines

• MoonPay acquires Helio for $175M to expand crypto payments infrastructure (link)

• U.S. Judges Demand SEC 'Explain Itself' for Rebuffing Requests for Crypto Rules (link)

• MicroStrategy Added 2,530 Bitcoin for $243M, Bringing Holdings to 450K BTC (link)

DAILY SHARE
On the Socials