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📈 Capital One's $35B Discover Deal
Apple loses $250B market value, Hershey strikes $750M deal for popcorn brand, Stellantis to lay off 900 workers, Intel and TSMC sign JV deal, Capital One secures a win in bid for Discover
Evelio Silvera
April 04, 2025
Good morning.
⚡ The Fast Five → Apple loses $250B market value, Hershey strikes $750M deal for popcorn brand, Stellantis to lay off 900 workers, Intel and TSMC sign JV deal, Capital One secures a win in bid for Discover
🔎 Market Trends → After Trump tariffs, US stocks suffer worst day since 2020
And now…
⏱️ Your 5-minute briefing for Friday, April 4, 2025:
MARKET BRIEF
Before the Open
As of market close 04/03/2025.
Pre-Market
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Fear & Greed
Markets in Review
Tariffs Rattle Tech as Markets Plunge, but Bargain Hunters May Find Openings
U.S. stocks fell sharply Thursday amid rising trade tensions, with the Dow tumbling 4%, the S&P 500 sliding 4.8%, and the Nasdaq diving 6%. Treasury yields sank as investors fled to safer ground.
The Big Picture:
President Trump’s sweeping 10% reciprocal tariffs, taking effect Saturday, sent a chill through global markets. With tech, retail, and energy names under pressure, the selloff marked one of the biggest market declines of 2025.
Still, seasoned investors know: panic creates opportunity. Sharp pullbacks in quality names often precede strong recoveries—especially when fundamentals remain intact.
Gold and Treasuries caught a bid as traditional havens. But long-term investors may find better protection not in gold bars, but in discounted growth franchises with pricing power and durable moats.
Market Movers:
Nike (NKE) dropped 14.4%, the worst Dow performer, as China-facing consumer brands felt tariff heat.
Apple (AAPL) fell 9.3%, with investors worried about iPhone production cost inflation.
Lamb Weston (LW) popped 10% after posting strong volumes and reaffirming guidance, a rare bright spot on the S&P 500.
What They’re Saying:
“Fears of a global recession are loud, but long-term positioning in resilient sectors will matter more than near-term noise,” said D.A. Davidson in a note.
WHAT WE’RE WATCHING
Events
Today: Bureau of Labor Statistics - Average Hourly Earnings m/m - 8:30am
Why You Should Care: It's a leading indicator of consumer inflation - when businesses pay more for labor the higher costs are usually passed on to the consumer.
Today: Bureau of Labor Statistics - Unemployment Rate - 8:30am
Why You Should Care: Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.
Today: Bureau of Labor Statistics - Non-Farm Payrolls - 8:30am
Why You Should Care: Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy.
Today: Federal Reserve - Fed Chair Powell Speaks - 11:25am
Why You Should Care: As head of the central bank, which controls short term interest rates, he has more influence over the nation's currency value than any other person. Traders scrutinize his public engagements as they are often used to drop subtle clues regarding future monetary policy.
Earnings Reports
Today: Splash Beverage Group, Desktop Metal, Actinium Pharmaceuticals
Monday: Levi’s, Dave & Buster’s
MARKET BRIEF
Leading News
Capital One's $35B Discover Deal Gets DOJ Nod, Setting Stage for Credit Card Powerhouse
Photo Credit: Avery Evans
Why it matters:
This regulatory green light propels Capital One (COF) toward becoming America's largest credit card issuer by balances, potentially reshaping competitive dynamics for investors across the financial landscape.
Zoom Out:
The Justice Department's decision removes a critical hurdle for a deal that would vault Capital One to the sixth-largest U.S. bank by assets. More importantly for investors, it suggests regulators aren't as merger-averse as many market observers feared.
This acquisition isn't just about size—it's about strategic positioning. By gaining control of Discover's payment network, Capital One secures a seat at a table previously dominated by Visa, Mastercard and American Express.
Key Insights:
Follow the money: The deal's $35 billion price tag represents a calculated bet that scale matters increasingly in consumer finance. Capital One's merchant-focused strategy gains significant leverage with Discover's network—potentially creating new revenue streams beyond traditional interchange fees.
Regulatory chess: While the DOJ's blessing is significant, the Federal Reserve and OCC reviews remain. State attorneys general in New York and California have voiced concerns about how the merger might impact vulnerable consumers—a signal that ESG-minded investors should watch closely.
Market implications: Financial stocks have historically outperformed following major consolidation announcements. This deal could trigger a domino effect of mergers among mid-tier banks seeking competitive scale.
Market Pulse:
"This acquisition represents a once-in-a-generation opportunity to create a payments network that can compete with the established players," noted veteran banking analyst Mike Mayo in a recent investor call, highlighting why financial insiders see potential beyond the immediate consolidation benefits.
Bull’s Take:
Smart money sees this as the beginning, not the end, of a consolidation wave in financial services. For investors willing to weather potential regulatory turbulence, positioning in acquisition targets now could yield substantial premiums as larger players scramble for market share.
Headlines
Meta's AI ambitions suffer a setback (link)
Palo Alto Networks and 2 More Software Stocks That Can Handle an Economic Slowdown (link)
Intel, TSMC Tentatively Agree On Chipmaking JV In 'America First' Era (link)
Stellantis to pause production at Windsor plant, lay off 900 workers in Midwest (link)
Apple loses $250B market value as tariffs tank tech stocks (link)
Hershey Strikes $750 Million Deal for LesserEvil Popcorn Brand (link)
CRYPTO
Fear & Greed
Headlines
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*Hat-tip to NatlParkService