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- 📈 Comcast Unplugs Cable
📈 Comcast Unplugs Cable
Jersey Mike's acquired for $8B, Qualcomm expects $4B in sales, Sony to acquire Elden Ring, Netflix stock hits new high, Comcast to spinoff channels
Evelio Silvera
November 20, 2024
In partnership with
Good morning.
⚡ The Fast Five → Jersey Mike's acquired for $8B, Qualcomm expects $4B in sales, Sony to acquire Elden Ring, Netflix stock hits new high, Comcast to spinoff channels
🔎 Market Trends → US stocks end mixed despite boost from Nvidia, Walmart; US Futures Edge Higher Ahead of Nvidia Earnings
And now…
⏱️ Your 5-minute briefing for Wednesday, November 20, 2024:
MARKET BRIEF
Before the Open
As of market close 11/19/2024.
Pre-Market
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Fear & Greed
Markets in Review
Nvidia Soars Ahead of Earnings; Markets Keep an Eye on Geopolitical Tensions
The Nasdaq Composite added 1% to close at 18,987.5, while the S&P 500 edged up 0.4% to 5,917. The Dow slipped 0.3%, ending the day at 43,268.9. Technology led the charge, but energy and financials lagged behind.
The Big Picture:
Wall Street saw mixed performance as Nvidia (NVDA) rallied nearly 5% ahead of its fiscal Q3 earnings, fueling optimism in the tech sector. Investors anticipate Nvidia's dominance in AI-driven chip demand to shine in its report, with analysts forecasting an 83% YoY revenue increase.
Geopolitical tensions between Russia and Ukraine also weighed on sentiment. Ukraine’s recent missile strikes using US-made weapons added a layer of complexity to global markets. Oil prices inched higher, with WTI crude up 0.7% to $69.61 per barrel, reflecting potential supply concerns.
Meanwhile, the US 10-year Treasury yield eased by 2 basis points to 4.39%, providing a slight tailwind for equities.
Market Movers:
Nvidia (NVDA): Shares climbed 4.9%, the top gainer on the Dow, S&P 500, and Nasdaq. Analysts cite strong AI-driven demand and a backlog of orders as indicators of continued growth. Earnings are due Wednesday, with expectations sky-high for this chip-making juggernaut.
Super Micro Computer (SMCI): Surged 31%, the S&P 500’s best performer. The AI server maker’s extension request to regain Nasdaq compliance was positively received, signaling investor confidence in its turnaround plan.
Walmart (WMT): Rose 3% after crushing Q3 expectations and raising full-year guidance. The retail giant's gains across segments highlight resilience amid broader economic uncertainty.
Lowe’s (LOW): Dropped 4.6% as softness in DIY discretionary spending raised concerns, even though the company raised its outlook for the year.
What They’re Saying:
“Nvidia’s earnings will be a litmus test for whether the market’s enthusiasm for AI is grounded in reality,” noted Truist analysts.
WHAT WE’RE WATCHING
Events
Thurs. Nov 27: Dept. of Labor - Unemployment Claims - 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.
Earnings Reports
Today: Nvidia, TJX, Williams Sonoma, Wix, Palo Alto Networks
Tomorrow: Intuit, Deere & Co, Ross Stores, Warner Music Group
MARKET BRIEF
Leading News
Comcast Spins Off Cable Channels: Betting Big on Streaming and Consolidation
Why it matters:
Cable’s kingpins are going solo. Comcast’s plan to spin off MSNBC, CNBC, and other cable channels signals a bold shift amid streaming’s rise and cable’s decline. Investors are watching to see if this move sparks growth—or just delays decline.
Zoom Out:
Comcast’s decision to carve out a new publicly traded company from its cable networks highlights the growing divide between legacy TV and digital-first platforms. While cable channels like MSNBC and CNBC remain cash cows, generating $7 billion in annual revenue, the rapid shift to streaming has forced media giants to rethink their strategies.
The new company, led by NBCUniversal Media Group chairman Mark Lazarus, will have its own management and be positioned to consolidate or acquire competitors. Comcast retains its NBC broadcast network, Peacock streaming service, and theme parks—leaning hard into growth sectors.
This isn’t just about cutting cable loose; it’s a bet on a new media ecosystem, where consolidation and efficiency may define the winners.
Deep Dive:
Profitable—but declining: Cable networks remain highly profitable but face steep subscriber losses. Comcast’s spinoff aims to unlock value while shedding operational drag.
Consolidation ahead: Analysts predict the new entity could both acquire rivals and attract suitors, setting the stage for a wave of M&A activity in the media sector.
Streaming's shadow: With the rise of Netflix (NFLX) and Disney+ (DIS), cable’s role continues to shrink, but its ability to deliver live news, sports, and niche content still appeals to advertisers and core audiences.
Market Pulse:
"Investors have yearned for this move for years," says Craig Moffett of MoffettNathanson. The spinoff offers clarity and potential upside for Comcast shareholders.
Bull’s Take:
Comcast’s spin-off isn’t a retreat—it’s a recalibration. By streamlining operations and focusing on streaming and core assets, Comcast (CMCSA) is doubling down on the future of media. Savvy investors should watch the new company’s M&A moves and Comcast’s strengthened balance sheet. The spinoff creates potential opportunities for growth. Keep an eye on how the new company performs in an increasingly competitive media landscape—and consider long-term plays on Comcast’s revamped strategy.
Headlines
Jersey Mike’s sandwich chain is acquired by private equity firm Blackstone for $8 billion (link)
Qualcomm says it expects $4 billion in PC chip sales by 2029, as company gets traction beyond smartphones (link)
PayPal revives its money-pooling feature (link)
Sony In Talks To Acquire Elden Ring Publisher Kadokawa (link)
FinTechs Cautious About Going Public Despite Klarna IPO (link)
Netflix’s stock hits record high after news that Tyson-Paul fight drew 108 million viewers (link)
CRYPTO
Fear & Greed
Headlines
DAILY SHARE
On the Socials
*Hat-tip to litcapital
RYSE and Shine: Don’t Sleep On This Smart Home Company
Ring 一 Acquired by Amazon for $1.2B.
Nest 一 Acquired by Google for $3.2B.
Smart home companies have seen some spectacular exits, yielding massive returns for early investors, yet one category in this burgeoning industry has eluded adoption - Smart Shades. High prices and complex installation procedures have prevented the mass adoption of smart shades despite their benefits, and one company is set to change that.
RYSE is the tech firm poised to dominate this category (growing at an astonishing 55% annually), and their public offering of shares priced at just $1.75 has opened. Existing shareholders have seen their shares grow by over 20X, and their products have just launched in over 100 Best Buy stores.
Retail distribution was the main driver behind the acquisitions of both Ring and
Nest, and RYSE’s exclusive deal with Best Buy resembles that which led Ring and Nest to their billion-dollar buyouts.