📈 DOJ Seeks to Breakup Google

Good morning.

⚡ The Fast Five → Boeing's debt could be junk, China stocks take a dive, X is back in Brazil, Honeywell looks for growth after spinoff, DOJ wants Google monopoly breakup

And now…

⏱️ Your 5-minute briefing for Wednesday, October 9, 2024:

MARKET BRIEF
Before the Open

Pre-Market

Fear & Greed

Trends

• Wall Street ends higher ahead of inflation data

• Futures slip as markets await Fed minutes; Alphabet drops

• China stocks get a reality check; Europe shudders

WHAT WE’RE WATCHING
Events

• Today: Federal Reserve - Federal Open Market Committee, 2:00PM

• Why You Should Care: It's a detailed record of the FOMC's most recent meeting, providing in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.

Earnings Reports

• Today: AZZ, Applied Digital, Bassett Furniture

• Tomorrow: Infosys, Delta, Domino’s, Neogen

MARKET BRIEF
Leading News

DOJ Targets Google

Why it matters: The DOJ’s push to break up Google (GOOGL) could reshape the tech landscape. But for investors, this potential shakeup may be an opportunity rather than a setback.

The big picture: Google’s dominance in search, advertising, and mobile software has placed it squarely in the DOJ’s crosshairs. A recent ruling deemed the company a monopoly, paving the way for a potential breakup. While headlines scream uncertainty, there’s a bullish case for investors if Google’s businesses are split up.

• A breakup could unlock hidden value in Google’s core units—search, YouTube, Android—allowing each to compete more effectively and focus on growth.

• Past corporate splits (think AT&T in the 80s) have shown that breaking up giants often leads to stronger, more agile companies and increased shareholder value.

Go deeper:

• Investors could benefit from owning shares in multiple Google spinoffs, each with clearer focus and growth potential. Search and advertising alone are multi-billion dollar markets, while YouTube and Android offer huge potential in video and mobile.

• The breakup could spur innovation across the tech industry, as new competitors emerge and challenge Google’s dominance in certain sectors.

What they're saying: “This ruling is a critical step toward leveling the playing field in tech,” says a legal expert. "But from an investment perspective, the split could create several high-growth companies.”

The bottom line: A Google breakup could be a long-term win for investors, offering a chance to own shares in multiple market-leading businesses. Keep an eye on regulatory developments, but don’t fear the split—it could unlock significant shareholder value.

Boeing’s Debt Drama

Why it matters: Talk of Boeing's debt potentially slipping into junk status sounds alarming, but long-term investors should see opportunity in the noise.

The big picture: Boeing (BA) is wrestling with $55 billion in debt, and S&P Global has hinted that the aerospace titan’s credit rating could be downgraded if cash flow doesn’t improve. While this could drive up borrowing costs, Boeing’s backlog of orders and strong demand for air travel should provide enough lift to keep it airborne.

Credit downgrades often spook markets, but Boeing is still positioned as a leader in an industry poised for growth. The global recovery in air travel and renewed focus on next-gen aircraft technology could help Boeing navigate through any short-term financial turbulence.

Key points to consider:

• Rising debt concerns: Boeing’s heavy debt load is a risk, but much of it was accumulated to weather the pandemic’s impact on air travel.

• Strong market demand: With a multi-year backlog and a growing need for fuel-efficient jets, Boeing’s long-term fundamentals remain bullish.

• Tech innovations: Boeing's development in sustainable aviation and defense tech could bolster future growth and improve margins.

What they're saying: "Yes, Boeing’s debt is high, but they’re not flying solo. The entire aerospace sector is betting on a continued recovery, and Boeing is at the forefront."

The bottom line: While Boeing’s debt concerns shouldn’t be ignored, the company’s long-term growth potential makes this a dip worth watching. Investors looking for value in aerospace might see this as a prime buy-the-dip moment.

Headlines

• Millions of Floridians told evacuation orders are a ‘matter of life or death’ as Hurricane Milton nears (link)

• China stocks take biggest dive since 2020 as stimulus skepticism emerges (link)

• US states sue TikTok for harming youth mental health (link)

• Elon Musk’s X cleared to resume service in Brazil (link)

• Northvolt unit files for bankruptcy as expansion plans halt (link)

• Honeywell to spin off advanced materials unit in CEO's growth push (link)

CRYPTO
Fear & Greed

Headlines

• Crypto Majors BTC, ETH, XRP Little Changed as HBO Calls Peter Todd the Bitcoin Creator (link)

• Crypto.com Receives Wells Notice From SEC (link)

• Cathie Wood's ARK Invest Buys $2.2M of Coinbase Shares (link)

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On the Socials