Market Outlook – April 30, 2018

World Stocks Expect a Positive April

 

World stocks are upbeat for the first time since January and are set to notch up a positive month. The stellar earnings reported by U.S. technology firms Facebook Inc. (FB) and Amazon.com Inc. (AMZN) injected life to tech stocks across the world.

Aside from the impressive corporate earnings, the seemingly successful Korean summit last Friday between the North and South added to calm the market. The reported large M&A deals in the U.S. and U.K. showed confidence in the markets. T-Mobile US Inc. (TMUS) and Sprint Corp. (S) have reached a merger deal while Sainsbury and ASDA in the UK are set to merge.

Walmart Sells Supermarket Business Asda

 

Walmart Inc. (WMT) has agreed on Monday to merge its UK supermarket business Asda with bigger rival Sainsbury. With the decision, the U.S. retail giant has retreated from the Europe market.

Based on the terms of the deal, Walmart will be receiving $4.1 billion in cash and a 42% stake in the combined business. Asda was valued at $10 billion and the merger would create a mega retailer with 2,800 stores and combined annual sales of $70 billion. Walmart is expected to use the proceeds from the sale to fund its expansion in other international markets.

DOJ and AT&T to Present Closing Arguments

 

The lawyers for the U.S. Department of Justice and AT&T (T) will be giving their closing arguments before the court on Monday. The judge will decide whether the wireless giant, owner of pay TV provider DirecTV, can acquire movie and TV show maker Time Warner Inc. (TWX).

The DOJ sued AT&T to block the $85 billion deal, alleging it would lead to higher prices for rival pay TV companies. The government has argued that AT&T wants viewers to stick with pay TV instead of shifting to cheaper online providers. DirecTV, the satellite TV service of AT&T, lost 187,000 traditional U.S. video customers in the first quarter of 2018.

Weak Consumer Spending Starts Fast-Food Price War

 

It’s back to the cheap fast-food dollar deals as economists estimate consumer spending to cool down and fall below the 1.5% growth rate. The sudden decline is the slowest pace in nearly five years. The prior quarter’s growth rate was a robust 4%.

McDonald’s Corp. (MCD) and other major fast-food chains decided to focus on food quality improvements recently. The purpose of the shift is to be able to  compete with upscale brands like Chipotle Mexican Grill Inc. (CMG) and Chick-fil-A. Now that the “dollar” deals surged and roared back in the U.S. during the first quarter, the price war begins.

Disney Earns Big from Marvel’s “Infinity War”

 

According to Walt Disney Co. (DIS), the Disney-Marvel movie “Avengers: Infinity War” made an estimated $630 million at the worldwide box office for its opening weekend.

The movie also brought in an estimated $250 million domestically this weekend. That makes it the biggest opening weekend ever, edging out the $248 million that “Star Wars: The Force Awakens” made in 2015.

The movie beat the record of Universal’s “The Fate of the Furious,” which made $541 million for its global opening last year.

 

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