#5things to know by @BayStreetAmber
Hurricane watch, Couche-Tard goes for it, and too big to Google
There is a big conference in town for global investors focused on sustainable investing. Yesterday there was an acknowledgement of the backlash on so-called ESG investing. My three kids were upset I was going, not for any ideological reason, though sometimes I feel like my four-year-old is a bit of a corporate apologist. No, they were just sad I wasn’t going to be home for dinner. So, I gathered them around to say I am getting together with a bunch of people who think about the shape of the world we will leave to them. I’ll be honest, I don’t think the three-year-old got it. But my seven-year-old seem to get it and said “If we don’t take care, the world will crack open and then we will die.” Talk about a flair for the dramatic! But watching my beloved Gulf Coast get hammered right now, I’d be lying if I said it didn’t feel like something was cracking.
Batten down the hatches: As Category 5 Hurricane Milton barrels toward Florida’s gulf coast just two weeks after Hurricane Helene, analysts are sharpening their pencils. Where are we seeing this show up in the market? Shares of Home Depot and Lowe’s hit record highs yesterday. Loop Capital upgraded Home Depot to buy this morning saying that while the hurricane may disrupt current quarter sales, store checks indicate home improvement retail demand has bottomed. Orlando isn’t expected to face a direct hit, but the home of the happiest place on earth could still face pressure. Goldman Sachs is warning that Disney will face a $150-$200 million hit as attendance is expected to fall 6% this quarter.
Stoic: Futures are negative this morning after a rally in the US markets yesterday. Today at 2pmET the minutes from the FOMC meeting in September will be released. Investors will look for insight into why they decided to cut rates by a greater than expected 50 basis points and more colour on why there was a dissenter. Tomorrow, we get inflation. Overnight, Chinese markets struggled again as disappointment remains about the lack of details around fiscal stimulus. Having said that, China’s finance ministry is set to hold a media briefing Saturday so perhaps there will be more goodies for investors.
Too big to Google: Shares of Google are down a bit in the pre-market after the US Justice Department announced it was considering asking a federal judge to break up Google/Alphabet. This was revealed in court filings yesterday and is aimed at preventing Google from using things like Chrome, Play and Android to benefit Google search. Despite what seems like the most intense effort thus far to make this happen, the shares being down only 1% reflect a great deal of skepticism that this will come to pass any time soon.
Slurp on that: We will watch shares of Couche-Tard this morning as several are reporting the convenience store operator sent a new offer to buy the parent company of 7/11 chains. The new offer reportedly values Seven & i holdings at $47.2 billion, a 20% improvement from the prior offer. Each time Couche-Tard goes down this road the stock sells off and is currently trading at around a 1-year low. This is less about the deal itself and more about a possible equity dilution to finance the deal. So we could see some pressure at the open.
The most beautiful results in the world: Shares of Helen of Troy are popping more than 13% in the pre-market. Back in the day, Greek mythology held she was the most beautiful woman in the world. The stock has been less than pretty over the last year dropping nearly 50%, but today the maker of beauty products and home décor posted results that were good enough for investors. Sales didn’t fall as much as expected and profit was better.