May 26, 2022 TradeUP Thursday Latest news and bulletin updates
Dow Jones 32,248(+0.45%)
S&P 500 3,929(+0.22%)
(Opening price as of 05/26/2022 compared to last close)
Fed minutes point to more rate hikes that go further than the market anticipates
Snap stock tumbled 43% on Tue after a profit warning
Broadcom announced plans to buy VMware in $61 billion deal
Musk will commit more of his own wealth to finance his $44 billion Twitter deal
Share Your Thoughts:
Stocks wavered over the brink of a bear market, a recession alarm is sounded?
Friday’s sharp intraday drop to a low on the S&P 500 of 3,810 was a brush with a bear market. Recession fears cast shadow over business leaders and market participants. The textbook definition of a recession is a prolonged period of economic decline, beginning when the economy peaks and ending when it bottoms out, with macroeconomic signals such as weak consumption, increasing unemployment rate, decreasing industrial output, and greater risk of default.
The chart shows how the recession performed for the past 3 times in US.
The stock market forecasted the recession coming and ending in advance, which sent an alarm to the overall economy. S&P 500 started to decrease 3 months prior to the recession and started to rebound 3 months prior to a recovery. The S&P 500 is down nearly 18% from its last record high in January and briefly fell into bear-market territory last Friday before paring losses.
Do you think a recession is coming?
A.Yes, recession within 3 months
B.No, not a signal for recession
C.Too early to call a recession
Share your thoughts with us for a chance to win a free stock!
#1. Fed minutes point to more rate hikes that go further than the market anticipates
• Fed minutes released Wednesday indicated that officials are prepared to move ahead with multiple 50 basis points interest rate increases. In addition, FOMC said policy may have to move past “neutral” and into “restrictive” territory.
• The minutes indicate that members are hopeful they can bring down inflation, but also concerned about financial stability risks.
#2. Snap stock tumbled 43% on Tue after a profit warning
• Snap will miss its forecast for revenue and profit in 2Q22, CEO Evan Speigel warned on Monday. The company will also slow hiring through the end of the year as it looks to manage expenses
• His message sent a chill across the digital advertising industry. Snap lost an astounding 43.1% of its market cap on Tuesday. Beyond that, Pinterest plunged 23.6%, Meta dropped 7.6%, Google lost 5% and Twitter sank 5.6%.
#3. Broadcom announced plans to buy VMware in $61 billion deal
• The deal would be one of the largest technology acquisitions of all time, behind Microsoft’s pending $69 billion deal to purchase Activision Blizzard and Dell’s $67 billion purchase of EMC in 2016.
• The deal would push Broadcom deeper into a software world. Under the deal, VMware shareholders will elect to receive either $142.50 in cash or 0.2520 Broadcom shares for each VMware share. Broadcom also will assume $8 billion of VMware’s debt.
#4. Musk will commit more of his own wealth to finance his $44 billion Twitter deal
• An SEC filing showed Musk committed $33.5 billion in equity, up from the prior $27.25 billion.
• Musk no longer planned to rely on a margin loan backed by shares of Tesla, which are down by about a third since Twitter accepted his bid in late April.
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