🏋️♂️ Disney’s Sports Monopoly

MARKET UPDATE

Good Morning Investor! On Thursday, shares of the pandemic lovechild Peloton ($PTON) pedaled their way up 9% in pre-market trading. It seems their turnaround plan is working better than a New Year's resolution in January, and losses are shrinking.

Meanwhile, data analytics company Snowflake ($SNOW) saw its share price plunge faster than a skier with no poles on a black diamond run, dropping 10% despite the company raising full year guidance and beating on both the top and bottom lines. It's like they served a gourmet meal to Wall Street, only to have investors push away their plates and ask for the kids' menu instead.

TODAY’S BIG HEADLINES

Disney’s Sports Monopoly Faces Hurdles

Gold ETFs See Significant Inflows as Rate Cut Optimism Soars

Pain Compounds for China’s JD.com

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STREAMING & SPORTS

Disney’s Sports Monopoly Faces Hurdles🏋️‍♂️

Disney's Sports Broadcasting Fumble: DDisney's ($DIS) push for global sports broadcasting dominance just got hit with another rouge tackle, leaving them with more bruises than a clumsy stormtrooper. On Tuesday, antitrust regulators in India flagged Disney's $8.5 billion merger with local media giant Reliance for potential competition concerns in the all-important arena of cricket broadcast rights. Looks like Mickey Mouse might need to trade in his ears for some cricket pads!

• This spanner in the works comes just days after Disney faced similar antitrust scrutiny over the imminent launch of Venu Sports, Disney's streaming joint venture with Fox ($FOX) and Warner Bros. Discovery ($WBD). It's like they're trying to assemble the Avengers of sports broadcasting, but ended up with the Guardians of the Galaxy instead.

Jiminy Cricket, Disney's Sticky Wicket: Disney has been eyeing up the Cricket streaming market for quite some time, and the House of Mouse already controls the TV broadcast rights to Indian Premier League cricket. But in the last round of rights bidding, Disney's Hotstar streaming service lost the IPL streaming rights to Reliance's JioCinema streamer.

• Then, in February, the two companies decided to join forces anyhow, agreeing to a merger to create a joint venture that would stand as a cricket powerhouse, with control of roughly half of the country’s linear TV audience and 85% of its streaming audience. (Disney is set to own about 36% of the merged entity.) In other words, the market hasbeen captured.

Regulatory Warfare: Speaking of cornered markets, streaming service Fubo ($FUBO) has accused Disney, Fox, and WBD of doing just that via Venu Sports. Last Friday, a US district judge agreed, and now Disney is facing a battle on two fronts, warding off antitrust concerns like Darth Vader swatting away Rebel fighters.

• As part of the decision, a preliminary injunction has been placed on the launch of Venu Sports. The judge argued that together, Disney, Fox, and WBD would control 60% of nationally broadcasted sports rights in the US — potentially kneecapping competitors like Fubo. In spite of all these events, shares of Disney are up over 4% this week. Apparently, investors think Disney can handle these regulatory curveballs better than the average cricket batsman.

COMMODITIES & MACROECONOMICS

Gold ETFs See Significant Inflows as Rate Cut Optimism Soars🥇

The Golden Goose Goes Gaga: EEveryone's favorite shiny rock seems to be attracting more attention than a celebrity wardrobe malfunction. Investors from the US and Europe have been flocking to the precious metal like seagulls to a dropped ice cream cone. Since late 2022, gold has been on a scorching run, thanks to institutional buying, expectations of rate cuts, and growing international demand from China and India.

• Gold officially hit an all-time high of $2,500 per ounce last week Friday, making a 400 troy oz London gold bar worth over $1 million for the first time in history.

Leaving Rivals in the Dust: The levels of buying have been more unprecedented than a politician keeping all their promises. In fact, since May of this year, investors have poured $7.3 billion into physically-backed gold ETFs such as SPDR Gold Trust ($GLD) — marking the seventh week of positive inflows in the past eight weeks and an increase of 90.4 tonnes in physical gold holdings. That's more gold than you'd find in an Indiana Jones movie! All of this feverish buying has coincided with a 23% rally in price this year, and gold futures have managed to surpass most major assets, including the S&P 500 — making gold one of 2024’s top-performing metals.

Silver, The Forgotten Stepchild: With the Fed widely expected to begin cutting interest rates in September, investors are betting that gold will continue its ascent faster than a rocket with its pants on fire. UBS Global Wealth Management predicts gold prices could reach $2,600 per ounce by year-end, driven by central bank demand and increased ETF activity. It appears that Gold's status as the true safe haven asset remains stronger than ever. Sorry Silver, we just don't want to play with you anymore! You're like the Luigi to Gold's Mario.

INTERNATIONAL MARKETS

Pain Compounds for China’s JD.com😓

China's Stock Market Rollercoaster: it’s been a turbulent 12 months for Chinese equities, with the Shanghai Composite Index ($SHA: 000001) dropping faster than a fortune cookie in a typhoon, down almost 9% in that time. Meanwhile, some of the companies favored by international investors such as Alibaba ($BABA), Baidu ($BIDU), and JD.com ($JD) are all down 5%, 30%, and 18.8% respectively. It's like watching a panda try to climb a greased bamboo shoot!

The Big Short Goes Long on China: But hold onto your chopsticks! The release of the 13F filings for the second quarter revealed that Michael Burry — known for his role in predicting the 2008 housing crisis and his uncanny ability to look like Christian Bale — doubled down on Chinese equities, making the aforementioned trio 45% of his entire portfolio. Despite the backing of Burry, recent news has emerged which has further compounded the pain for one of these giants.

Breaking Up is Hard to Do: On Wednesday, US giant Walmart ($WMT) revealed that it has divested its entire stake in JD.com, as its e-commerce partner has struggled to maintain its market share in the country’s cutthroat online sales industry, with the rise of PinDuoDuo ($PDD), Shein and Temu. This represents the unwinding of one of the largest investments in a Chinese retailer by a foreign rival. It's like watching a retail version of "Game of Thrones," but with more discounts and fewer dragons.

• For context, Walmart was actually quite a significant shareholder, holding 289 million shares of JD, amounting to a roughly 9.4% stake in the company. Walmart stated that it had raised $3.6 billion from the sale, sending shares of JD down 9% on Wednesday.

• It appears Walmart has decided to focus on their own successful endeavors in the Chinese market, with its Sam's Club warehouse stores being very popular. Looks like they're ditching the online shopping cart for a real one.

MORE NEWS

Additional market-moving events🌎

Driverless Riding Record: Waymo surpasses 100K weekly rides: Google’s robotaxi division is now completing 100K paid rides per week across its three main markets — LA, SF, and Phoenix. Its expansion could represent an ideological threat to Uber and Lyft. (TechCrunch)

FTC Noncompete Agreement Ban Blocked: A Texas judge halted a federal ban on noncompetes, ruling the agency lacks authority to enforce it without causing “irreparable harm.” The agency may still appeal. (TheVerge)

A Dying Breed: The number of full-time real estate agents and brokers decreased to 440K in 2023, down from 512K in 2022. Largely thanks to the historical 5-6% commission shared between the buyer’s and seller’s agents being trimmed to as low as 1.5% after a $418M settlement with the National Association of Realtors. (CNN)

AR Glasses Debuts: Meta ($META) and Snap ($SNAP) will showcase their latest AR glasses next month. Both companies will distribute limited units to developers, as the technology isn't market ready. (TheVerge)

Instagram Layout Test: Instagram ($META) is testing a vertical profile grid instead of its traditional square format, aligning with the platform's trend toward vertical content. (TheVerge)

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Our selections performance👾

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