Payments giants have surrendered

Tickergeek market update:

Today’s big headlines:

• Payments giants have surrendered

• Trump vs Literally anyone else?

• Layoffs galore this week

• Gamestop ends the meme stock party

Payments giants have surrendered🏳️

What’s happening? In an surprising turn of events, Visa (V) and Mastercard (MA), the titans of the payment industry, have consented to a staggering $30 billion settlement over US transaction fees.

Here’s the specifics: The agreement, reached on Tuesday, mandates that these two payment juggernauts will have to curtail their transaction fees over the next five years, with a particular focus on the so-called swipe fees they levy on sellers.

Both corporations have committed to slashing sellers’ swipe fees by a minimum of 0.04 percentage points for at least three years and to maintain swipe fees at or below the rates established at the close of last year for the forthcoming five years. This has been dubbed by some as one of the most significant antitrust lawsuits to date.

Does this materially impact earnings? Undeniably, this is not a favourable development for either enterprise, especially in light of the confirmation that fees will remain static for a minimum of three to five years. However, it’s worth noting that both are global entities, with Mastercard witnessing substantial growth in international and emerging markets. It remains a question whether this expansion can insulate shareholders from the inevitable margin declines that are on the horizon.

Trump vs Literally anyone else?🤔

What’s happening? Trump now finds himself in a competitive race, not only with the incumbent President, Joe Biden and Robert Kennedy Jr, but also with a new contender, Literally Anybody Else.

Literally Anybody Else? A Texan man has legally altered his name in a bold bid for the country’s presidency. The US army veteran, previously known as Dustin Ebey, has stated that his actions stem from his dissatisfaction with the potential choices available to voters in the 2024 election. He was quoted as saying, “Literally Anybody Else isn’t a person, it’s a rallying cry.”

Trump’s stock market debut: Trump’s social media venture, Truth Social, successfully completed its merger with the SPAC company DWAC on Monday. It now trades on the Nasdaq under the ticker DJT (Donald J Trump). Since its debut, DJT has surged by 65%, enriching the former president by $4 billion and catapulting him into the ranks of the world’s 500 wealthiest individuals.

Layoffs galore this week🗃️

What’s happened? On Tuesday, a large shift was observed in the financial world as companies such as GoPro (GPRO), Canada Goose (GOOS), and Dell (DELL) all announced substantial layoffs in a bid to reduce costs.

Canada Goose: On Tuesday, Canada Goose declared that the company would be downsizing its global corporate workforce by 17% in an effort to curb costs. This move is largely attributed to the dwindling demand for luxury goods in the US. To put it into perspective, this figure equates to approximately 156 jobs. Shares of the luxury parka manufacturer initially plummeted on this news, but they managed to recover during Wednesday’s trading session, and are now down by over 34% over the past twelve months.

GoPro: The action camera manufacturer has unveiled a plan to decrease its global workforce by about 4% to reduce operating costs and enhance operating leverage, resulting in restructuring costs totaling $7.5 million. Unlike Canada Goose, shares of GoPro have not rebounded after the initial slump, and the stock is now down 35% year-to-date.

Dell: The PC manufacturer disclosed in a regulatory filing that it has eliminated around 6,000 jobs as part of a wider cost-cutting initiative that also encompasses limiting external hiring and reorganizing staff. Shares have dipped 3% on this news, however, the stock continues to benefit from the AI boom and is currently up an impressive 49% year-to-date.

Gamestop ends the meme stock party😥

Wait what? GameStop (GME), once the darling of meme stock enthusiasts, has been on a rollercoaster ride this week. The stock rallied by 17% from Monday morning to Tuesday evening, as if it was in a race with a rocket. However, following the release of the company’s earnings results, it seems the rocket ran out of fuel and the stock gave back all of its gains. It’s like a game of snakes and ladders, but it seems GameStop just landed on a snake.

Gamestop’s earnings results were as follows:

Is this the end for the meme stock, will we ever see another short-selling induced rally for the once-great video game retailer?

Additional market-moving events🌎

• Moody’s takes aim at Boeing: The credit ratings agency Moody’s (MCO) has now placed the troubled aircraft manufacter on review for a potential credit rating downgrade, which could spell further trouble.

• Sweden maintains rates: The Swedish central bank has stayed the course and maintained interest rates at 4.00%, with the anticipation of several rate cuts in the coming months. projecting interest rates will be at 3.44% by the fourth-quarter.

• Shein, the next innovator: Shein, the discount fast fashion retailer is exploring following the AWS method and selling its supply chain to brands via a “supply chain as a service” model in a bid to diversify beyond retail.

• Big pharma at it again: Johnson & Johnson (JNJ) have just announced a planned acquisiton of Shockwave Medical, the maker of cardiovascular medical devices, for nearly $12 billion.

Our selections performance👾

Last week Monday, we released our “two superperformers” stock picks which we believe will provide significant outperformance compared to the S&P 500.

Here’s how the two stocks have performed since then:

• Evolution AB: 1,301.40 SEK (📉-0.80%)

• Hims & Hers Health: $15.74 (📈+8.78%)

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