Paramount's $110 Billion Bid for Warner Brothers Discovery
Paramount's proposed $110 billion purchase of Warner Brothers Discovery hit a new hurdle. A group of state attorneys general is reportedly getting ready to sue, and the suit could be filed as soon as next week to block the deal on antitrust grounds. The states argue that joining two of Hollywood's biggest studios would cut competition, kill jobs, and leave people with fewer choices. Federal regulators have taken a warmer view of the deal.
The suit could slow the merger a lot. The deal is already under review in Oregon and in Europe, and a delay would push back billions of dollars in planned cost savings. Paramount says the deal is needed to compete in a changing media world, and it has promised to release 30 movies a year if the deal goes through. Paramount Skydance (PSKY) shares fell more than 4% on the session.
Costco Sales Slow Down
Costco shares dropped a bit more than 4% after the warehouse retailer reported June sales that were still strong but growing slower than the month before. Comparable sales rose 8.8% from a year earlier, down from a 12.5% pace in May. Total net sales climbed 10.6% to $29.2 billion, and e-commerce sales stayed strong. Investors zeroed in on the slower same-store sales, asking whether consumer spending is starting to ease after several months of big gains. Costco also set a quarterly cash dividend of $1.47 per share, a sign of its steady cash generation despite the stock's drop.
Housing and Jobs Data
New numbers gave a read on housing, where higher prices and mortgage rates keep hitting buyers. Mortgage applications fell 2.2% during the holiday week as the 30-year fixed rate rose to 6.58%. Existing home sales dropped 2.4% from May to 4.09 million, though they were higher than a year ago. Economists in the report say this shows how sensitive buyers are to affordability, even with small moves in mortgage rates. They are hopeful because of stronger jobs data, which should help housing.
The latest jobless claims back that up. The number of Americans filing for unemployment benefits fell to 215,000 last week, which keeps supporting the low-hire, low-fire pattern in the job market.
What's Next: Delta and SK Hynix
Delta reports before the opening bell tomorrow. It gives one of the first big looks at the health of the consumer, corporate travel, and the wider economy. Beyond the headline numbers, Wall Street is watching premium and business travel demand, management's read on summer bookings, and full-year guidance, all as tests of whether travel demand holds up. Delta is the first major US airline to report, and its results each season are treated as a bellwether for the whole airline industry and for broader consumer spending.
SK Hynix's ADR listing on the Nasdaq is another test of investor appetite. Reports say it is looking to price the listing at $149 per ADR, 3% above the closing price of the common shares in Seoul. South Korea saw a strong rebound overnight after the stock had dragged the Kospi into bear market territory. The shares sit about 25% below their all-time high but are still up more than 200% year-to-date. This will be an important test for memory chips and could narrow the valuation gap with Micron.
