Boeing Buys Back Spirit AeroSystems for $4.7 Billion
5 Things to Know Before the Stock Market Opens
Boeing Expected to Face DOJ Criminal Charge
1. U.S. Stock Markets Rising Entering the Second Half of 2024
U.S. stock futures are climbing in premarket trading as investors welcome the second half of 2024. The market has wrapped up a robust second quarter, propelled by enthusiasm for artificial intelligence (AI) and easing inflation data, which has raised Wall Street’s hopes for at least one interest-rate cut later this year. The AI demand notably contributed to Nvidia's (NVDA) 36% gain in the second quarter and Apple’s (AAPL) recovery from a first-quarter slump. Both tech giants now boast market caps exceeding $3 trillion, joining Microsoft (MSFT) in this elite category. However, other market segments showed weakness, with six out of 11 sectors in the S&P 500 losing value in the three months through June. This week is shortened due to the Independence Day holiday, with markets closing early on Wednesday and remaining shut on Thursday.
2. Boeing Buys Back Spirit AeroSystems for $4.7 Billion
Shares of Spirit AeroSystems (SPR) are surging over 4% in premarket trading following Boeing’s (BA) announcement to buy back the parts supplier for $4.7 billion in stock, translating to $37.25 per share. Boeing, which spun off Spirit in 2005, will assume $8.3 billion of Spirit’s debt as part of the deal. The agreement also involves Spirit offloading some European assets to Airbus for a nominal $1, accompanied by $559 million in compensation from Boeing. This acquisition aims to streamline Boeing’s supply chain amid ongoing challenges, such as the recent incident where a 737 Max 9 aircraft's door plug blew out in midair.
3. Boeing Expected to Face DOJ Criminal Charge
The U.S. Department of Justice (DOJ) is reportedly preparing to charge Boeing with fraud over two fatal crashes, compelling the company to plead guilty or face trial. The proposed plea deal includes a $487.2 million penalty, partially credited from a previous settlement. Prosecutors allege that Boeing deceived air-safety regulators regarding a crucial aspect of the 737 MAX planes involved in the 2018 and 2019 crashes. A guilty plea could result in a felony conviction, potentially affecting Boeing’s ability to secure government contracts.
4. Meta Allegedly Violates EU’s Digital Markets Act
Meta Platforms (META) is under scrutiny by the European Commission for potentially violating the Digital Markets Act (DMA) with its "pay or consent" advertising model. The Commission’s preliminary findings suggest that Meta's model forces users to consent to the combination of their personal data without offering a less personalized alternative for Facebook and Instagram. If found guilty, Meta could face fines up to 10% of its total worldwide turnover. This follows recent EU actions against other tech giants, such as Microsoft (MSFT) and Apple (AAPL), for antitrust violations. Meta’s shares are up approximately 0.5% in premarket trading.
5. BlackRock Acquires UK Data Firm Preqin for $3.2 Billion
BlackRock (BLK) has announced the acquisition of British data group Preqin for £2.55 billion ($3.2 billion) in cash. This strategic move enhances BlackRock's access to data in the rapidly growing private markets sector, which is projected to expand from an $8 billion market today to $18 billion by 2030. BlackRock's shares have risen 0.5% in premarket trading, reflecting investor confidence in the firm's increased capabilities in private markets data.
Conclusion
- As we kick off the third quarter of 2024, investors are closely monitoring a range of significant market developments. U.S. stock futures are rising, buoyed by strong second-quarter performance driven by AI enthusiasm and easing inflation. Key corporate moves, such as Boeing’s acquisition of Spirit AeroSystems and potential legal challenges, alongside regulatory scrutiny on tech giants like Meta, are set to shape market sentiment.
- Additionally, BlackRock’s strategic acquisition of Preqin highlights the growing importance of data in private markets. As the trading week unfolds, attention will turn to the upcoming June jobs report and its implications for Federal Reserve policy, providing further direction for investors in this shortened holiday week.