PTON - Wall Street Breakfast Podcast: Musk Announces New Chief Twit Tesla Rises

2023-05-12 07:07:16 ET

Listen on the go! Subscribe to Wall Street Breakfast on Apple Podcasts and Spotify Elon Musk says he's picked a new Twitter CEO ; Tesla ( TSLA ) shares jump (updated). PacWest ( PACW ) stock resumes drop after pledging more collateral to discount window. J&J ( JNJ ) talc victim group seeking $30B in fraudulent conveyance complaint. Learn more about these stocks with Seeking Alpha Premium .

This is an abridged transcript of the podcast.

• Elon Musk makes a surprise announcement. He says he’s found a new Twitter CEO. Tesla investors react positively.

• The meeting between President Biden and congressional leaders has been postponed. The meeting scheduled for today is now set for next week.

• Peloton announces a recall. Following the announcement the stock dropped nearly 9%.

—

You can find links to all the stories we talk about on the show in show notes and our daily Seeking Alpha Wall Street Breakfast articles.

OUR TOP STORY

–

Elon Musk announced that he's hired a new CEO to lead Twitter.

He tweeted Thursday afternoon that She will be starting in ~6 weeks!

Of course, the digging began as soon as the announcement was made.

The Wall Street Journal reports that NBCUniversal ( CMCSA ) ad chief Linda Yaccarino is in talks to become Twitter's next CEO, Yaccarino interviewed Musk on stage at an event last month.

In the tweet, the Tesla CEO went on to say that his role would transition to being exec chair & [chief technology officer].

Following the announcement, the Tesla stock (NASDAQ: TSLA ) jumped 2.6% and closed the day up 2.1% and is up 1.3% premarket.

This is definitely a story that has you talking in the comments on Seeking Alpha. More than 125 comments thus far including “exactly what Twitter needed” and “Now TSLA can make us money again.”

—

The U.S. debt-limit gathering initially set for today between President Joe Biden and congressional leaders has been pushed to next week .

Staff will continue to negotiate the deal.

If you remember, we told you Wednesday here on Wall Street Breakfast that there was little progress after the group's meeting on Tuesday in terms of striking an agreement to lift the debt ceiling to avert a default.

Treasury Secretary Janet Yellen warned on May 1 that the Treasury could run out of cash and extraordinary measures to pay the government's bills as early as June 1. Biden wants Congress to raise the borrowing limit, but House Republicans have said they will not do so if spending cuts are not agreed upon.

NOW MORE ON THE MARKET

U.S. stocks on Thursday put in a mixed performance for a second straight session, despite further economic data that showed a moderation in wholesale inflation and signs of cooling in the labor market.

Disney ( DIS ) shares fell after the entertainment giant bled streaming subscribers for a second straight quarter. The stock weighed on both the S&P 500 ( SP500 ) and the Dow ( DJI ), with the former slipping 0.2% and the latter retreating 0.7%.

The Nasdaq ( COMP.IND ) ended slightly higher by 0.2%. The Nasdaq was helped by a jump in shares of Google-parent Alphabet ( GOOG ) ( GOOGL ) after the company said it would expand its use of artificial intelligence at its developer conference.

Of the 11 S&P sectors, eight closed in the red, led by a more than 1.2% fall in Energy. Communication Services, Consumer Discretionary and Consumer Staples were the three gainers.

On a Y/Y basis, headline PPI rose +2.3%, which was also below consensus and lower than the reading in March.

The cooler than anticipated PPI data came on the heels of Wednesday's consumer price index ( CPI ) report which showed a Y/Y fall in headline CPI.

Aside from the PPI report, the economic calendar also saw the number of Americans filing for weekly jobless claims rise to its highest level since October 2021, pointing to cooling in what has been a highly resilient labor market.

Treasury yields were mixed. The 10-year yield ( US10Y ) was down 6 basis points to 3.38% while the 2-year yield ( US2Y ) was flat at 3.90%.

—

MORE OF OUR TOP STORIES

A large group of plaintiffs that have sued Johnson & Johnson (J&J) related to talc claims have filed a motion in a federal bankruptcy court seeking standing to bring a $30B fraudulent conveyance complaint.

The complaint is directed against LTL Management, a unit specifically set up by the healthcare giant to handle the claims by filing for bankruptcy.

The group already has a standing motion that argues that if LTL is successful in demonstrating it is in financial distress, "it intentionally manufactured that distress by giving up contractual rights against its parent, Johnson & Johnson (NYSE: JNJ ), worth billions of dollars."

The new complaint seeks to void and recover that transfer for the benefit of all talc claimants, because "LTL is incapable of acting contrary to J&J's ( JNJ ) demands."

A hearing on the motion is scheduled for June 7 in Trenton, N.J.

—

PacWest Bancorp (NASDAQ: PACW ) stock dropped nearly 23% in Thursday trading after the regional bank said it has pledged an additional $5.1B of loans to the Federal Reserve Bank to allow $3.9B in additional borrowing under its discount window borrowing facility.

That extra borrowing comes after deposits declined by ~9% in the week ended May 5, with the majority of withdrawals occurring on May 4 and 5 following reports that PacWest ( PACW ) was exploring its options .

—

Peloton Interactive ( PTON ) declined nearly 9% after the Consumer Product Safety Commission (CPSC) issued a major recall of 2.2M exercise bikes due to a seat hazard. The recall applies to bikes with the model number PL01 that were sold between 2018 and May of 2023.

The most recent analysis about Peloton was written by Dilantha De Silva . He’s the investing group leader of Beat Billions on Seeking Alpha.

The article is entitled “ Peloton is ready for a new look, its stock is not .”

De Silva tells his 10K followers that rebranding is unlikely to lift the stock higher in the absence of an earnings catalyst.

—

U.S. District Judge Robert Payne of Richmond, Virginia, has ruled that banning licensed firearms dealers from selling guns to adults under the age of 21 is unconstitutional, stating the Gun Control Act of 1968 and federal regulations of the ATF violate the Second Amendment.

The ruling, which the Department of Justice is likely to challenge, will not take effect until a final order is issued in the coming weeks. It will also not impact the 19 states which have their own laws barring handgun sales to anyone younger than 21.

Related: Smith & Wesson (NASDAQ: SWBI ), Sturm, Ruger (NYSE: RGR ), Vista Outdoor (NYSE: VSTO ), National Presto Industries ( NPK ), Big 5 Sporting Goods ( BGFV ), Sportsman's Warehouse (NASDAQ: SPWH ), AMMO ( POWW ) and Olin Corporation ( OLN ).

—

If you want more information about a topic we mentioned on today’s show. You can find links in show notes and our daily Seeking Alpha Wall Street Breakfast articles.

—

Now let’s take a look at the markets as of 6:20 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up a 0.4%. The S&P 500 is up 0.3% and the Nasdaq is up 0.4%. Crude oil is up 0.2% at $71 a barrel. Bitcoin is down nearly 4% at less than $27,000.

In the world markets, the FTSE 100 is up 0.4% The DAX is up 0.4%.

On today’s economic calendar, at 10am consumer sentiment and there are two fed speakers today, Mary Daly and James Bullard.

For further details see: