MSFT - Wall Street Breakfast Podcast: U.K. Issues Preliminary OK For Microsoft-Activision Deal

2023-09-22 06:49:43 ET

Summary

• U.K. competition regulator issues preliminary approval for Microsoft-Activision merger.
• Kevin McCarthy's attempt to avert government shutdown fails.
• Detroit automakers face potential expanded strike as negotiations continue.

Listen below or on the go on Apple Podcasts and Spotify

U.K. issues preliminary approval for Microsoft-Activision merger. (00:26) Kevin McCarthy's third attempt to avert government shutdown fails . (01:02) Detroit automakers could face expanded strike as negotiations continue. (02:24)

This is an abridged transcript of the podcast.

The U.K.'s competition regulator says there are " reasonable grounds " for a merger between Activision Blizzard (NASDAQ: ATVI ) and Microsoft (NASDAQ: MSFT ) after the latter submitted revised terms for the $69B deal.

The restructured proposal "opens the door" to the deal being fully cleared after gathering third-party feedback. The tie-up had already been approved in every other global jurisdiction, with the FTC withdrawing a merger lawsuit in July.

The U.K Competition and Markets Authority had blocked the deal due to concerns about competition in cloud gaming.

House Speaker Kevin McCarthy's latest plan to avert a federal government shutdown did not go well on Thursday, with a little over a week left before the deadline.

The Associated Press reported that a group of far-right Republicans voted with Democrats to block a vote on a traditionally popular defense funding bill. A test vote to advance the bill failed 212-216. It was the third time that McCarthy’s attempt to make progress on funding the government failed.

"This is a whole new concept of individuals who just want to burn the whole place down," McCarthy said after the vote.

McCarthy had hoped passing the bill would show progress and build support for a temporary funding bill that would provide more time to negotiate more permanent funding for fiscal 2024.

In all, Congress would need to pass 12 appropriation bills to fund the federal government.

In June, Congress passed a debt ceiling bill that lifted the limit for two years. That agreement included a plan to keep non-defense spending capped at the current level for FY2024 with only a 1% increase in FY2025. But now some Republicans have demanded cuts to the non-defense budget.

After the failure to move forward, legislators went home for a long weekend, Bloomberg reported. McCarthy told them he'd give them "ample notice" if there were any votes before Tuesday.

Today we await an announcement by The United Auto Workers about which locations will be affected by a broadening of the targeted strike against Ford (NYSE: F ), General Motors (NYSE: GM ), Stellantis (NYSE: STLA ).

If you remember, Union President Shawn Fain alerted that the strike against the the big three would expand if they had not made substantial progress toward a fair agreement by noon.

UAW workers have been picketing at three plants for a week. The combined number of striking workers is about 12K.

Ford ( F ) is believed to be further along than General Motors ( GM ) and Stellantis ( STLA ) in its talks with the UAW. If Ford ( F ) were to work out a deal, there’s a belief that GM would follow. However, a potential plan by Stellantis ( STLA ) to close or sell up to 18 facilities in the U.S. could complicate the process for the company.

Ford ( F ), General Motors ( GM ), and Stellantis ( STLA ) all fell between 1.3 and 1.7% on Thursday.

Other headlines to look out for on Seeking Alpha:

FAA alert warns of GE jet engines with unapproved parts

FTX founder Sam Bankman-Fried to stay behind bars ahead of trial - report

Canada's Stelco weighing bid for US Steel - Bloomberg

U.S. stocks on Thursday ended deep in the red while the 10-year Treasury yield ( US10Y ) surged.

The Nasdaq ( COMP.IND ) was the worst performer among the major averages, retreating 1.82%. The S&P 500 ( SP500 ) fell 1.64%. The Dow ( DJI ) declined 1.07%.

All 11 S&P sectors ended in negative territory, with Real Estate and Consumer Discretionary the top two losers.

The number of Americans filing for initial jobless claims in the past week fell to 201K, intimating continued resilience in the labor market.

And existing home sales fell to a seven-month low.

Treasury yields were higher. The 10-year yield ( US10Y ) jumped 14 basis points to 4.49%. The 2-year ( US2Y ) was up 2 basis points to 5.14%.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up 0.1%, the S&P 500 is up 0.2% and the Nasdaq is up 0.4%. Crude oil is up 1% at more than $90 a barrel. Bitcoin is up 0.2%.

In the world markets, the FTSE 100 is up 0.6% and the DAX is down less than 0.1%.

The biggest stock movers for the day premarket: Scholastic (NASDAQ: SCHL ) is down 18% after the company underperformed market expectations in Q1 with a top-line decline of 13%.

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