2023-04-05 07:05:38 ET
Listen on the go! Subscribe to Wall Street Breakfast on Apple Podcasts and Spotify Trump SPAC Digital World ( DWAC ) drops amid former president's arraignment , delayed 10-K filing. Walmart ( WMT ) aims to have about 65% of its stores serviced by automation by 2026 end. J&J ( JNJ ) unit refiles for bankruptcy over talc litigation ; offers to pay $8.9B. Learn more about these stocks with Seeking Alpha Premium .
Below is an abridged transcript of the podcast
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Former President Donald Trump enters a not guilty plea on 34 counts in a Manhattan court. Digital World Acquisition falls 8 percent on the same day.
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Today is stock of the week Wednesday and we’re hearing from Zachary Marx…he works on the quantitative team at Seeking Alpha…he’s telling us about a company with five different operating segments. Nelnet is ticker symbol NNI.
- A Johnson and Johnson subsidiary refiles for Chapter 11 bankruptcy protection. LTL management was created to settle lawsuits associated with the company’s talc products.
OUR TOP STORY
Digital World Acquisition, which is taking Donald Trump's social media company and Truth Social app public, fell 8% Tuesday.
The former president was formally arraigned on charges related to alleged hush-money payments made during the 2016 presidential campaign.
The 45th president of the United States was arraigned and entered a not guilty plea on 34 felony counts of falsifying business records.
Digital World also announced on Monday that it had to delay filing its 10-K for the year ended Dec. 31.
DWAC expects to file its annual report within the 15 day grace period. The social media company expects to report a loss for 2022 of at least $10 million, which is "significantly" more than the loss for 2021.
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Johnson & Johnson subsidiary LTL Management, which was created to file for bankruptcy as a way to handle talc litigation, has refiled for Chapter 11 bankruptcy protection after its first attempt did not go as planned.
In addition, LTL says it will pay $8.9B over 25 years to resolve all current and future talc claims. The company previously offered $2B in its first bankruptcy filing in October 2021.
J&J said that it has support from more than 60K claimants on the offer.
The company added that the second bankruptcy filing is not an admission of guilt and it stands behind the safety of its products
Premarket JNJ is up nearly 3 percent.
A few articles were written Tuesday about JNJ. One is by Daniel Schonberger and it’s entitled Johnson & Johnson: Still One Of The More Expensive Pharmaceutical Companies. In the article, they rate the stock a hold. They say there are better picks in the market and despite its status as dividend king, a dividend yield slightly below 3% is also not so interesting in the current market environment.
Another article by Mark Roussin entitled, Johnson & Johnson: A Huge Opportunity In A Blue-Chip Dividend King. In the article, they rate the stock a buy. They say talc related issues have put pressure on the stock. The iReit on Alpha Investing Group leader says the lawsuits could cost the company billions, but the company is a money printing machine with strong cash flows, making any large settlement something the company can handle.
I’ll leave a link to both articles in show notes.
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NOW MORE ON THE MARKET
Tuesday, the Dow and S&P 500 broke a four-session winning streak, while the Nasdaq ended lower for the second consecutive session.
The Nasdaq finished -0.5%, the S&P 500 ended -0.6% and the Dow closed -0.6%.
Seven of the 11 S&P sectors finished in the red, led by a nearly 2.3% slide in Industrials. Energy, Financials and Materials each posted declines of more than 1%. On the other side of the spectrum, Utilities and Communication Services scored modest gains.
Andrew Hecht is a Seeking Alpha contributor, he says "Expect lots of volatility in markets across all asset classes as the economic and political landscapes remain highly uncertain."
Tuesday saw the release of the monthly JOLTS figures, which indicated that job openings dropped to 9.931M in February. This was much lower than the 10.4M total that experts had predicted and the first time the figure dropped below the 10M mark since May 2021.
The bond market saw another round of buying, with Treasury yields continuing a recent slide. The 10-year yield ( US10Y ) dropped 8 basis points to 3.35% and the more rate-sensitive 2-year yield ( US2Y ) declined 14 basis points to 3.84%.
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Today is stock of the week Wednesday and the stock in focus is Nelnet.
We’re hearing from Zachary Marx, he’s on the quantitative team at Seeking Alpha.
*audio from Zachary Marx*
And the fifth business segment Zachary said he’s most excited about is Nelnet renewable energy.
That audio you just heard is from the Investing Experts podcast. It’s available wherever you get your podcasts. It’s the show that highlights all the stocks everyone is talking about.
I’ll leave a link to the show where Zachary discusses another stock and this one has a hefty $18,000 price tag.
MORE OF OUR TOP STORIES
Walmart said that it aims to have roughly 65% of its stores serviced by automation by the end of fiscal year 2026.
The news comes after reports that the U.S. retail giant was cutting over 2K jobs at five of its e-commerce warehouses.
The company announced the update on Tuesday while kicking off its two-day investment community meeting.
Walmart also reiterated its Q1 and FY guidance for 2024.
Walmart also said it expects that about 55% of its fulfillment center volume will move through automated facilities by the end of fiscal year 2026, and unit cost averages could improve by approximately 20%.
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Compass Minerals disclosed Tuesday that it terminated 48.5 full-time employee positions , or ~16% of its workforce.
This was part of cost control measures as it focuses on maximizing the profitability of its core Salt and Plant Nutrition businesses.
The company said it expects to incur $3.3M in charges during FY 2023 related to the job cuts, with ~$2.8M to be recognized in the quarter ended March 31.
Earlier this year, the Seeking Alpha Quant rating system added a note to the stock that says it is at high risk of performing badly. If you’ve heard me say this before and you’ve wondered the rationale behind the decision, it’s all laid out for you. I’ll leave a link in show notes that explains it all. It even gives you alternatives to CMP.
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Exxon Mobil's (NYSE: XOM ) Q1 operating profit pulled back from last year's record levels, according to an 8-K filing released Tuesday, as oil and gas prices cooled off compared to the final quarter of 2022.
Q1 operating profit from the oil and gas business is expected to drop by $1B-$1.8B from the $8.2B amassed in Q4 2022, while unsettled derivatives could hit profit by $1.8B-$2.2B in the latest quarter.
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Granite (NYSE: GVA ) said Tuesday it got a ~$126 million contract from NAVFAC Pacific for the construction of buildings and infrastructure which will support the relocation of U.S. Marines from Okinawa, Japan.
The new infrastructure is expected to be built at a Marine Corps Base ( MCB ) in Guam.
The project will begin this month and is expected to be completed by December 2025.
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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 red. The Dow is down 0.1%. The S&P 500 is down 0.2% and the Nasdaq is down 0.1%.Crude oil is down 0.4% percent at more than $80 a barrel. Bitcoin is up 1% at $28, 521 dollars.
In the world markets, the FTSE 100 is up 0.4%. The Dax is down 0.2%.
On today’s economic calendar, at 9:45 am the PMI Composite Final and at 10:30 am EIA petroleum inventories.
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Wall Street Breakfast Podcast: Digital World Drops Amid Trump's Arraignment