Stock Market Live May 16: Cable Companies Are Concentrating, and the S&P 500 (VOO) Tries for Five
Key Points
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The S&P 500 is on course to record a fifth straight winning day on positive inflation news.
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Cable companies Cox and Charter Communications are merging in a $34.5 billion deal.
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This Dial Goes to 5
The Vanguard S&P 500 ETF closed Friday at 546.26, up 0.6% for the day. The Voo closed higher every day this week, and ends up 5.3% for the week.
All's Well That Ends Well
The Federal Communications Commission announced today that it has approved Verizon‘s (NYSE: VZ) acquisition of smaller telecom Frontier Communications (NYSE: FYBR). The acquisition, which was initially announced back in September, will see the nation’s largest telecom by subscribers get even bigger, at the cost of $9.6 billion plus the assumption of $10 billion in Frontier debt.
Jørgensen is Audi 5000
Novo Nordisk (NYSE: NVO) CEO Lars Fruergaard Jørgensen has left the building, or nearly so. The GLP-1 weight loss drug specialist announced this morning that its CEO will be leaving the company soon “per mutual agreement” after the one-time GLP-1 leader began losing market share to rival Eli Lilly (NYSE: LLY) over the past year. A search for a new CEO has begun.
Novo Nordisk stock meanwhile is down 3.7%. The Vanguard S&P 500 ETF , however, is positive again and up almost 0.1%.
President Trump to the Rescue Again?
Uh-oh. The S&P 500 is still barely in the green today, but the Vanguard S&P 500 ETF just dipped barely into the red, down 0.01%.
Investors are weighing a new budget proposal backed by the White House, which President Trump is calling “THE ONE, BIG BEAUTIFUL BILL” and promising that it will “cut Taxes for ALL Americans” and help revive the economy. So far the verdict seems uncertain, and the stock market isn’t convinced.
This article will be updated throughout the day, so check back often for more daily updates.
The Vanguard S&P 500 ETF (NYSEMKT: VOO) opened higher on Friday and is currently barely in the green, up less than 0.1%. If it can hold onto the gain for the next six-and-a-half hours, though, this will mean the market succeeded in rising all five days this week. Not a record, exactly, but certainly a nice trend.
Helping to keep the optimism going was a happy inflation report yesterday, when the U.S. Bureau of Labor Statistics reported a 0.5% sequential monthly decline in the producer price index for April. Annualized inflation according to this particular index is now 2.4%.
In markets news, privately-held cable company Cox Communications and publicly traded cable company Charter Communications (Nasdaq: CHTR) announced they will merge in a deal valued at $34.5 billion. The deal is structured to look more like an acquisition of Cox by Charter, with the former receiving $4 billion in cash, $6 billion in convertible preferred “units” exchangeable for Charter common stock, and 33.6 million common units, also exchangeable for Charter common stock.
Analyst Calls
Investment bank Oppenheimer is responding to the news by upgrading Charter Communications stock to outperform with a $500 price target.
Elsewhere in the market, HSBC removed its reduce rating on Carnival Corporation (NYSE: CCL) and upgraded the cruise line stock to hold. UBS similarly upgraded Caterpillar (NYSE: CAT) to neutral, citing reduced tariffs risk, and predicting “US non-residential construction will re-accelerate to 4% from flattish in 2025.”
The Swiss banker upgraded Vulcan Materials (NYSE: VMC) to buy. Carnival, Caterpillar, and Vulcan are all S&P 500 component companies.
Earnings
In earnings news, Wonder Bread-maker Flowers Foods (NYSE: FLO) reported $0.35 per share this morning, $0.03 less than expected.
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