Scott Olson
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Apple (AAPL) WWDC 2023 preview: Mixed reality headset likely to be the star (00:55). Saudis to cut another 1M bbl/day while OPEC+ extends reductions into 2024 (02:18). Novo Nordisk (NVO) in talks to acquire French medical device maker Biocorp (03:05).
This is an abridged transcript of the podcast.
- Apple’s Worldwide Developer Conference starts today. The mixed reality headset is likely to be the star of the show.
We’ve got the latest on OPEC+. Saudi Arabia is cutting another 1M bbl/day in crude oil starting next month.
Novo Nordisk is in talks to acquire Biocorp. The deal is valued at 154M Euros.
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OUR TOP STORIES
Apple (NASDAQ:AAPL) is slated to host its annual developers conference this week and all expectations are that the company will finally take the wraps off its long-awaited mixed reality headset.
The device is likely to be the tech giant’s first major product expansion in years, following the 2015 unveiling of the Apple Watch.
Many industry watchers expect the device, which could cost as much as $3,000, will surpass devices already available from competitors such as Meta Platforms (META), Sony (SONY) and others.
Even though they expect the device to be announced at the conference, it may not go on sale right away to give developers a chance to build apps and features for it.
The mixed reality headset is expected to launch with both augmented and virtual reality technologies with an option to switch modes; come with an external battery that can be worn on a person’s body; have a lightweight design similar to ski goggles; incorporate Apple’s (AAPL) processors and have its own dedicated operating system, along with its own App Store and apps.
Apple (AAPL) is also expected to unveil new MacBooks and show off updates to its various operating systems – iOS, iPadOS, macOS, watchOS and tvOS.
Apple’s (AAPL) Worldwide Developers Conference is slated to run from today, June 5 to June 9.
Year to date AAPL is up more than 44 percent.
Saudi Arabia said Sunday it will make an additional voluntary cut of 1M bbl/day of crude oil starting in July.
This is part of a new OPEC+ agreement that includes an extension of voluntary cuts through 2024.
The move would come on top of the 500K bbl/day voluntary cut announced in April.
It reduces total Saudi production to 9M bbl/day, which would be its lowest output level since June 2021.
OPEC+ also said in a statement it will keep official production targets unchanged for the rest of this year.
It will also limit combined oil output from January-December 2024 to 40.46M bbl/day.
We’ll check crude oil prices in just a few minutes.
Novo Nordisk (NVO) said today that it has entered into exclusive negotiations for a controlling stake in French company Biocorp. This would be followed by a tender offer on all remaining outstanding shares in Biocorp at €35/share in cash, representing a total equity value of €154.4M.
Biocorp specializes in the development and manufacturing of delivery systems and medical devices.
If the deal goes through, shares of Biocorp will be delisted from Euronext.
The most recent article on NVO was published earlier this morning by analyst Felix Fung. In the article they highlight the company’s dominance in obesity and diabetes medications.
You can check out the article with a Seeking Alpha Premium account. Premium will cost you less than 5 dollars for the first month. Just go to seekingalpha.com/subscriptions to sign up.
UBS (NYSE:UBS) expects to complete its $3.25B acquisition of Credit Suisse (CS) as early as June 12.
Credit Suisse shareholders will receive one UBS share for every 22.48 outstanding shares held.
Big U.S. lenders like Morgan Stanley (NYSE:MS) may soon face revised capital rules following the collapse of smaller regional players earlier this year.
According to the Wall Street Journal, overall capital requirements could be raised by about 20% at institutions with at least $100B in assets.
This is compared to the current $250B threshold that regulators currently reserve for their toughest rules.
Credit card giants that are heavily dependent on fee income, such as American Express (NYSE:AXP), could also be impacted, as well as those involved in investment banking and wealth management.
Regulators, including the Federal Reserve, FDIC and the Office of the Comptroller of the Currency, are on track to propose the changes as early as this month.
Sony’s (NYSE:SONY) CEO downplayed the risk that cloud gaming will have on the videogame console market, saying that cloud gaming is still technically “very tricky.”
Kenichiro Yoshida said in an interview with the Financial Times on Saturday that he thinks “cloud itself is an amazing business model, but when it comes to games, the technical difficulties are high.”The Sony (SONY) CEO’s comments come as Microsoft’s (NASDAQ:MSFT) planned $69 billion takeover of Activision (NASDAQ:ATVI) hangs in the balance as the UK’s antitrust authority has sued to block it, citing concerns about the cloud market.
Mallinckrodt (NYSE:MNK), which filed for bankruptcy in October 2020 amid a settlement related to opioid liabilities, is considering options, including filing for bankruptcy again.
According to a WSJ report late Friday, which cited people familiar with the matter, the potential filing comes as a $200 million payment for an opioid settlement is due within weeks.
The drugmaker is required to make the payment to an opioid-victims compensation trust by the middle of the month under a $1.7 billion settlement.
According to the report, a lender group has been in talks with Mallinckrodt (MNK) about how it plans to deal with the upcoming payment.
Premarket MNK is down nearly 19 percent.
Now an update on a story we told you about last month here on Wall Street Breakfast.
Mediterranean-themed restaurant chain Cava Group (CAVA) is set to launch a roadshow for its initial public offering as early as Tuesday.
According to a WSJ report that cited people familiar with the matter, Cava (CAVA) plans to sell shares for $17 to $19, which at the high end would value the fast casual eatery at $2.2 billion.
If the roadshow is successful, CAVA is expected to start trading on the NYSE the following week.
Cava (CAVA) is based in Washington, DC, and had 263 restaurants in 22 states and DC as of mid-April. The chain has been operating in the red, reporting a net loss of $59 million on revenue of $564 million for 2022.
A few items to look out for in our catalyst watch for the day. Cisco (CSCO) will hold its four-day Cisco Live! IT event in Las Vegas. CEO Chuck Robbins will be one of the key speakers. The 3M (MMM) firefighting foam trial is slated to begin today. There are reports a settlement is in the works. Lumen Technologies (LUMN) will hold an investor day event to discuss the company’s key priorities, initiatives, and outlook. You can find a full list of catalysts for the week in our weekly catalyst watch article. It’s published every Friday around 3pm for the upcoming week.
I’d like to unpack a term we use a lot on the podcast. Some of you may not know what I’m talking about when I say Premium or a Seeking Alpha Premium account. So what is it? Premium helps you with your investing decisions. It helps you compare and track your stocks, it helps you find those companies that you may not have ever heard of, it also gives you access to the articles I mention here on the podcast and a host of other things that I wish I had time to talk about.
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Solid gains on Friday.
The Dow (DJI) led the three major averages, gaining 2%. The S&P 500 (SP500) added 1.5% and the Nasdaq (COMP.IND) advanced 1%.
All 11 S&P sectors ended trading in the green, led by a more than 3% jump in Materials.
The latest nonfarm payrolls report gave some conflicting signals. On the one hand, the headline number came in significantly higher than expectations. On the other hand, the unemployment rate ticked up to 3.7% from a prior reading of 3.4%.
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 mixed. The Dow is up a tiny fraction, the S&P 500 is down 0.04% and the Nasdaq is down 0.2%. Crude oil is up less than 2% at more than $73 a barrel. Bitcoin is down 1.7%.
In the world markets, the FTSE 100 is up 0.6% and the DAX is down a tiny fraction. Trading is closed for the day in New Zealand to observe the King’s Birthday.
On today’s economic calendar, at 10am factory orders. Also at 10am, the ISM service index.
Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.
