Banks face turmoil ahead of Q2 results




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Last Week’s Highlights

Macy’s up on buyout report

Macy’s stock surged 9.5% after reports indicated Arkhouse Management and Brigade Capital’s bid to buy the department store chain for $6.9 billion. The new proposal is to acquire Macy’s stock for $24.80 per share, representing a 43% premium. Macy’s ended a proxy contest with Arkhouse Management in April and added two of the activist investor’s nominees to its board. The board’s finance committee would oversee the evaluation of the proposal from Arkhouse and Brigade Capital. 

Paramount-Skydance merger

Paramount Global announced a merger with Skydance Media. The deal involves Skydance acquiring National Amusements for $2.4 billion and subsequently merging with Paramount, offering $4.5 billion to shareholders. The goal is to position the “new Paramount” as a “tech hybrid” and ensure content remains a priority. The merger would combine Paramount with its financial partner on recent major films and is expected to produce $2 billion in run-rate savings. Additionally, Paramount’s 2025 revenue is projected to reach $32.6 billion, with a 2% increase to $33.5 billion expected in 2027. 

Coming Up This Week

US banks down ahead of Q2 results

Last week, major banks such as Bank of America, Wells Fargo, and JPMorgan & Chase experienced a decrease in their stock prices, making the S&P 500 banks index drop 1.6%. The upcoming week will be highlighted by Federal Reserve Chair Jerome Powell’s testimony, U.S. inflation data, and earnings reports from American banks. JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America are scheduled to report their second-quarter earnings on July 12, while Bank of America will do so on July 16. JPMorgan expects earnings per share (EPS) of $4.69, which is slightly lower than the previous year; Citi and Wells Fargo forecast an increase, and Bank of America expects a decline to 79 cents from 88 cents a year ago. The commentary on the path of interest rates is anticipated to be a key focus during the earnings reports. 

Boeing rises after plea deal

Boeing has reached a plea deal with the U.S. Justice Department, agreeing to plead guilty to a criminal fraud conspiracy charge and pay a fine of $243.6 million. This resolves an investigation into two fatal crashes involving the Boeing 737 MAX aircraft. The plea deal has sparked criticism from victims’ families who wanted Boeing to face a trial and endure harsher financial consequences. As part of the deal, Boeing will also spend at least $455 million over the next three years to enhance safety and compliance programs. The agreement only covers Boeing’s conduct before the fatal crashes and does not include the incident involving a Boeing 737 MAX 9 jet during an Alaska Airlines flight. 

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