Equities opened higher on Tuesday, but couldn’t hold their gains. The S&P 500 ultimately slipped 2% in the stock market today.
Bulls continue to struggle with this area, as the index sits near last month’s high and a key retracement level. While many investors are hopping on board as they follow momentum, there are some concerns between the disconnect in stocks and the economy.
But that’s not stopping potential mergers and acquisitions.
Grubhub (NYSE:GRUB) shares exploded 29% on reports of Uber (NYSE:UBER) wanting to takeover the company. Uber has reportedly been trying to acquire Grubhub since earlier this year. While it’s unclear exactly how much Uber offered, the deal would bring together the two largest food-delivery companies.
Grubhub hasn’t denied or confirmed the reports. However, the company did say, “consolidation could make sense in our industry … we are always looking at value-enhancing opportunities.”
We’ll see, but a deal between the two wouldn’t be all that surprising.
Airline Trouble
As airline travel is basically nonexistent right now due to the novel coronavirus, Boeing (NYSE:BA) recorded a total of zero orders in April. In addition, customers cancelled another 108 orders for the 737 Max. It’s no surprise that Boeing is struggling with just 56 planes delivered this year, implying a 67% decrease from the previous year.
To add to the bad news, Boeing CEO Dave Calhoun predicts that it’s likely a major U.S. airline will go out of business this year. He believes that passenger traffic won’t be able to get back to 25% of the prior normal levels by September and maybe not 50% until December.
It’s no surprise that airlines were under pressure as a result. United Airlines (NASDAQ:UAL), American Airlines (NASDAQ:AAL), Delta Air Lines (NYSE:DAL) and Southwest Airlines (NYSE:LUV) all fell notably on the day.
Movers in the Stock Market Today
With Luckin Coffee (NASDAQ:LK) being investigated for sales fraud, the company is firing CEO Jenny Zhiya Qian and COO Jian Liu. In addition, the company also put six other employees involved on leave or suspension. For the time being, Jinyi Guo is acting CEO. Since April 7, Luckin’s stock has been on a trading halt.
Disney’s (NYSE:DIS) Walt Disney World is currently taking reservations starting July 1, while Disney Springs is on schedule to begin reopening in phases next week. This follows a similar approach for Shanghai Disneyland’s reopening. While the date is subject to change, this is potentially good news since the resort has been shut down since mid-March due to the pandemic.
Advertising to take a hit? According to recent reports, advertisers may start pulling the plug on TV ads. That includes big spenders like PepsiCo (NYSE:PEP), General Motors (NYSE:GM), General Mills (NYSE:GIS), Domino’s Pizza (NYSE:DPZ) and others. If that comes to fruition, it’s bad news for network companies like Disney, ViacomCBS (NASDAQ:VIAC), Fox (NASDAQ:FOX) and others.
Peloton Interactive (NASDAQ:PTON) shares climbed almost 8% to new 52-week highs in the stock market today. The move came on news that the company just passed 1 million connected fitness subscribers. With stay-at-home orders in place, Peloton has been seeing some of its best days in the market.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long DIS.