Airline stocks are headed lower after a U.S. judge blocked Jetblue (JBLU) from acquiring Spirit Airlines (SAVE). The block is unusual. It allowed the McDonnell Douglas acquisition by Boeing (BA) back in 1997. As arbitrageurs unwind their bet, SAVE stock loses half its value.
Stock markets will try to build a base after mild selling pressure the day before. Fed Governor Chris Waller believes the Fed may lower interest rates, as long as inflation does not rebound or stay elevated. The timing of the rate cut is questionable. The Fed’s decisions depend on incoming economic data. The biggest ETF trades today are SOXL, the 3X Bull semiconductor, SPDR S&P 500 (SPY), and the 20+ Year Treasury Bond (TLT).
In the restaurant sector, Restaurant Brand’s (QSR) purchase of the largest U.S. franchisee of Burger King will lift its competitors. Watch McDonald’s (MCD) and Domino’s Pizza (DPZ) today. Food suppliers like Coke (KO), Keurig Dr Pepper (KDP), and Pepsi (PEP) should perform well.
Among the market movers yesterday, First Solar (FSLR) may attract bottom fishers. Johnson Controls (JCI), which announced a new chief financial officer, sold the stock after the news.
After posting quarterly results, watch US Bank (USB) and Schwab (SCHW). After the market closes, Kinder Morgan (KMI), Discover (DFS), Alcoa (AA), and H.B. Fuller (FUL) will post quarterly results.
