1) Rocket Companies Inc., the parent company of Rocket Mortgage and Quicken Loans, is trying to raise $2 billion dollars with an IPO (Initial Public Offering) after an initial capital target of $3.3 billion dollars. The reduction in the number of shares offered is believed to be because of push back from investors, who considered the valuation of the company as to high. This is based on the company being more of a consumer based company rather than a technology based company. The downsizing may signal that the IPO market’s rebound is straining as the coronavirus pandemic deepens in America.
2) Entertainment giant Disney has announced that its streaming service Disney+ (pronounced Disney plus) has surpassed 60 million subscribers, which is well ahead of Disney’s target. Disney forecasted having 60 to 90 million subscribers by 2024, fueling speculation that Disney+ has won the first stage of the streaming wars. Netflix presently has 193 million paying subscribers, but with Disney+, which was just launched last November less than a year ago, it’s clear that Disney is very rapidly gaining on Netflix, and liable to be passed by Disney in the near future. More importantly, Disney should reach profitability very soon too, something hard for new streaming services to do.
3) The ‘Services PMI’ index from the Institute for Supply Management, posted its second monthly gain in July. This indicated that despite the rising number of Covid-19 cases, the services economy keeps recovering. There is a continued weakness in the international component of services with worries of how the international economy will eventually effect America’s recovery. Investors remain focused on earnings and hopes of a vaccine to push the economy upwards more. There is still the looming question of how many of the small businesses will survive the pandemic, and therefore how much of the economy will be changed by their demise.
4) Stock market closings for – 5 AUG 20:
Dow 27,201.52 up 373.05
Nasdaq 10,998.40 up 57.23
S&P 500 3,327.77 up 21.26
10 Year Yield: up at 0.54%
Oil: up at $42.20