Today in the Market (6/12/2023)

Good Evening! On Monday, the stock market experienced a surge in prices, marking the beginning of a hectic week for the US economy. The week is expected to witness the release of inflation data on Tuesday and the Federal Reserve’s policy decision on Wednesday afternoon.

To start this week off, the Nasdaq Composite saw the most significant increase, rising by 1.53%, while the other indices also experienced gains. The S&P 500 increased by 0.93%, while the Dow Jones rose by 0.56%.

PACK YOUR BAGS

Carnival Corp.’s stock (CCL) showed a notable increase in the cruise line industry, following an upgrade from Bank of America (BofA) analysts. The analysts observed that demand is currently on an upward trajectory, and in certain instances, has exceeded levels observed prior to the pandemic.

So what does that mean? Carnival has been upgraded by Bank of America from Neutral to Buy, with an increase in its price target from $11 to $20. The author of the article increased the price targets for Royal Caribbean (RCL) and Norwegian Cruise (NCLH) lines while maintaining a Neutral rating for both entities.

So what is backing up the upgrade? According to its proprietary data, Bank of America has observed a notable level of robustness in the sector of cruise expenditures. BofA has observed that the expenditure of travelers on cruises in May has increased by 17.3% as compared to the corresponding month of 2019. On top of that, there has been a consistent monthly increase in spending of at least 11.0% since December

A ROADBLOCK AHEAD

According to a report by Bloomberg, the acquisition of Activision Blizzard (ATVI) by Microsoft (MSFT)will soon be contested by the Federal Trade Commission (FTC). Microsoft has faced previous lawsuits from the FTC, however, the current agreement is still under examination.

A refresher. In December 2022, the FTC initiated a lawsuit contesting the $69 billion acquisition of Activision Blizzard, citing concerns that the transaction would provide Microsoft with the ability to hinder competitors to its Xbox gaming consoles, as well as its expanding subscription content and cloud-gaming enterprise.

However, this deal has made great progress in the last year! Microsoft obtained approval from Europe’s antitrust regulator, despite the rejection of the identical plan by regulators in the United Kingdom. Also, Microsoft is currently trying to appeal against the decision made by the Competition and Markets Authority (CMA). (Acquisitions have a lot of steps…)

The biggest boss is Time Though… The commencement of the trial is scheduled for August 2nd, however, it is unlikely that an outcome will be reached until the conclusion of the year. However, The timeline for the finalization of the merger agreement between Microsoft and Activision Blizzard is currently under time constraints, with an expiration date set for July 18th. There is hope for an extension of the agreement, but it is dependent upon Activision Blizzard’s decision

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