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Today in the Market (4/17/2024)

Good Morning! On Wednesday, the U.S. equity market declined as investors were concerned about interest rates paired with a new round of corporate earnings results, making it difficult for the market to recover.

The NASDAQ led the way in losses by 1.15%, followed by the S&P 500 declining by 0.58%, and lastly, the Dow Jones falling by 0.12%.

A SLOWDOWN

The biggest equipment provider to computer chip manufacturers, ASML (ASML), revealed lower-than-expected first-quarter new bookings but continued sales to China in defiance of restrictions spearheaded by the U.S.

  • Revenue: $5.62 Billon vs. $5.87 Billon Expected
  • Operating Margins: 26.3% vs. 32.7% compared to last quarter
  • Earnings Per Share: $3.30 vs. $3.15 Expected

Why the slowdown? According to the earnings report, major semiconductor companies like Intel (INTC), Samsung, and Taiwan Semiconductor are taking their time to modernize their equipment in anticipation of the surge in demand for AI. The projection provided by ASML also pointed to a continuation of the year-over-year sales reduction.

Should investors be worried? Since ASML’s business is often erratic, the slowdown is not concerning. Nonetheless, given that the price has risen in tandem with the larger AI boom since last October, a fall in the stock appears appropriate. 

TICKET PLEASE!

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According to the Wall Street Journal, the Department of Justice (DOJ) intends to file a lawsuit against Live Nation in the coming weeks, accusing the entertainment corporation of exploiting its control over tickets.

Let’s back up to see how this happened! In 2010, Live Nation and Ticketmaster merged, which irritated artists and independent promoters. As part of the merger, the two companies agreed to the terms set by the DOJ to safeguard competition. However, in 2019, the DOJ modified its agreement with the corporation to include an anti-retaliation provision after the emergence of information about Live Nation’s forceful methods in pressuring venues to use Ticketmaster

How did we see this coming? Well, first, Ticket Master controls over 80% of the market share for primary ticket sales. Second, the DOJ has been looking into Live Nation and Ticketmaster even before the Eras Tour ticketing controversy. Live Nation’s director of corporate relations, Dan Wall, defended Ticket Master by arguing that it is not a monopoly and that ticket prices are determined by artists, not corporations.

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