Futures higher, Michael Kors & Coach deal derailed, Apple cut to sell
The day has barely started and I’m already late. My inbox stopped accepting new emails at 11am yesterday. Something about having too many emails. So I spent the morning deleting over 2,000 of them. Seemed to do the trick, now I only have 34,677 unread emails. Pic for proof:
TGIF: Futures are higher after the S&P 500 put in its first positive showing of the week yesterday. Depending how today’s session goes we could snap a six-week winning streak if we put in a weekly loss here. Later today we will get a read of sentiment in the US with the University of Michigan indicators out at 10am. Will be interesting to gauge ahead of elections. In Canada, we just got a read of retail sales from August (honestly why can’t we get timely data, it’s almost November). Anyway, sales excluding autos plunged for the month of August. The flash estimate suggests sales perked up in September. Recall, the Bank of Canada began cutting rates in June, so the data doesn’t full reflect that yet.
Not in the bag: Shares of Capri Holdings are getting cut in half after a judge blocked the takeover by Tapestry. Capri (which houses Jimmy Choo, Versace and Michael Kors) got the takeover offer from Tapestry (Coach, Kate Spade, Stuart Weitzman) more than a year ago. The ruling is a win for the Federal Trade Commission which has been aggressive in stopping takeovers they think will reduce competition. The judge in this case ruled that the combination of these two companies would lead to nearly 60% control of the “accessible luxury” market. Both companies are going to appeal but this win for the FTC has investors nervous about other potential deals. Shares of grocery store Albertsons are down a bit right now as the FTC has sued to block Kroger from buying it.
Foot fetish: The owner of UGG boots and Hoka running shoes is up 13% in the early trade. Deckers sold more shoes than expected in the quarter and boosted its outlook for sales. Hoka was the star performer, with sales up 35%. UGG boots were no slouch, with sales up 13%. As a Western University alum, it brings me comfort that what was an essential part of the “UWO girl” uniform is still relevant. IYKYK.
Struggle bus: I’ll watch shares of Corus at the open after sales fell more than expected. The 20% drop in revenue was due to continued weakness in its TV division and that same old song about weak ad spending. I really hate to beat up on this one because its already down 77% so far this year. Of course, it remains potentially interesting because of rumoured interest from Quebecor.
Notable calls: Apple has been cut to sell at KeyBanc as the analyst worries that growth expectations are too high. Apple is expected to put in its best pace of growth in three years, and the analyst thinks that is too aggressive. He is in rare company, there are only three sells on Apple against 39 buys and 18 holds. Newmont is catching a downgrade at Scotia after dropping nearly 15% yesterday. The stock took a hit because even though gold prices are at a record, costs are proving difficult to contain. Scotia is not buying the dips here warning that costs are going to continue to be a problem and they don’t like lack of disclosure around how recently acquired assets are performing. Citi is upgrading embattled restaurant chain Denny’s to buy. This upgrade caught my eye because the stock is trading at the lowest level since the pandemic, there were bankruptcy concerns, and it announced it will be shutting 150 stores. Citi says its worth a buy here because their turnaround initiatives look promising and the store closures are actually part of investors wish list. Price target implies 20% upside.
