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DJ Global Equities Roundup: Market Talk

· 02/05/2021 18:19

The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.

1816 EST [Dow Jones] -- Chipotle Mexican Grill Inc. is preparing for an increase in the federal minimum wage, Chief Financial Officer Jack Hartung said Thursday. "We assume it will happen and we are prepared for it," Mr. Hartung said, adding that the restaurant chain would look to pass on some of the cost increases to its customers. President Joe Biden during the election campaign proposed raising the federal minimum wage to $15, up from $7.25 currently. Chipotle pays its restaurant workers on average $12 to $13 per hour, Mr. Hartung said. (Nina.Trentmann@wsj.com)

1818 ET - An abundance of blank-check entities with a mandate to buy private businesses means SPACs managers may need to reduce some gains in future deals, says Patrick Galley, from RiverNorth, which invests in SPAC IPOs. "Private companies looking at going public are meeting with five, 10 different SPACs," he says, adding that SPAC managers "are going to get creative," and give up some of the proceeds, known as "promote," that they usually get in the deals. "It's inevitable that it'll start to slow down, it has to. I don't think that it's feasible to keep it at this pace." (paulo.trevisani@wsj.com; @ptrevisani)

1810 ET - SPACs could face a lack of private firms to buy, as the special-purpose acquisition companies multiply, RiverNorth's Patrick Galley tells WSJ. SPACs are created with the sole purpose of using funds raised in an IPO to buy, usually within two years, a private company, which then takes the SPAC's place in the stock market. Inevitably, Galley says, more SPACs will fail to find a target. He deems realistic that about 20% of "the almost 300 SPACs that are out there," won't find a target, "especially if the public markets falter within the next two years." But for now, "markets are all systems go and there's little to stop them." (paulo.trevisani@wsj.com; @ptrevisani)

1804 EST [Dow Jones] -- Kroger Co. said it will offer $100 to employees who receive the Covid-19 vaccine. Employees who can't receive the vaccine because of medical or religious reasons will have the option of getting the payment by completing a course. Separately, the grocer said it is investing $50 million to reward employees by giving them $100 store credit and rewards points. (jaewon.kang@wsj.com)

1757 ET - The equity markets' ebullience is spilling onto SPACs, RiverNorth's Patrick Galley tells WSJ, with bullish investors paying a premium ahead of uncertain deals, exposing them to losses if the blank-check entity fails to buy a private business. Galley says currently 100% of SPAC shares trade above trust value, or the amount raised in the SPAC's IPO, up from 26% in October. Only the money in the trust is to be returned to investors if no deal is clinched. "You are overpaying for something on an expectation, or maybe better said, a speculation that it's going to appreciate significantly after they make an announcement. That's priced for perfection." (paulo.trevisani@wsj.com; @ptrevisani)

1748 ET - Lockheed Martin secures $479M deal for five more Sikorsky helicopters that will join the White House fleet to serve as the future Marine One. The company is building 23 helicopters for the Marine Corps to transport the president, vice president, cabinet members and other dignitaries as part of a $5B refresh. The company had previously said the first of a previous order batch would be delivered to enter service this year. (doug.cameron@wsj.com; @dougcameron)

1740 ET - The benchmark S&P/TSX Composite Index rises 0.5% to close at a record 18135.90, up 4.6% for the week. The blue-chip S&P/TSX 60 Index gains 0.4% to a record 1073.65, ending the week 4.6%. higher as well. BlackBerry among the most active stocks, finishing up 8.3%. (maria.armental@wsj.com; mjarmental)

1727 ET - The IPC stock index closes down 0.1% at 44146 points, but ends the week with a 2.7% gain. The peso recovered ground to trade at 20.09 against the US dollar from 20.40 Thursday. In the week ahead, the central bank holds its first monetary policy meeting on Thursday, and is widely expected to cut the overnight interest target to 4% from 4.25%, resuming the easing cycle after two meetings on hold. Banorte foresees a split decision considering higher inflation in January, with one or two of the five board members voting to keep interest rates steady. (anthony.harrup@wsj.com)

1716 ET - Lawmakers in Virginia appear poised to pass consumer privacy legislation, which would make the commonwealth the latest domino to fall in a state-by-state push for data protections. The Senate of Virginia passed the Consumer Data Protection Act Friday, two days after the House of Delegates passed its version of the bill. After the chambers consult on their counterparts' proposals, lawmakers say final legislation could reach the governor's desk within weeks. (david.uberti@wsj.com)

1644 ET - Falling commercial jetliner and engine sales accounted for almost a quarter of the drop in all US goods exports and more than half that in capital goods last year. The latest Commerce Department update highlights the impact of falling Boeing deliveries and shipments of GE engines on the broader economy. Aircraft exports fell $27.4B and aircraft engines dropped $18.4B. Aerospace imports declined almost $18B from a year earlier. (doug.cameron@wsj.com; @dougcameron)

1630 ET - Estee Lauder is in talks with Target and Kohl's about selling beauty products in certain stores, CFO Tracey Travis said Friday in an interview. Estee Lauder, which has long eschewed mass-market retail channels, would only sell its beauty products at Target and Kohl's locations that have an Ulta or Sephora inside. Ulta has recently announced plans to open locations inside Target stores and Sephora is doing the same at Kohls. Travis says the move reflects a shift by consumers, hastened by the pandemic, away from department stores. (Sharon.Terlep@wsj.com)

1338 ET - Activision Blizzard shares rise 9.5% to $101.46 as its full-year outlook exceeds Wall Street expectations. The videogame company said it projects net bookings to grow to $8.45B from $8.42B last year and implied adjusted profit to grow to $3.60 a share from $3.47 a share last year. Activision said it will launch two mobile titles in the next several months. Analysts cited confidence in existing popular franchises such as Call of Duty, World of Warcraft and Candy Crush being able to continue to drive growth. Wedbush raises its price target for Activision to $125 from $104; Piper Sandler to $120 from $97; MKM to $115 from $105; and Oppenheimer to $110 from $95. (sarah.needleman@wsj.com; @saraheneedleman)

(END) Dow Jones Newswires

February 05, 2021 18:19 ET (23:19 GMT)

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