Hey everyone! Welcome back to this month’s market snack, here’s your recap for the month of July:
- S&P500: 2.54📈
- FTSE100: 0.44📉
- NASDAQ: 1.6 📈
- BTC: 11.5📈
A few decades ago the space race happened between entire countries, and now it’s happening between just a couple of billionaires? You’d think there’d be an olympic gold medal to be won!
Crypto also turnt up this month – you think Jeff Bezos saw it all the way up there on the moon?
US Stocks at Record Highs
We seem to be heading towards a strong end to the month. Of the S&P 500 companies – which consist of the largest companies in the US – 89% have topped earnings estimates, while 86% have exceeded revenue expectations. Alphabet, Google’s parent company, popped following its quarterly results indicating a 69% jump in advertising revenue and over 100% increase in net profit compared to Q2 of 2020. Boeing’s shares also climbed 4.2% after posting its first profit since 2019 implying a rebound in aircraft deliveries. Can we go to Maldives again?
Let’s play a quick game. Never have I ever lost 98% of my networth because of Chinese regulators. Et tu, Larry Chen?
Last week, China’s State Council imposed unexpected regulatory measures on the private tutoring sector, an industry worth $120 billion – which includes many overseas listed companies. The most notable one, Gaotu Techdu, which trades on the NYSE, saw its shares plummet by 60% overnight. The company’s CEO, Larry Chen has lost more than $15 billion since January of 2021 and is worth a cool $336 million. In fairness to him, never have I ever been worth $336 million.
Chen’s company isn’t the only one that took a beating, others include TAL Education Group (71%) and New Oriental Education & Technology Group (59%). The new regulatory measures by the Chinese government essentially prohibits companies that teach school curriculums from profiting, acquiring capital or going public. The unforeseen crackdown deprives their investors of making enormous exits from these companies – including hedge funds like Tiger Global Management to Temasek.
First Bitcoin, now education – it’s anyone’s pick as to which industry is next, but it seems to be a tumultuous past few months with China’s government introducing new and somewhat extreme measures.
Willis & Aon Scrap Merger Plan
This time around, when there’s a willis, there’s no way. Willis and AON – a British, American, and Irish multinational insurance company – agreed to terminate their all-stock merger agreement worth $30 billion. Had the deal gone through, it would’ve put them ahead of the world’s largest insurance company Marsh & Mclennan – creating an international powerhouse.
The “party pooper” in this deal was none other than the Department of Justice. Uncle Sam’s DOJ claimed that the merger would harm competition and eventually lead to higher prices due to the firm’s position. The DOJ even filed a civil antitrust lawsuit against the merger, and while AON CEO Greg Case believed they would win in court, the deal would’ve carried through only in 2022. Time is money after all.
Spotlight: SWVL is Winning this Chess Game with the Queen’s Gambit
The dubai-based company is the first Middle East $1.5B unicorn to list on Nasdaq US with the help of woman led SPAC Queen’s Gambit Growth Capital. Burj Khalifa lit up with the announcement late Wednesday night.