Thursday Morning Rebel Brief: GME Splits. JPM: No Recession. SGEN Buyout Rumors.

Good morning Rebels! The market is set to open slightly higher this morning, with all indexes trading in the green by less than a percent. Markey action has been choppy lately as investors wait for the data from the July 13th CPI Report, the July 14th kickoff to earnings season, and July 26th and 27th FOMC Meeting! 

As investors bide their time, let’s take look at what’s happening across the market. 

GameStop Announces 4:1 Split

If there’s one stock with an investor base that cares about artificial moves like a stock split… it’s likely GameStop. The stock is trading higher by more than 5% this morning at $124.88 — or, a split-adjusted $31.22! 

JPMorgan: We are not in a Recession

JPMorgan offered a counter-argument to the “we are currently in a recession” thesis posed by many from Cathie Wood to Elon Musk to Cardi B. 

“While some may argue the US is already in recession .. this is inconceivable for a labor market that has generated close to 500k average monthly gains for the past six months.”

While recessions are often boiled down to “two consecutive months of negative GDP growth”, that’s often just half of the recipe. In the 12 recessions that have occurred since World War 2, all have included a rise in unemployment during the recessionary period. As it stands thus far — that’s not happening. Despite GDP falling into the negative for the first quarter and potentially the second (if you believe Atlanta’s GDPNow estimate), the jobless rate has fallen during the same period — from 4% to 3.6%. 

Maybe JPMorgan is onto something, or maybe this is a strange leftover from the Covid-19 economy and “The Great Resignation”.

Rebel Trivia Question of the Day: Think you know your stock market facts?

Where was the first stock exchange located in the United States?

The answer can be found at the bottom of this article!

US House Prices Likely to Fall as Mortgage Rates Rise

In another potential sign that inflation is easing and that the Fed is doing it’s job, US housing prices look like they’re ready to fall for the first time in a while. According to Capital Economics, mortgage rates higher than 6% are damaging the affordability of homes for most home buyers. According to the fund and senior property economist Matthew Pointon, by the middle of next year home and property prices could decline 5% from where they sit currently. This is a new outlook for the property economist, who previously had projected no change in value.

Seagen Rises on Buyout Rumors

According to the Wall Street Journal, Merck (MRK) is in “advanced talks” to buy out Seagen (SGEN), a biotech company, for more than $200 per share at a valuation of roughly $40 billion. The stock is currently trading higher by more than 3%.

Bed Bath & Beyond Rises on Insider Buying

After reporting an objectively awful quarter which saw the immediately exodus of the CEO, Bed Bath and Beyond shares are trading higher this morning by nearly 6%. This comes as several insiders disclose purchases of the stock, including Interim CEO Sue Gove as well as board members Harret Edelman and Jeff Kirwan. The three bought a combined 70,000 shares recently, which in the grand scheme of things, are only valued at a combined $312,900 (according to Wednesday’s closing price). 

Rebel Trivia Answer: 

The answer to today’s question:

Where was the first stock exchange located in the United States?

Philadelphia, Pennsylvania! New York is the hub of most stock market action, so you might have thought that was the answer, but the Philadelphia Stock Exchange (founded in 1,790) predated the New York Stock Exchange by two years — making it the first stock exchange in the United States!

For more quick takes on this morning’s market-moving news, check out 60 Seconds With Jon Najarian!

https://twitter.com/jonnajarian/status/1545033706108239872

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