News Corp sells News America Marketing for up to $US235m
News Corp has sold its coupon publishing business to private equity firm Charlesbank Capital Partners for up to $US235 million.
The sale of News America Marketing will see News Corp receive $US50 million on closing and deferred cash payments of between $US125 million and $US185 million.
The deferred consideration is payable on or before the fifth anniversary of closing.
News Corp has an option to retain up to 15 per cent of the equity in the business, composed of 5 per cent at closing and a 10 per cent five year warrant.
The author owns shares in News Corp
Transurban withdraws guidance
Toll road operator Transurban has withdrawn its existing distribution guidance due to the heightened uncertainty resulting from the government shutdown measures enacted across its markets.
The company said it was withdrawing its existing distribution guidance for the six months to 30 June 2020 and advised that it expected to pay its second-half distribution in line with free cash excluding capital releases.
The company said it had sufficient liquidity to meet its capital requirement and debt refinancing obligation to the end of the 2021 financial year.
Dow Average suffers worst quarter since 1987
US stocks sank, bulging the Dow Jones Industrial Average’s loss in the quarter to a level not seen since 1987 as the pandemic almost certainly plunged the American economy into recession.
The blue-chip index tumbled 23 per cent in the three months, closing the session with a 1.8 per cent drop. The S&P 500 fared little better, even after a furious, weeklong 17 per cent rally that halted Tuesday.
The Nasdaq 100 fell least among major indexes, as dip-buyers targeted the cash-rich tech megacaps that make up its core. The Russell 2000 plunged 31 per cent in the quarter, the most in data going back to 1979.
There was almost nowhere to hide for Dow investors, as all but one of the 30 members ended lower for the year.
Boeing plunged 54 per cent, while Chevron and Exxon sank at least 39 per cent after oil suffered its worst quarterly beatdown on record. Microsoft fared best, ending higher by 0.01 per cent.
Risk assets around the world tumbled in the period as governments instituted unprecedented shutdowns in large swaths of the global economy to combat the spread of the deadly coronavirus.
Massive government spending and monetary stimulus lifted US stocks from a rout that reached 33 per cent, but the hit to GDP is shaping up to be monumental, with Goldman Sachs now forecasting a 34 per cent contraction in the second quarter before a sharp rebound.
Bear market bounce? Count on it: LPL
LPL Financial said the ‘bounce’ in US equities after having fallen into a bear market is almost certain to prove illusory.
“The recent bounce has bulls feeling pretty good given how bad they felt just a week ago,” LPL strategist Ryan Detrick said in a note.
“But the reality is many major bottoms over the years tend to see a retest the previous lows, and big moves higher are the hallmark of bear markets.”
Mr Detrick pointed to data from Strategas Research Partners to bolster his case: during the 3-year bear market after the tech bubble burst in the early 2000s, the S&P 500 bounced more than 10 per cent different 6 times on the way to falling 49.1 per cent.
During the financial crisis when the S&P 500 lost more than 56 per cent, stocks bounced more than 10 per cent three times, with a huge 27 per cent rally in late 2008 eventually faltering.
“In other words, big bounces are quite normal, even during bear markets.”
There have been 9 bear markets that officially lost 20 per cent since 1950, and the average maximum bear market bounce during those bear markets was 14.5 per cent.
“Although we are optimistic that stocks are carving out a major low, it probably won’t be an easy ride and a potential move back to the recent lows can’t be ruled out,” Mr Detrick said.
Trump calls for second $US2 trillion stimulus package
An infrastructure bill would likely have bipartisan support, with Democrats long interested in passing a major infrastructure bill.
Democratic House Speaker Nancy Pelosi has expressed her desire for funding to be focused on expanding broadband access and overhauling water supplies.
A $US2 trillion spend would be the equivalent of 10 per cent of US GDP.
Europe firmer; Wall St falls
Here are the overnight market highlights:
- AUD -0.4% to 61.48 US cents
- On Wall St: Dow -1.8% S&P 500 -1.6% Nasdaq -1%
- In Europe: Stoxx 50 +0.8% FTSE +0.2% CAC +0.4% DAX +1.2%
- Spot gold -1.7% to $US1594.22 an ounce at 1.10pm New York time
- Brent crude -0.1% to $US22.73 a barrel
- US oil +0.7% to $US20.22 a barrel
- Iron ore +0.4% to $US83.32 a tonne
- Dalian iron ore +0.9% to 650.5 yuan
- LME aluminium +0.2% to $US1533 a tonne
- LME copper +3.5% to $US4935.50 a tonne
- 10-year yield: US 0.66% Australia 0.74% Germany -0.48%
Good morning and welcome to Markets Live for Wednesday.
This blog is not intended as investment advice.