U.S. stock futures are rising in the third quarter. Shares of parts supplier Spirit AeroSystems (SPR) surged after Boeing (BA) said it would buy the parts supplier for $4.7 billion in stock and pay compensation to Airbus to take over some of Spirit’s assets. The U.S. Department of Justice reportedly plans to file criminal fraud charges against Boeing in two fatal crashes and force the company to choose whether to plead guilty or go to trial. Meta Platforms’ (META) “pay or consent” advertising model may have violated the European Union’s Digital Markets Act (DMA). BlackRock (BLK) buys British data group Preqin for $3.2 billion in cash. Here’s what investors need to know today.
1. U.S. stocks set to rise in the second half of 2024
US stock futures are rising in premarket trading as we move into the second half of 2024. The market is wrapping up a strong second quarter marked by investor enthusiasm for artificial intelligence (AI) and softening inflation data that is raising Wall Street expectations of at least one interest rate cut later this year. AI demand has helped fuel semiconductor design company Nvidia’s (NVDA) 36% second-quarter gains and Apple’s (AAPL) recovery from a slump in the first quarter, with both tech giants now valued at more than $3 trillion, placing them among the outliers alongside Microsoft (MSFT). But weakness elsewhere in the market was also evident. Six of the 11 S&P 500 sectors have lost market capitalization in the three months through June. This is a shortened week for the holidays, with markets closing early on Wednesday and remaining closed on Thursday for Independence Day.
2. Boeing will buy back Spirit AeroSystems for $4.7 billion.
Boeing (BA) shares jumped more than 4% in premarket trading after the company said it would buy back shares of parts supplier Spirit AeroSystems (SPR) for $4.7 billion, or $37.25 a share. Boeing, whose stock price has been steadily declining, said it would buy Spirit, which it spun off in 2005, for $8.3 billion, including debt. Boeing has been struggling since a door plug on a 737 Max 9 plane exploded in mid-air in January. As part of the deal, Spirit will sell some of its European assets to Boeing rival Airbus for a nominal $1, including a compensation of $559 million, the European planemaker said.
3. Boeing is expected to face criminal charges from the Department of Justice.
Separately, the U.S. Department of Justice (DOJ) is reportedly planning to file criminal charges of fraud against Boeing over the two fatal crashes and ask that it plead guilty or face trial. Reuters The Justice Department’s proposed plea deal includes a $487.2 million penalty, half of which it said would be deducted from an earlier settlement. The Wall Street Journal Prosecutors reportedly plan to ask Boeing to plead guilty to “misleading aviation safety regulators about key aspects of the 737 MAX aircraft” involved in the crashes in 2018 and 2019. Pleading guilty could result in Boeing being found guilty of a felony, which would negatively impact its ability to win government contracts.
4. Meta: Latest tech giant accused of violating EU’s DMA
The European Commission said that Meta Platforms (META), the company behind Facebook and Instagram, may have violated the Digital Markets Act (DMA) with its “pay or consent” advertising model, making the company the latest tech giant to face potential fines under a sweeping European Union law aimed at promoting technological competition. The regulator said the model “makes users consent to the integration of their personal data” while offering a less personalized version than either Facebook or Instagram. Meta can still refute the allegations, but the Commission could impose a fine of up to 10% of Meta’s “global turnover” if it’s found to have violated the DMA. The Commission said last week that Microsoft (MSFT) may have violated antitrust laws by bundling Teams with other Office products, and accused Apple (AAPL) of also violating the DMA. Meta shares were up about 0.5% in premarket trading.
5. BlackRock buys British data firm Preqin for $3.2 billion
BlackRock (BLK) said it would buy British data group Preqin for 2.55 billion British pounds ($3.2 billion) in cash, giving the Wall Street giant greater access to data for its fast-growing private markets division. “Private market data estimates the market size at $8 billion and is set to grow 12% annually to reach $18 billion by 2030,” BlackRock said in a statement.BlackRock shares were up 0.5% in premarket trading.
