Weekly Market Update - 26 August 2024

Meta AI

Tech giants that want to spend big on artificial intelligence and stay in the good graces of investors should take a page out of Meta’s playbook. The firm has seen its shares gain 13% this month, far outperforming Big Tech peers despite reporting another jump in capital expenditures and pledging to spend even more. The difference is that Mark Zuckerberg did a better job of convincing investors that AI is helping to improve results in its core business — digital advertising. The AI boost for others like Amazon, Microsoft and Alphabet hasn’t been as well articulated.

Source: Bloomberg

Index Calculation Question

JPMorgan has dropped a proposal to change the way it calculates its flagship emerging-market bond index that would have reduced China’s share by almost half. The bank is seeking client feedback on potential amendments to its GBI-EM index. Under one radical option initially floated, China’s share in the gauge would have dropped to 6% from 10%. JPMorgan has since removed the proposal that had an impact on China’s weighting, with the consultation focusing on the case for including the Philippines and Saudi Arabia, according to documents seen by Bloomberg. JPMorgan’s index was tracked by $236 billion in assets as of last year.

Source: Bloomberg

Megadeals

A pair of megadeals in the consumer industry is keeping bankers busy during the quiet summer months. 7-Eleven parent Seven & i Holdings soared Monday after saying it’s received a takeover proposal from the owner of Circle K, taking the Japanese convenience store operator’s market value to around $38.5 billion. A merger would create the world’s top operator of roughly 100,000 convenience stores. The news came the week after candy maker Mars agreed to buy Kellanova, the maker of Pringles chips and Pop Tart pastries, for nearly $36 billion. Last month was already the busiest July for mergers and acquisitions in three years.

Source: Bloomberg