By Joyce Yu
Philadelphia, PA–Disney’s $71.3 billion offer for 21st Century Fox’s entertainment assets has been approved by shareholders on Friday, giving the former ownership of Fox’s movie studiowhich includes franchises like “Avatar” and “X-men” along with cable channels like FX and National Geographic. Fox will keep Fox News, Fox Sports and the Fox broadcasting network as a separate company.
Shares of both Disney and Fox were little moved after the news, unlike Amazon which surged more than 3% at market open on another quarter of stellar earnings. Amazon said after market close on Thursday that it earned $2.5 billion in profit for the three months ending in June, a whopping growth from the $197 million it made during the same period last year. This marks the first time for the tech company to record a quarterly profit of more than $2 billion as Prime subscriptions, cloud computing and its nascent advertising business continue to fuel it growth.
Other tech stocks, however, are penalized for missing estimates. Twitter slumped 12.5% after reporting fewer-than-expected monthly active users and warned this might continue to fall as the company deletes phony accounts. Intel sank 5.8% after its fast-growing data center business missed estimates and it delayed the release of its next-generation chips until the end of 2019.
On macro-economics, US economy gained 4.1% in the second quarter boosted by spending and agriculture exports. This is the fastest pace since 2014 and in line with economists’ estimate. First-quarter reading was revised up from 2% to 2.2%.
“At the end of the day, it really is about what is truly going on in the market and what is truly going on is earnings,” said J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago. There were reports that exports rose in part as farmers rushed to get soybeans to China ahead of expected retaliatory tariffs to take effect soon.
With the effects of the tax cut wearing off and rising interest rates that is set to depress consumer spending, economic growth in the second half of the year is expected to slow down. “Personal consumption would need to keep up with this impressive pace to see a solid second half,” Ian Lyngen at BMO Capital Markets told CNBC. While US-China trade war is expected to temper further growth, recent trade agreements between the US and the European Union is a positive development to the market.