KEY TAKEAWAYS

• Capri Holdings shares plummeted 45% soon after the market opened Friday after a federal judge blocked Coach owner Tapestry’s $8.5 billion acquisition of the Versace and Michael Kors parent.
• Shares of Tapestry, which also owns the Kate Spade and Stuart Weitzman brands, are surging 15%.
• Southern District of New York judge Jennifer Rochon granted the FTC’s motion for a preliminary injunction to block the proposed merger on the grounds that a combination would hurt competition and lead to higher prices.
• Both Capri and Tapestry say they plan to appeal.

Capri Holdings (CPRI) shares plummeted 45% soon after the market opened Friday after a federal judge blocked Coach owner Tapestry’s (TPR) $8.5 billion acquisition of the Versace and Michael Kors parent.

Shares of Tapestry, which also owns the Kate Spade and Stuart Weitzman brands, surged 10% after the ruling, which sided with antitrust regulators in arguing that the combination would hurt competition and lead to higher prices.

The luxury brands announced the deal last year but the Federal Trade Commission (FTC) sued to block their merger, saying the combined firm would have too much power and reduce competition in the market for accessible luxury handbags.

On Thursday, Southern District of New York judge Jennifer Rochon granted the FTC’s motion for a preliminary injunction to block the proposed merger in a 169-page ruling.

Capri and Tapestry Plan To Appeal Ruling

Both Capri and Tapestry said they would appeal.

“Tapestry and Capri operate in an industry that is intensely competitive and dynamic, constantly expanding, and highly fragmented among both established players and new entrants,” Tapestry said. “We face competitive pressures from both lower- and higher-priced products and continue to believe this transaction is pro-competitive and pro-consumer.”

Henry Liu, director of the FTC’s Bureau of Competition, called the ruling “a victory not only for the FTC, but also for consumers across the country seeking access to quality handbags at affordable prices.”

“These bags are a product which millions of people rely on throughout their daily lives,” he added. “The decision will ensure that Tapestry and Capri continue to engage in head-to-head competition to the benefit of the American public.”

The companies combined to have more than $12 billion in annual sales in fiscal 2023, but that’s still a fraction of those reported by European luxury rivals like LVMH, which notched 86.2 billion euros ($93.3 billion) in sales last year.

Including Friday’s moves, Tapestry shares have added 34% this year, while those of Capri have dropped 55%.

UPDATE—Oct. 25, 2024: This article has been updated to include comments from the FTC and to reflect more recent share prices. 

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KEY TAKEAWAYS

• Spirit Airlines shares are surging 12% in premarket trading Friday after the discount carrier said it plans to cut jobs and sell some planes as it tries to shore up its finances.
• The company said that as part of its plans “to return to profitability,” it has identified around $80 million in cost cuts that it plans to start implementing early next year. 
• Spirit also said it had entered into a deal to sell 23 A320ceo/A321ceo aircraft for around $519 million to aircraft-maintenance and component services platform GA Telesis.

Spirit Airlines (SAVE) shares are surging 12% in premarket trading Friday after the discount carrier said it plans to cut jobs and sell some planes as it tries to shore up its finances.

The company said that as part of its plans “to return to profitability,” it has identified around $80 million in annualized cost cuts that it plans to start implementing early next year as it cuts flights. 

“These cost reductions are driven primarily by a reduction in workforce commensurate with the company’s expected flight volume,” the airline said in a Securities and Exchange Commission (SEC) filing.

Sprit Strikes $519M Deal To Sell Aircraft

Spirit, which reportedly is considering a bankruptcy filing, also said it had entered into a deal to sell 23 A320ceo/A321ceo aircraft for around $519 million to aircraft-maintenance and component services platform GA Telesis.  The aircraft are set to be delivered from this month through February 2025.

Spirit said that the net proceeds from the sale as well as discharge of the related debt will boost its liquidity by around $225 million through the end of 2025.

Earlier this week, The Wall Street Journal reported that Frontier Airlines parent Frontier Group Holdings (ULCC) is in the early stages of a renewed bid for Spirit. Last Friday, Spirit extended a deadline for debt refinancing with Visa (V) and Mastercard (MA).

Spirit shares had lost 85% of their value this year through Thursday’s close. 

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Key Takeaways

• GE HealthCare will report earnings before the bell Wednesday, with analysts projecting revenue and profits to rise from the same time last year.
• In the prior quarter, the company lowered its full-year revenue growth projections, citing economic difficulties in China.
• The company has made a number of bets on AI technology, recently announcing an AI “Innovation Lab” to grow and showcase the projects.

GE HealthCare (GEHC) is set to report earnings Wednesday morning, with analysts projecting revenue and profits to rise from the same time last year.

Analysts expect the former General Electric division to report $4.87 billion in revenue, narrowly above last year’s $4.82 billion, according to estimates compiled by Visible Alpha. Net income is expected to rise by a larger margin, about 22% to $458.34 million.

Key Metric: International Sales

After the company said in April that it expected sales growth to be weighted to the back half of 2024, it said in July that macroeconomic headwinds in China led it to lower projections for full-year revenue growth.

GE HealthCare trimmed its full-year revenue forecast to a range of 1% to 2% growth, down from roughly 4% previously. Stimulus programs in China announced last month could help address some of the headwinds GE HealthCare said would hamper sales.

Business Spotlight: AI Investments

GE HealthCare has made a number of investments and partnerships in the artificial intelligence (AI) sector this year, including a partnership with Amazon (AMZN) Web Services to develop AI healthcare tools.

Earlier this week, the company announced an “AI Innovation Lab” to speed up the growth of a number of its AI efforts like breast cancer detection software and AI “agents” with expertise in specific areas of care.

GE HealthCare shares have gained about 15% since the start of the year, at $88.90 as of Thursday’s close.

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KEY TAKEAWAYS

• The silver market eased Wednesday, halting a strong two-week rally.
• The decline comes as expectations for the Federal Reserve to aggressively cut interest rates have subsided.
• However, strong industrial demand will continue to support prices that have surged more than 40% this year.

Silver investors took a breather Wednesday from a strong two-week rally that pushed prices to near 13-year highs. The question facing them now is whether changing sentiment regarding Federal Reserve rate cuts will extend the pullback.

The price of silver dropped 3% to $33.88 per ounce on Wednesday, pausing a rally that had seen prices 15% surge since Oct. 8.

Silver has soared about 40% this year, accompanying gold on its recent run and other precious metals because of expectations that the Fed would cut its benchmark interest rate. When interest rates drop, metals become more competitive as an investment choice because regular income returns from bonds and money-market accounts decrease.

Fuel from the Fed

The Fed fulfilled year-long expectations in September with a 50-basis point (BPS) rate cut, and investors anticipated further rate cuts ahead in what they perceived as a cooling U.S. economy. But September’s surprisingly strong U.S. employment report, as well as other indicators, have altered that perception.

Market participants now expect the Fed to cut rates an additional 50 basis points by the end of the year, according to the CME’s FedWatch tool, which calculates expectations based on fed fund futures trading data. A month ago, after the Fed’s last rate cut, traders were pricing in about a 75% chance that the Fed would trim the benchmark rate by an additional 75 basis points before year’s end.

Another explanation is that profit-taking drove a good portion of Wednesday’s pullback. Since Thursday, the price of silver has risen 10% after surpassing its most recent high in May, a bullish signal for traders focused on technical charts.

Solar Leads Demand Boost

Underlying silver’s 2024 surge and prospects moving forward: Strong industrial demand.

Compared to gold, silver has more fundamental economic value for its use in many products. In addition to the jewelry market, the green revolution has expanded demand, as silver is a primary component for solar energy applications.

Industrial demand for silver rose 11% to a record high of 654.4 million ounces in 2023, the third straight year in which demand outstripped supply, according to The Silver Institute.

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Key Takeaways

• Shares in McDonald’s slumped 6% in extended trading on Tuesday after health authorities said they were investigating an E. coli outbreak possibly linked to the fast-food chain’s Quarter Pounder burgers.
• The projected news-driven drop may lead to a retest of a prior 16-month trading range before the stock potentially continues its longer-term uptrend.
• investors should watch important retracement levels on the McDonald’s chart around $300, $280, and $260.
• The measuring principle, which calculates the distance between the trading range’s two trendlines and adds that amount to the breakout area, forecasts a bullish price target of $353.

Shares in McDonald’s (MCD) slumped 6% in extended trading on Tuesday after health authorities said they were investigating an E. coli outbreak possibly linked to the fast-food chain’s Quarter Pounder burgers.

The Centers for Disease Control and Prevention (CDC) said that 49 cases of E. coli infection had been reported across 10 states, prompting McDonald’s to temporarily remove the popular burger and suspend the distribution of slivered onions from restaurants in those jurisdictions.

Quarter Pounder hamburgers are a staple on the restaurant’s menu, generating billions in revenue each year. Prior to Tuesday’s post-market drop, McDonald’s stock had gained around 24% over the past three months, boosted by confidence that the company’s $5 value meal launched in June could translate into sales growth.

Below, we analyze the technicals on the McDonald’s chart and identify important price levels to watch out for.

Prior Trading Range in Focus

McDonald’s shares oscillated within an orderly 16-month trading range before breaking out above the pattern late last month.

In an encouraging sign for the bulls, increasing volume has backed the stock’s recent move higher. Moreover, the 50-day moving average (MA) crossed above the 200-day MA in September to form a golden cross, a bullish chart signal pointing to higher prices.

However, given the projected news-driven drop, the stock may retest the prior trading range before potentially continuing its longer-term uptrend. Let’s look at three important retracement levels on the McDonald’s chart and forecast a bullish price target.

Key Retracement Levels to Watch

The first lower level to monitor sits around $300, just above where the stock finished the after-hours trading session Tuesday. This location on the chart finds a confluence of support from the 50-day MA and the trading range’s top trendline, which may flip from an area of prior resistance into a floor of future support.

Bulls’ failure to defend this level could see a fall to the $280 region, where the shares may attract buying interest near a trendline linking multiple peaks and troughs on the chart between November 2022 and April this year. This location also sits in close proximity to the upward sloping 200-day MA.

A steeper drop could lead to the stock revisiting lower support at $260, an area where investors may seek out buying opportunities near a horizontal line connecting a range a comparable trading levels on the chart from late 2022 to July this year.

Bullish Price Target to Monitor

To forecast a potential price target on the McDonald’s chart, we can use the measuring principle.

To do this, we calculate the distance between the trading range’s two trendlines in points and add that amount to the breakout area. For instance, we add $53 to $300, which projects a bullish target of $353, an area where investors may look to bank profits.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

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New Takeaways

• Starbucks shares dropped in extended trading Tuesday after the company withdrew its outlook for 2025.
• The company’s preliminary fourth-quarter results also missed expectations.
• CFO Rachel Ruggeri said turning around the business will “take time.”

Starbucks (SBUX) shares dropped in extended trading Tuesday after the company suspended its outlook for 2025. The coffee chain’s preliminary fourth-quarter results also missed expectations.

Starbucks said it would not offer guidance for the 2025 fiscal year, which began this month, citing its transition under new CEO Brian Niccol. The decision “will allow ample opportunity to complete an assessment of the business and solidify key strategies,” the company said. 

Preliminary Q4 Results Miss Expectations

Starbucks reported fourth-quarter revenue of $9.1 billion, down 3% year-over-year and below the analyst consensus from Visible Alpha. Earnings per share (EPS) at 80 cents declined from $1.06 a year ago and fell short of expectations of $1.03. 

Same-store sales dropped 7% globally and 10% in North America. In the U.S., the decline was 6%, driven by a 10% fall in comparable transactions. 

“Despite our heightened investments, we were unable to change the trajectory of our traffic decline, resulting in pressures in both our top-line and bottom-line,” Chief Financial Officer Rachel Ruggeri said.

“We are developing a plan to turn around our business, but it will take time,” she added. 

Shares of Starbucks fell close to 4% in extended trading Tuesday following the release.

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The stock market’s bull run this year is peculiar. Stocks tend to come under pressure in the immediate lead-up to a presidential election, yet the S&P 500 is riding a six-week winning streak and trading at record highs.

However, if history’s anything to go by, which party ends up in the White House may not matter that much to the performance of the stock market—at least not in the next 4 years.

In a recent note, Deutsche Bank analysts Jim Reid and Henry Allen charted the annualized S&P 500 total return for each U.S. president since the turn of the 20th century. (N.B.: The S&P 500 in its current form didn’t exist until 1957; returns before this year are estimates calculated by data provider Global Financial Data.)

Reid and Allen found that, since the Great Depression, nearly all of the men in the Oval Office have presided over returns in the mid-teens, offering little evidence to support the notion that one party is better for the stock market than the other. 

Of the bunch, only three presidents saw negative returns during their administrations, and each coincided with an economic shock beyond the president’s control.

Herbert Hoover (1929-33) posted the worst performance of any president (-28%). While Hoover’s handling of the Great Depression has been criticized, it’s likely that the bubble that formed under his predecessor, Calvin Coolidge, had more to do with the dismal returns of the early 1930s than anything Hoover did in office. 

Richard Nixon (1969-1974) presided over the 1973 oil crisis and, subsequently, an annualized S&P 500 return of -1%. George W. Bush (2001-2009) entered the Oval Office amid the bursting of the Dotcom bubble and left during the Global Financial Crisis, contributing to his -4% annualized return. 

“So it’s possible to argue that it’s better to be lucky than good,” conclude Reid and Allen. “And events are more likely to dictate big-picture market performance under the next President, with policy probably playing a smaller role.”

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Key Takeaways

• Lockheed Martin missed revenue estimates as aerospace sales tumbled because of contractual and funding issues for its F-35 fighter jet.
• Still, the company revised its full-year profit outlook higher.
• Shares of Lockheed Martin fell from their all-time high set yesterday.

Lockheed Martin (LMT) shares tumbled Tuesday as the defense contractor missed revenue estimates on a drop in aerospace sales.

The company reported third-quarter revenue rose 1% year-over-year to $17.10 billion, while analysts surveyed by Visible Alpha were looking for $17.38 billion. Earnings per share (EPS) of $6.80 exceeded forecasts.

Lockheed’s Aeronautics unit sales declined 3% to $6.49 billion, primarily because of delays in contractual authorization and funding for the F-35 fighter jet. Sales at its Space division were down less than 1% to $3.08 billion. Missiles and Fire Control segment revenue jumped 8% to $3.18 billion, and Rotary and Mission Systems unit revenue was 6% higher at $4.37 billion.

Lockheed Raises FY EPS, Narrows Revenue Outlook

The company raised its full-year EPS outlook to $26.65 from a range of $26.10 to $26.60, and narrowed its revenue outlook to $71.25 billion from the previous $70.50 billion to $71.50 billion. 

Shares of Lockheed Martin hit an all-time high yesterday, and even with today’s roughly 5% declines they’re up nearly 30% year-to-date.

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Key Takeaways

• Oklo shares soared 22% to a new record high Monday as investors continue piling into the Sam Altman-backed Nuclear energy startup.
• The stock has more than doubled over the past month on growing consensus among analysts that nuclear energy-related companies will benefit from big tech hyperscalers turning to the energy source to power AI data centers.
• The relative strength index confirms bullish price momentum, but also warns of extremely overbought conditions that could lead to near-term declines in the stock.
• A bars pattern forecasts an upside price target of around $35, assuming the stock may be in the process of following a basic Elliot Wave pattern with five distinct swings playing out.
• Investors should monitor key support levels on Oklo’s chart around $16, $12.25, and $9.50.

Shares in Oklo (OKLO) are likely to remain on watchlists after soaring to a new record high Monday as investors continue piling into the Sam Altman-backed Nuclear energy startup.

The stock has more than doubled over the past month on growing consensus among analysts that nuclear energy-related companies will benefit from big tech hyperscalers turning to the energy source to power artificial intelligence (AI) data centers. The stock gained 22% on Monday to close at $22.31.

In September, Microsoft (MSFT) announced a 20-year deal to provide nuclear power for the tech giant’s data centers, while Amazon (AMZN) and Alphabet’s (GOOGL) Google have also recently signed nuclear deals to meet their growing energy requirements.

Below, we take a closer look at Oklo’s chart and use technical analysis to point out several key price levels to watch out for.

Volume Confirms Bullish Price Momentum

Since breaking out from a falling wedge on above-average volume last month, Oklo’s stock has trended sharply higher. Moreover, share turnover has surged in recent trading sessions, indicating strong buying conviction behind the bullish move.

The relative strength index (RSI) confirms positive price momentum with a reading above 80, though the indicator also warns of extremely overbought conditions that could lead to near-term declines in the stock.

Let’s look at a potential upside price target and identify three key support levels that could come into play during periods of profit taking.

Chart-Based Price Target

We can forecast a bullish price target by using a bars pattern, a technique that analyzes prior trends on the chart to project future moves. In this case, we’ll extract Oklo’s trending period from September to October and overlay that move from prior peaks in the stock around $16. 

The analysis, which forecasts a target of around $35, assumes the stock may be in the process of following a basic Elliot Wave pattern with five distinct swings playing out.

Key Support Levels to Watch

During an initial pullback, investors should keep an eye on the $16 level mentioned above. This area on the chart sits well positioned to find support near a horizontal line connecting a range of comparable trading levels between April and October.

A close below this level could see the shares retrace to around $12.25, where they may attract buying interest near several peaks and troughs that formed on the chart throughout April and May.

A deeper fall may lead to a retest of lower support near the $9.50 area, a location just below the 200-day moving average where bargain hunters could look for buying opportunities around a period of July consolidation and this month’s retracement low.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

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Episode 210 of the Investopedia Express with Caleb Silver (Oct. 21, 2024)

Subscribe Now: Apple Podcasts / Spotify / PlayerFM

From Philly Phinancial Literacy Week, founder Nisiar Smith takes us inside the movement he helped create to extend financial education into the underserved communities of Philadelphia. Plus, Marc Russell, the founder of BetterWallet and one of the original Fin-fluencers, takes us on his journey from being a foster child, to climbing out of $80,000 in debt, to building a personal finance business and platform serving hundreds of thousands of people. And, more record highs for big stocks and big markets usually mean more of the same, even with rising volatility.

Links for Show Notes:

• https://www.investopedia.com/what-to-expect-in-the-markets-this-week-8729934
• https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_101824.pdf
• https://www.bespokepremium.com/interactive/research/think-big-blog/
• https://sentimentrader.com/
• https://www.phillyphinancial.org/
• https://www.investopedia.com/boeing-union-reach-tentative-deal-to-end-5-week-long-strike-8731034
• https://www.instagram.com/betterwallet/
• https://www.thebetterwallet.com/
• https://www.investopedia.com/terms/b/bulltrap.asp

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