Today's Market: Surprise Announcements, Shareholder News Highlight Stock Moves

by: Matthew Smith

TGT announced a dividend increase and that the company will double its share buyback program.

TSLA's CEO said that they would be taking orders for the Model X in the next 3-4 months.

NFLX shareholders approved a measure to increase the number of shares the company can issue as well as three new directors to the board.

Bad news is good news in China these days, as investors look at disappointing economic news as further proof that the PBOC needs to embark on easy money policies or China will create further stimulus projects. The investors over there really do have rose tinted glasses on because we cannot imagine markets moving up 1-3% per day, every day when there is that economic backdrop and no light at the end of the tunnel.

Looking across the Atlantic, German 10-Year bunds have crossed the 1.00% yield level as investors continue to sell long-term fixed income and seek shelter in the short-term markets in anticipation of rate hikes.

Chart of the Day:

The following chart of the 10-Year bund pretty much tells one everything they need to know about the German bund market and its recent volatility created by the snapback.

Source: CNBC

We have economic news today, and it is as follows:

  • MBA Mortgage Index (7:00 a.m. EST): Est: N/A Act: 8.4%
  • Crude Inventories (10:30 a.m. EST): Est: N/A
  • Treasury Budget (2:00 p.m. EST): Est: -$85.0 B

The Asian markets are lower today:

  • All Ordinaries - up 0.13%
  • Shanghai Composite - down 0.15%
  • Nikkei 225 - down 0.25%
  • NZSE 50 - down 0.99%
  • Seoul Composite - down 0.62%

In Europe, markets are higher today:

  • CAC 40 - up 0.69%
  • DAX - up 1.02%
  • FTSE 100 - up 0.32%
  • OSE - up 0.91%

Another Fumble By Target

Target (NYSE:TGT) is the latest company to inadvertently post news releases to its website, or have third party suppliers publish news releases, ahead of their scheduled release. While this may bring back memories of the Target data breach and have investors questioning whether the company has turned a corner in regards to its IT protocols, we think that the content of this release is more important. Although Target initially denied the reports of the release, and its contents, the company later stated that the share buyback and dividend news were in fact true via a press release.

Target has now doubled the size of its share buyback plan to $10 billion after already spending $3.7 billion under the previous $5 billion plan. The board also raised the retailer's quarterly dividend by 7.7% to $0.56/share, from the previous $0.52/share.

Apple Music & Antitrust Scrutiny

One knows that they are powerful in the business world when new products draw the attention of regulators due to antitrust concerns prior to that product getting traction among consumers. This is the case with Apple (NASDAQ:AAPL), which various financial news media outlets are reporting has drawn the attention of the Connecticut and New York Attorneys General offices who want to make sure that free streaming services are not forced out of the business by exclusivity agreements between major record labels and Apple. Nothing will come of this and we would note that some in the industry have already responded to inquiries from the AG's offices saying that collusion did not take place and that Apple's entry will not impede the music industry from striking deals with other music services that currently exist or may exist in the future. There is no smoke here, and certainly no fire.

Netflix Shareholders Vote To Increase Share Count

Shares in Netflix (NASDAQ:NFLX) rose yesterday afternoon after it was announced that shareholders had voted to approve the measure to increase the number of shares that the company can issue. This now paves the road for the company to split its shares and also continue to issue equity to key employees and executives. The company's shareholders also voted for three new members to the board of directors, which include Zillow's Richard Barton, Microsoft's Brad Smith and Anne Sweeney, formerly of Disney.

Tesla News

There were a lot of news items which came out of Tesla's (NASDAQ:TSLA) annual shareholders meeting, including that the company's CFO is retiring once a replacement is found. The company's CEO, Elon Musk, had a lot of good news for shareholders which should put their minds at ease, especially those worried about growth projections. Mr. Musk said that the company should grow strongly for years to come and indicated that investors could count on sales of the Model X SUV occurring in the next three to four months, which should help with the holiday season.

Another point he made to investors was that driverless cars are the future and that some Model S owners will get hands-free steering in the next few weeks as Tesla begins to test the technology. Mr. Musk stressed that the early technology in this area will be to assist the driver, with later versions capable of automating various driving tasks but still requiring the driver to be cognizant of the road and operation of the vehicle.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: AAPL has previously been recommended.