Business and Finance News - 6.10.24

May Job Surge: Payrolls Up by 272,000, Unemployment Hits 4%, Earnings and Treasury Yields Rise

• Nonfarm payrolls increased by 272,000 in May, significantly above the expected 190,000.

• The unemployment rate rose to 4%, the first time above 4% since January 2022.

• Job gains were mainly in health care, government, and leisure and hospitality sectors.

• Average hourly earnings rose by 0.4% monthly and 4.1% annually, both higher than expected.

• The labor force participation rate decreased to 62.5%, down by 0.2 percentage points.

• Full-time workers declined by 625,000, while part-time positions increased by 286,000.

• Stock market futures declined, and Treasury yields surged following the jobs report.

Nvidia Prepares Its 10-for-1 Stock Split, Increasing Accessibility and Demand

• Nvidia's (NVDA) stock price reached a record high on Thursday, briefly pushing its market cap above $3 trillion before falling back below the threshold.

• Nvidia's 10-for-1 stock split affects shareholders as of market close on Thursday.

• Investors will receive nine additional shares after market close on Friday.

• Nvidia's split-adjusted trading begins on Monday.

• The split lowers Nvidia's stock price, potentially increasing accessibility and demand.

• A stock split doesn't change the total value of investors' holdings or Nvidia's market cap.

• Stock splits can boost demand and increase the stock price, as seen with Amazon.

-Nvidia Corporation is a leading technology company specializing in designing and manufacturing graphics processing units (GPUs) and related technologies for gaming, professional visualization, data centers, and automotive markets.

Bain Capital Acquires PowerSchool for $5.6 Billion, Stockholders to Receive $22.80 Per Share in 37% Premium Deal

• PowerSchool (PWSC) to be acquired by Bain Capital (BCSF) for $5.6 billion.

• PowerSchool stockholders will receive $22.80 per share in cash.

• The purchase price is a 37% premium over the unaffected share price.

• PowerSchool serves over 55 million students and 17,000 customers in more than 90 countries.

• PowerSchool will remain a standalone company with uninterrupted business operations.

• Bain Capital's support will enhance PowerSchool's growth and innovation, especially in AI technology.

• Vista Equity Partners and Onex Partners will maintain minority investments in PowerSchool.

-Bain Capital is a private investment firm that specializes in a wide range of investment strategies. Founded in 1984, the firm engages in private equity, venture capital, credit, public equity, impact investing, and real estate.

-PowerSchool is a leading provider of cloud-based software for K-12 education. The company offers a comprehensive suite of educational technology solutions that support various aspects of the learning journey for students, educators, administrators, and parents.

Spirit Airlines Faces Challenges Post-JetBlue Takeover Failure and Engine Recall, CEO Rules Out Bankruptcy

• Spirit Airlines (SAVE) is struggling after a failed takeover by JetBlue and an engine recall.

• CEO Ted Christie stated the company isn't considering a Chapter 11 bankruptcy filing.

• Spirit shifted its business model, removing most flight-change fees and bundling perks.

• Increased competition, shifting travel demand, and a Pratt & Whitney engine recall are issues.

• A federal judge blocked JetBlue's planned takeover of Spirit on antitrust grounds.

• S&P Global Ratings downgraded Spirit, questioning its ability to refinance debt.

• Spirit's shares have lost more than 77% this year through Thursday's close.

-Spirit Airlines is a low-cost airline based in the United States. The company primarily operates as an ultra-low-cost carrier, offering budget-friendly fares by charging separately for various services that are often included in the ticket price by other airlines.

TSMC's May Sales Surge 30% to $7.1 Billion Amid AI Demand and Electronics Recovery

• TSMC's (TSM) May sales surged 30% year-over-year to $7.1 billion.

• May's revenue was a 2.7% decrease from April.

• TSMC's January-May revenue increased 27% year-over-year.

• TSMC is among the world's 10 most valuable companies, driven by the AI boom.

• TSMC manufactures semiconductors for Nvidia, AMD, and Apple.

• TSMC expects second-quarter revenue between $19.6 billion and $20.4 billion.

• TSMC plans to spend up to $32 billion on advanced technologies this year.

*Taiwan Semiconductor Manufacturing Company (TSMC) is the world's largest contract chip manufacturer.

A Few Companies Expected to Report Earnings This Week…

• Oracle (ORCL) is expected to report on Tuesday.

• Broadcom (AVGO) is expected to report on Wednesday.

• Adobe (ADBE) and Autodesk (ADSK) are expected to report on Thursday.

-Oracle Corporation is a multinational technology company that specializes in developing and marketing database software and technology, cloud engineered systems, and enterprise software products.

-Broadcom Inc. is a global technology company that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions.

-Adobe Inc. is a multinational software company known for its innovative software products and services, primarily focused on creative and digital media solutions.

-Autodesk is a software company that creates applications for design, engineering, and entertainment, such as AutoCAD for drafting and 3D modeling.

Here’s how the markets closed on Friday:

• Dow Jones: 38,798.99 -87.18 (-0.22%)

• S&P 500: 5,346.99 -5.97 (-0.11%)

• Nasdaq: 17,133.13 -39.99 (-0.23%)

• Bitcoin (BTC): $69,596.85 (4:15PM PST on 6/9/24)

• Ethereum (ETH): $3,706.42 (4:15PM PST on 6/9/24)

Here’s how THE SUPER SIX STOCKS did on Friday:

• Microsoft (3.15T): 423.85 -0.67 (-0.16%)

• Apple (3.019T): 196.89 +2.41 (+1.24%)

• Nvidia (2.974T): 1,208.88 -1.10 (-0.09%)

• Alphabet (2.174T): 175.95 -2.40 (-1.35%)

• Amazon (1.918T): 184.30 -0.70 (-0.38%)

• Meta Platforms (1.25T): 492.96 -0.80 (-0.16%)