Listen below or on the go on Apple Podcasts and Spotify
Netflix sees Warner split as first step to big changes to streaming and on-demand. (0:15) Jobs market showing cracks. (2:04) GameStop sinking again. (3:02)
This is an abridged transcript of the podcast:
Our top story so far, the co-CEO of Netflix (NASDAQ:NFLX), Greg Peters, believes Warner Bros. Discovery (WBD) splitting into two is an indicator of a broader “shakeout” happening in the U.S. media landscape, where streaming and on-demand platforms are currently prevailing over traditional TV.
In an interview with Bloomberg, Peters said: “Everything is moving to streaming—everything is moving to on demand. There’s going to be a period of shakeout and transition associated with that.”
“They have to rationalize their business for that reality” of streaming demand, he added. “We’re definitely seeing the results of that.”
When asked whether legacy players in the market will merge, he said, “There’s an inevitable logic to that.”
On the economic front, the Producer Price Index rose 0.1% M/M in July, less than the 0.2% increase expected and stronger than the prior month’s -0.2% decrease, which was revised from -0.5%.
That translates to an annual gain of 2.6%, which matched the consensus and accelerated from +2.5% in April.
Excluding volatile food and energy prices, core PPI ticked up +0.1% from a month earlier, compared with the +0.3% consensus and -0.2% in April (revised from -0.4%). On a Y/Y basis, the core measure gained 3.0% vs. +3.1% expected and +3.2% prior.
Pantheon Macro says the CPI and PPI data “imply the core PCE deflator rose by a mere 0.12% in May. Admittedly, an even smaller 0.08% increase a year ago implies that core PCE inflation probably edged up to 2.6%, from 2.5% in April. Nonetheless, the near-term trend remains favorable, enabling the FOMC to signal next week that it still intends to begin easing policy again later this year.”
But they also warn the deflator will rise at a much faster pace over coming months.
On the labor market front, weekly initial jobless claims stayed steady at 248,000. But the four-week moving average hit 240,250, the highest level since August 2023. And continuing claims increased to 1.956 million vs 1.91 million consensus.
Guy LeBas, strategist at Janney, notes the continued “creep in high-frequency jobless data” and says while the total labor market numbers “are still decent, it’s a bridge built on toothpicks. Don’t sneeze.”
Among active stocks, get ready for A.I. Joe!
Mattel (MAT) will start using artificial intelligence to design the next generation of toys and even movies through a deal with OpenAI, Bloomberg reports.
Mattel’s chief franchise officer Josh Silverman says: “Leveraging this incredible technology is going to allow us to really reimagine the future of play.”
The company will continue to retain all intellectual property and remains in full control of the products it creates through AI, Silverman added. The first release won’t be announced until later this year.
GameStop (GME) is down sharply again after the company disclosed that it intends to offer $1.75 billion aggregate principal amount of 0.00% convertible senior notes due 2032 in a private offering.
Wedbush Securities analyst Michael Pachter weighed in on the stock after the earnings report, saying: “It is difficult to understand why any investor would be willing to pay more than 2x cash value for the possibility of GameStop converting more of its cash into Bitcoin, especially since these investors could invest in Bitcoin or a Bitcoin ETF themselves.” Pachter thinks GameStop’s foray into the trading card business is the only recent business venture to see modest success at the moment.
And Oracle (ORCL) is rallying post-earnings as it appears to be taking advantage of the artificial intelligence build out. Cloud revenue is expected to surge 40% year over year in fiscal 2026, which doesn’t even include its role in the Stargate Project.
BofA analyst said: “Clearly, the pipeline for OCI and AI deals is trending well. What is not clear is the trajectory of profitability, with ramping capex likely to weigh on gross margin from here.”
In other news of note, BlackRock (BLK), the largest asset manager in the world, is seeking to become the largest crypto asset manager globally as well as boost its private markets business.
The company targets at least $50 billion crypto assets under management in the next 15 years, according to its Investor Day presentation. It seeks to leverage its experience in the U.S. to expand digital assets exchange-traded products into Europe and Canada.
Private markets also form an important part of its overall growth strategy. In the private markets-to-insurance channel, BlackRock seeks to become the largest third-party manager in balance sheet insurance assets, with $700 billion in assets under management in 2030.
And it targets $400 billion of cumulative fundraising in private markets by 2030.
And in the Wall Street Research Corner, J.P. Morgan says real estate investment trusts are expected to see returns of about 10% in 2025. But growth and opportunities will vary among the property types.
Analyst Anthony Paolone said: “We believe a combination of 4% dividend yields, low-to-mid-single-digit FFO growth, and some room for valuation to expand could result in approximately a 10% total return.”
REITs started 2025 on a strong note, but the recent turbulence in equity markets makes it difficult to say where this will net out.
“Historically, we have seen a more sustained interest in the space when downside risks to the economy move beyond just concerns to showing up more tangibly in corporate earnings,” Paolone said.
Read the full article here