Stocks edge higher, Amazon & MGM, Exxon vote, retail match made in heaven: Ethereum and GameStop

US stocks are higher as reopening trades bounce back sharply.  Americans are going back to malls, planning cruise trip vacations, and booking flights anywhere they can.  Consumer discretionary and communication stocks led the rally.  Today was quiet on the data front and with Fed speak, so investors just focused on reopening momentum.  The dollar bounced on what seems most likely a short-covering move.

Amazon

Amazon is tired of being in the middle of the pack when it comes to the streaming wars.  With today’s potential acquisition, they could have two recent big wins in entertainment.  In March, Amazon secured exclusive rights to Thursday NFL broadcasts.  Today, Amazon announced the acquisition of MGM for USD8.5 billion, pending regulatory approval.  Amazon probably overpaid by a billion dollars, but it’s hard not to argue that this is positive for their streaming offering.

Amazon’s acquisition bolstered the valuation of every media giants holdings today.

Exxon

Exxon’s activist battle will not go away anytime soon.  With over half the shares being owned by retail, big changes to the board will take time.  The little activist investors, Engine No.1 won 2 board seats (as of early afternoon) in what keeps the push going for Exxon to reach carbon neutrality by 2050.  The movement for Exxon to ramp up its investments in battling climate change is growing and that could be a short-term drag for share prices.  Exxon shares rose 0.8% after the vote as investors viewed no radical changes to Exxon’s strategy over oil and gas production.

FX

Earlier in Europe, ECB’s Panetta emphasized that it was too early to consider any tapering of the pandemic bond buying purchase.  Since the end of March, the euro has been mostly a one-way trade higher and that will pose a problem for the ECB if it continues.  The 1.2265 level should prove to be a short-term top for EUR/USD.  The ECB is no stranger for talking down the shared currency.

Cryptocurrency

Ethereum surged on expectations that GameStop is creating an NFT platform.  This could be a match made in social media trading heaven.  GameStop already has the complete support from the new retail trader that emerged over the past year.  Ethereum has become the go-to trade for many cryptocurrency traders, simply on the use case argument.

Bitcoin is also bouncing back but struggling to hold onto the USD40,000 level.  The cryptoverse continues to expect ethereum to outperform bitcoin and that will make it much harder for the world’s largest cryptocurrency to return to record levels.

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