Twitter Looks At Crashing Microsoft’s TikTok Party

Over the weekend it was reported that social media firm Twitter (TWTR) has held initial talks about a possible deal to acquire TikTok’s US operation, something that Microsoft (MSFT) has spent weeks negotiating — both with TikTok parent ByteDance and the White House. With a market cap 50 times the size of Twitter’s, Microsoft has much deeper pockets and is still very much the front runner. TikTok’s US operations could end up being valued at more than Twitter itself, raising financing concerns, but The Wall Street Journal noted that the firm’s smaller size would mean it would face less antitrust scrutiny. Twitter’s share price is up 15.6% and pre-pandemic, the firm had been delivering a regular profit, although it slumped to a billion dollar plus loss in the three months to the end of June.

Microsoft’s CEO Satya Nadella has already discussed a potential deal with President Trump, who has set a deadline of 15 September for TikTok to end its US operations unless it is acquired by “a big company, a secure company, a very American company.”

European markets are up this morning as Chinese industrial data came in better than expected overnight showing some encouraging signs that recovery could be on its way back to pre-pandemic levels. Leading the way is the commodities-heavy FTSE100 buoyed by oil giants BP (BP) and Royal Dutch Shell (RDS-A) after Saudi Aramco made upbeat comments about a rise in energy demand from Asia.

Earnings season is going better than anticipated

The three major US stock indices continued pushing higher last week, with the S&P 500 now within 1% of its record high and the Nasdaq over 11,000 points for the first time in history. US stocks had a muted end to the week, however, as the monthly government jobs report showed the economy added 1.8 million jobs in July, below the number added in both June and May. Based on the companies that have reported so far, Q2 earnings season has gone better than anticipated. FactSet analysts had projected an earnings decline of 44%, but have revised that to 34%.

It was the Dow Jones Industrial Average that led the way last week, adding 3.8% to take it within 4% of where it started the year. The Walt Disney Company (DIS) and Boeing (BA) were two of the week’s biggest winners, adding 11.1% and 7.6% respectively. The Nasdaq Composite’s gains were tempered on Friday, as it fell 0.9% while both the Dow and S&P 500 eked out positive days. Illumina was the day’s biggest loser, as the $52bn market cap biotech company closed the day 10.9% down after missing earnings expectations and reporting that many of its customers’ operations remain closed due to the pandemic.

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