Monday, August 8, 2016

Mergers and acquisitions are taking the early morning headlines to start the new trading week. Walmart (WMT Quick QuoteWMT - Free Report) has closed its buyout of private e-commerce firm Jet.com for $3.3 billion in cash and WMT shares. South African retailer Steinhoff has announced it will purchase Mattress Firm for $3.8 billion. Shares of MFRM has shot up 114% in pre-market trading.

The Mattress Firm deal gives the South African holding firm access to the U.S. market, and it is paying a high premium for the privilege at $64 share. The buyout includes the purchase of some debt. Walmart’s move helps give the U.S.’s biggest retailer (not counting Amazon [(AMZN Quick QuoteAMZN - Free Report) ]) a more robust presence in online sales. This buyout had been expected for awhile, and now the other shoe has finally dropped. Walmart is up slightly ahead of the bell.

Delta Air Lines (DAL Quick QuoteDAL - Free Report) has experienced a massive computer system outage that has left customers stranded all around the world this morning. Though improvements appear to be forthcoming, already so many cancellations have occurred this morning that Delta has announced there will also be a refund program put into place for any customers whose flights have been cackled or “significantly delayed.” Delta shares have dropped a percentage point in the pre-market.

Index futures are again in positive territory ahead of today’s market open, partly on strength in oil. Friday saw prices rise 2%, and both WTI and Brent indexes are showing oil prices north of $42 a barrel. As we saw when oil collapsed going back to last year, the effect this commodity has on any number of seemingly unrelated industries is staggering. Oil prices staying buoyed above $40 per barrel would indicate a bit of relief for the markets overall, even with the S&P 500 trading at record highs.

Q2 earnings season has begun to dwindle as August progresses, but we did see a top- and bottom-line beat from Tyson Foods (TSN Quick QuoteTSN - Free Report) this morning. Earnings of $1.21 per share outperformed the Zacks consensus of $1.07, and the large-cap food company also topped expectations on the top line. Shares are up 3% ahead of the opening bell.

Mark Vickery
Senior Editor