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Market News Over Summer Vacation: PFE, AZN, TSLA, LZB

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Wednesday, August 24, 2016

You know you’re in the middle of a market slow-down period when before-the-bell “news” focuses on the 2016 Economic Symposium in Jackson Hole, WY when Fed Chair Janet Yellen doesn’t speak publicly until Friday, and nobody expects the Fed to hike interest rates in September anyway. In fact, most analysts don’t expect a rate hike until after the General Election in November.

Actually, many analysts now think an incremental interest rate hike of 0.25-0.50% won’t happen until December or sometime in early 2017. If there is any drama to wring out of this, it may be in noting how tricky the balancing act toward raising rates essentially is: if they raise rates too quickly, they run the risk of quashing the slow-but-steady economic policy. Wait too long to raise and the FOMC fails to keep enough dry powder to counteract any macroeconomic downturn that may occur.

In Q2 earnings news, La-Z-Boy (LZB - Free Report) posted worse-than-expected numbers ahead of today’s market on a fiscal Q4 revenue miss. Lower foot traffic in stores and worsening product demand led to the miss. Shares of LZB are down 15% before regular Wednesday trading.

Pfizer’s (PFE - Free Report) M&A pursuits continue, as European pharma company AstraZeneca (AZN - Free Report) has agreed to sell part of its antibiotics business in a deal that may be worth $1.5 billion, depending on the success of the drugs. This follows the Monday announcement of Pfizer’s $14 billion buyout of cancer-focused biopharma company Medivation .

Tesla (TSLA - Free Report) confirms it will bring to market a battery upgrade for its Model S that will enhance acceleration from 0-60 mph in an astounding 2.5 seconds. It will also run 315 miles on a single charge, allowing for a straight drive from Los Angeles to San Francisco, the first such claim by an electric car maker.

This is part of founder and CEO Elon Musk’s push to bring the world’s fastest car to market. The battery upgrade, aptly named Ludicrous P100D, will “not be coming soon,” according to Musk, “but ‘will’ happen long-term.” See what I mean about a slow news day?

Markets are in modestly positive territory again this morning, following a barely-positive regular trading session Tuesday. S&P 500 futures are +1, Dow +4 and Nasdaq +3. I hope everyone not on the trading floor is enjoying their vacation.

Mark Vickery
Senior Editor


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