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In the News: Merger Monday, WYNNing Macau Numbers, & Surprise Oil Cuts

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Monday, high-flying tech stocks took a much-needed breather, albeit a mild one. After gaining 3.23% last week and more than 20% in the first quarter of 2023, the red-hot, tech-heavy Nasdaq 100 ETF ((QQQ - Free Report) ) fell less than a percent. Nevertheless, select growth stocks such as Apple ((AAPL - Free Report) ) and Nvidia ((NVDA - Free Report) ) continued to push forward and made fresh highs in early trading. Despite the quiet and range-bound trading in the major indices, the weekend was news-filled, and specific sectors saw significant gains.

Merger Monday

The weekend was chock full of merger and acquisition news, but one deal stood above them all. Over the weekend, UFC owner Endeavor ((EDR - Free Report) ) announced it would merge with World Wide Wrestling Entertainment (). The deal is valued at $21 billion and will make the newly combined company the most dominant in the space.

WYNNing Macau Numbers

Shares of gaming giant Wynn Resorts ((WYNN - Free Report) ) popped to fresh 52-week highs in early trading after the company announced strong numbers from its Macau division. Gaming revenue from the region soared by nearly 250% year-over-year. The revenue was the strongest since before the COVID-19 pandemic. Wynn was recently covered in our Bull of the Day column on March 28th. Industry group peer Las Vegas Sands ((LVS - Free Report) ) rose in sympathy.

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OPEC Cuts Send Oil Soaring

OPEC, or the Organization of the Petroleum Exporting Countries, is a group of 13 countries that control a significant portion of the world’s oil supply. OPEC countries account for nearly 40% of the world’s oil production. Sunday, OPEC announced a surprise production cut of more than one million barrels a day. After the announcement, crude oil futures shot higher by more than 6%. The gains carried into trading Monday were the strongest in 2023 and the largest in nearly one year.

As was evident on Monday, changes in OPEC’s oil production decisions can dramatically impact the overall oil market. The energy sector is the big early week winner and gained 4.50%. Another winner is Warren Buffett. Buffett’s Berkshire Hathaway has been steadily accumulating shares of Occidental Petroleum ((OXY - Free Report) ) and now owns more than 200 million shares or roughly $12 billion worth of the stock. Looking at OXY’s fundamental picture clarifies why Buffett is such a big buyer. Occidental’s price-to-earnings ratio of 6.69x EPS makes the stock very attractive from a value perspective when compared to the S&P 500’s P/E of 19.0x.

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Beyond OXY, oil stocks rose across the board, including Exxon Mobil ((XOM - Free Report) ), BP ((BP - Free Report) ), Halliburton ((HAL - Free Report) ), and countless others.

Tesla’s Electric Delivery Numbers

Shares of the world’s leading electric vehicle maker fell on Monday by 6% after announcing record delivery numbers of 422,000 vehicles. Though the numbers were stellar, the actual announcement was a “sell the news” type event and was likely already priced into the stock. For now, Tesla ((TSLA - Free Report) ) continues to find support at its rising 50-day moving average.

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