Morning Movers: Broadcom Gains on Intel Interest; Newmont Mining Slides on Downgrade

With the Dow Jones Industrial Average looking set for a higher open this morning, we...

...wonder how long the "Goldilocks" environment can last; ...consider RBC's decision to upgrade Barrick Gold (ABX) and downgrade Newmont Mining (NEM); ...explain why Twitter's (TWTR) acquisition of streaming rights for Major League Soccer is a bigger deal than it looks in the View From Silicon Valley.

Stocks are rising this morning on continued strength following last week's "Goldilocks" payrolls report. But many observers are already wondering just how soon it could end.

Bloomberg News

You wouldn't know it by the markets this morning. S&P 500 futures have advanced 0.2% at 8:47 a.m. today, while Dow Jones Industrial Average futures have risen 55 points, or 0.2%. Nasdaq Composite futures have gained 0.4%.

The recent strength has been predicated on the notion that economic growth in the U.S. can accelerate without leading to higher inflation. That, in turn, would allow the Federal Reserve to take its time with rate hikes, and give the market more room to run. That narrative will get its first challenge tomorrow morning when the consumer price index is released, and it could show that the perfect setup isn't quite that perfect. "For now, the impact of the weaker than expected average hourly earnings...growth reading along with strong overall economic data should keep volatility under control and support risk assets," write Evercore ISI strategist Dennis DeBusschere. "CPI is likely headed higher though, which is why we do not think the goldilocks backdrop will last all of 2018."

Tomorrow never knows. -Ben Levisohn

Broadcom (AVGO) is up 2.5% to $260.01 on a report from The Wall Street Journal that Intel (INTC) hopes to buy the firm if its hostile bid for Qualcomm (QCOM) falls through. Anonymous sources told the Journal that Intel has been considering a number of acquisition options for over a year, although it hasn't decided definitively on a course of action. Intel is down 0.7% on the news, to $51.83, while Qualcomm is up 0.7% to $63.45 this morning.

General Electric (GE) is up 0.7% to $15.04 after Reuters reported that it may look to sell its electrical engineering business late Friday. The troubled industrial giant acquired the division for $3.2 billion in 2011.

Anheuser-Busch InBev (BUD) is up 1.1%to $116.40 after Bernstein upgraded it to Outperform.

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Barrick Gold (ABX) is up 0.6% to $11.89 after RBC Capital Markets upgraded it to Outperform.

Archer Daniels Midland (ADM) is up 1% to $43. 72 after Goldman Sachs upgraded it to Buy.

E*Trade Financial (ETFC) is up 1.2% to $57.90 after Raymond James upgraded it to Strong Buy.

Merck (MRK) is up 1.1% to $55.70 after Leerink upgraded it to Outperform.

Newmont Mining (NEM) is down 1% to $37.31 after RBC Capital Markets downgraded it to Underperform.

Red Hat (RHT) is down 0.8% to $154.20 after Mizuho downgraded it to Neutral.

Time Warner (TWX) is up 0.7% to $95.96 after UBS upgraded it to Buy. - Teresa Rivas

On the surface, it appears to be a minor-even inconsequential-transaction.

Twitter (TWTR) this weekend struck a three-year deal to live-stream 25 Major League Soccer games this season for an undisclosed amount. The matches will be broadcast in English on Twitter and on Univision (UVN) networks in Spanish. It's a nice bit of original programming to prop up Twitter's relatively flat membership, albeit from a second-tier sports league dwarfed by the NFL, NBA, MLB, NHL and European soccer.

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But in gaining MLS rights, Twitter remains in the game for streaming live-sporting events after losing Thursday Night Football toAmazon (AMZN) last year. The NFL partnership was a cornerstone of Twitter's live-streaming video strategy under former Chief Operating Officer Anthony Noto, the one-time Chief Financial Officer of the NFL.

Live-streaming of sporting events has increasingly gained importance as part of a broader strategy by social media companies and traditional broadcasters to reach the coveted 18- to 49-year-old demographic that is essential in establishing premium advertising rates.

This is borne out in the rising cost for media rights to sporting events in North America despite grousing over declining NFL ratings. It rose 5.6% to $20.1 billion this year and is expected to increase another 4% to $21 billion in 2019, according to PriceWaterhouseCoopers.

Interestingly, Twitter is working with MLS to replace Facebook (FB), which just announced a pact with Major League Baseball to stream 25 afternoon games live this season for a reported $30 million to $35 million.

Facebook is in the midst of aggressively adding sports content to its live channels. Last year, it cut deals with Fox Sports to stream soccer's UEFA Champions League and with Univision to stream live games from Mexico's top soccer league, Liga MX. It also made an unsuccessful $600 million bid for rights to an Indian cricket league.

The MLS may lack the sizzle of soccer's Premier League, but it will do just fine for Twitter in the ever-competitive world of streaming live-sporting events. - Jon Swartz

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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