Stock Market Today: Shakeup for Alphabet; JetBlue Merger?

On Monday and Tuesday, stocks took a hit as investors worried about a deteriorating trade situation with China. However, they were singing a different tune in the stock market today. Equities jumped higher on Wednesday as trade tensions cooled off.

As we mentioned yesterday, the situation is simple (although frustrating). Either the trade talk will worsen in the coming days and weeks and stocks will fall, or they will improve and equities can rebound.

At least for a day, the feeling on Wall Street is a bit more optimistic.

Movers in the Stock Market Today

Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) founders Larry Page and Sergey Brin announced they will be stepping down from their top executive positions at Google’s parent company. While they are stepping down, it doesn’t mean that they are giving up control. They will still have voting control and serve on Alphabet’s board of directors.

This change comes at an interesting time for Alphabet, as antitrust concerns linger and as regulators take a closer look at the company’s practices. Replacing Page as Alphabet’s CEO is Sundar Pichai, who currently serves as the CEO of Google. He will now be the CEO for both units.

Alphabet, which rallied 1.9% on the day, isn’t the only company with a shakeup.

Expedia (NASDAQ:EXPE) announced the immediate resignation of CEO Mark Ekerstrom and CFO Alan Pickerill. The board is still determining who will take over the roles, but in the meantime Chairman Barry Diller and Vice Chairman Peter Kern are managing the day-to-day operations. Chief Strategy Officer Eric Hart is acting as current CFO.

Expedia also announced an additional 20 million shares for its buyback program, which has 9 million shares remaining on its current repurchasing plan. This likely helped push the stock higher, with shares of EXPE up 6.2% Wednesday.

JetBlue (NASDAQ:JBLU) once again finds itself the subject of merger speculation. This time Delta Air Lines (NYSE:DAL) is the rumored buyer. Investors are intrigued by the news of both JetBlue and Delta backing out of an upcoming conference hosted by Buckingham Research next week. The speculation has JetBlue trading higher by 2.8%.

Ballast Point, a big name in the San Diego beer scene, has been sold for the second time in the last four years. Back in 2015 Constellation Brands (NYSE:STZ) acquired Ballast Point for $1 billion. Now, Kings & Convicts Brewing bought the company for an undisclosed amount. The deal is expected to be finalized by the end of 2020.

Robinhood just topped 10 million accounts. The millennial-fueled broker is showing rapid growth over the years, growing from just 1 million accounts in 2016 and 6 million accounts in 2018.

Clearly Robinhood’s momentum has had an impact. Just a few months ago, Charles Schwab (NYSE:SCHW) cut its online stock-trade commissions down to zero. E*Trade (NASDAQ:ETFC) and TD Ameritrade (NASDAQ:AMTD) quickly followed suit. Then SCHW announced it will acquire AMTD.

Worth pointing out is that a combined AMTD and SCHW would have about 24 million customers. Think about that against Robinhood’s growth for a second.

Earnings Roundup

There were a few earnings movers on the day, starting with Campbell’s Soup (NYSE:CPB). The company earned 78 cents per share in its fiscal first quarter, 7 cents better than expected. However, revenue of $2.18 billion declined 90 basis points year-over-year and missed estimates by $20 million.

Despite a decline in organic sales, roughly in-line guidance was enough to push CPB to new 52-week highs.

Salesforce (NYSE:CRM) slumped on Wednesday, falling more than 3%. It wasn’t a big decline, but that’s because one may not be warranted — even if CRM does have a history of volatility.

The company beat on earnings and revenue expectations, but guidance is causing investors to hesitate. While management’s outlook for the current quarter’s revenue was slightly above expectations — at $4.74 billion to $4.75 billion vs. estimates of $4.73 billion — earnings came up short. Management expects earnings of 54 to 55 cents per share in Q4 vs. consensus expectations of 61 cents per share.

That’s been kind of the vibe in cloud stocks, though. Workday (NASDAQ:WDAY) also took a tumble despite better-than-expected earnings and revenue results. While management’s outlook for next quarter was strong and they raised their full-year fiscal 2020 outlook, investors are concerned about the next fiscal year of subscription growth.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GOOGL. 

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