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The Market In 5 Minutes: Musk's Merger Monday

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The Market In 5 Minutes: Musk's Merger Monday
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Below is a tool used by the Benzinga News Desk each trading day -- it's a look at everything happening in the market, in five minutes. Apply for daily AM access by clicking here or email minutes@benzinga.com.

Macro Focus

Wall Street stocks were poised to start the month higher, with futures up on Monday after last week's soft growth data reduced bets for a Federal Reserve interest-rate hike in the near term. U.S. GDP grew 1.2 percent in the second quarter of 2016, an improvement from the first quarter's 1.1 percent gain, but well below the 2.6 percent economist expectation.

"Q2 U.S. GDP was certainly disappointing, but strong consumer spending still gives reason for cautious optimism," said Drivewealth Head Market Strategist Brian Dolan. "Continued declines in business spending and investment seem most likely to continue in light of the political uncertainty accompanying the U.S. election season."

Dolan said that while the number will likely be revised higher in the coming months, it "reinforces the Fed's cautious stance and increasingly makes a September rate hike highly unlikely."

Oil prices traded lower as Brent crude futures fell 1.45 percent to trade at $42.90 per barrel, while US WTI crude futures also fell 1.39 percent to trade at $41.02 a barrel.

BZ News Desk Focus

Two of the largest telephone and broadband internet services providers in the US are among those companies expected to take their turns on the earnings stage this week. However, expectations on Wall Street are very different for Centurylink (NYSE: CTL) and Frontier Communications (NASDAQ: FTR).

Other companies that analysts expect to show some earnings growth when they report this week include Activision Blizzard, Aetna, CVS Health, Humana, LinkedIn, MGM Resorts, Pfizer, 3D Systems and Williams Companies. A net loss is in the cards for Devon Energy, Electronic Arts, FireEye, Marathon Oil, Occidental Petroleum, Take-Two Interactive Software and Tesla, if the analysts are correct.

The Markit manufacturing PMI for July will be released at 9:45 a.m. ET.

The ISM manufacturing index for July is schedule for release at 10:00 a.m. ET.

Data on construction spending for June will be released at 10:00 a.m. ET.

The Treasury is set to auction 3-and 6-month bills at 11:30 a.m. ET.

Sell-Side Themes

Deutsche Bank downgraded Dollar General (NYSE: DG) to Hold and upgraded Dollar Tree (NASDAQ: DLTR) to Buy.

Sell-Side's Most Noteworthy Calls

RBC downgraded Royal Dutch Shell (NYSE: RDS-A) to Sector Perform.
Barclays downgraded Harley-Davidson (NYSE: HOG) to Underperform.
JPMorgan upgraded Costamare (NYSE: CMRE) to Neutral.
Citi initiated Etsy (NASDAQ: ETSY) at Buy.

Deal Talk

SolarCity (NASDAQ: SCTY) and Tesla (NASDAQ: TSLA) reached a merger agreement over the weekend, according to a regulatory filing dated Sunday. Tesla's CEO Elon Musk proposed to acquire SolarCity back in June. Musk also happens to be SolarCity's chairman and cousin to its CEO Lyndon Rive. An all-stock agreement values SolarCity at around $2.6 billion, or $25.83 a share. SolarCity's shareholders will receive 0.11 shares of Tesla's stock for each one share of SolarCity they own.

Didi will buy Uber's brand, business and data in China. Uber Technologies will receive 5.89 percent of the combined company with preferred equity interest equal to 17.7 percent of the economic benefits. Uber China’s other shareholders, including search giant Baidu (NASDAQ: BIDU), will get 2.3 percent of the economic interest in Didi Chuxing.

Last year, China's ride-hailing leaders Didi and Kuaidi joined forces, creating a homegrown juggernaut to fight off Uber. The merged company Didi Chuxing brought together backers Alibaba (NYSE: BABA) and Tencent, the country’s most valuable internet businesses. Apple (NASDAQ: AAPL) joined in this year with a $1 billion investment.

A consortium, including an affiliate of Shanghai Giant Network Technology and private equity firm Yunfeng Capital, founded by Alibaba's Jack Ma, announced Saturday it has entered into a definitive agreement with Caesars Interactive Entertainment (NASDAQ: CZR) to acquire Playtika for $4.4 billion in cash. Playtika will continue to operate independently out of its headquarters in Herzliya, Israel.

In The News

Donald Trump's campaign is pushing to reschedule two of the presidential debates set for this fall, but the Commission on Presidential Debates, the nonpartisan group responsible for scheduling, is standing firm. The campaign is concerned that two of the three presidential debates are set to take place on the same nights as nationally televised NFL games.

Chronically low crude prices are disrupting a critical financial lifeline across Asia and depriving economies of currency inflows they need to keep their currencies from depreciating too quickly.

Blogosphere

The Bears Will Be Back: Even behind the good news, there's little reason to believe Europe's banks are past the worst.

Trending

SCTY TSLA PN MCRB EBIX PEG GWR UWTI QGEN MTU FTR GSK COF ARIA VIAB DIS

A new #HarryPotter play that opened to swooning reviews and delighted gasps from the audience marks the end of the journey for the beloved boy wizard, his creator J.K. Rowling said at the play's premiere in London on Saturday.

Billed as the eighth installment in the series, the play "Harry Potter and the Cursed Child" and a book based on its script have helped awaken a new wave of Pottermania five years since the previous episode was made into a movie. Fans crowded bookstores for the midnight release of the book.

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