PayPal shares declined in premarket trading after a report of security-related disruptions to payments in Germany.
Germany’s Suddeutsche Zeitung reported that a security issue with PayPal systems designed to weed out fraudulent payments prompted German banks to block some transfers, disrupting business for merchants in Europe’s largest economy.
With the looming shift in Fed leadership and growing concern about the AI trade, Interactive Brokers’ chief strategist is penciling in modest losses for stocks next year.
EchoStar rose Wednesday as Wall Street digested recent reports that Tesla CEO Elon Musk’s SpaceX is planning an IPO next year.
Analysts at Morgan Stanley upgraded satellite operator EchoStar — the current owner of Dish Network and Boost Mobile cell services — to “overweight” (or buy) from “equal weight” (or hold) and upped their price target for the stock to $110 from $82.
In September, EchoStar struck a $17 billion deal — $8.5 billion in cash and $8.5 billion in SpaceX stock — to let SpaceX use some of its spectrum rights. EchoStar expanded that deal in November, selling additional spectrum rights to SpaceX for $2.7 billion in stock.
So, a massive IPO valuation for SpaceX would obviously be a good thing for EchoStar shareholders.
Morgan Stanley analysts wrote:
“EchoStar is receiving SpaceX shares at $212 per SpaceX share. Every $100 of SpaceX share price equals $18/SATS share in value, or 20% to SATS equity. The WSJ reported that SpaceX is launching a secondary sale valuing the company at $800bn, although the CEO denied that was the case. At that $400+/share valuation, our SATS bull case would move to $150.”
EchoStar’s surging performance this year — it’s up 330% — has largely come as the company has shifted to selling access to its stockpile of spectrum rights after pressure from the Trump administration’s FCC.
In August, it inked a deal to sell spectrum rights to AT&T for $23 billion in cash, sending its shares up 70% in a single session. Morgan Stanley analysts see continued strong demand for spectrum assets from wireless companies as another reason for optimism around EchoStar shares.
“Spectrum is an appreciating asset,” they wrote. “And we expect both Verizon and T-Mobile to be aggressive.”
“Sell your high-flying winners and speculative stocks ahead of the Fed, but the US economy is fine” seems to be the market narrative du jour.
The likes of Bloom Energy, IREN, Opendoor Technologies, Rigetti Computing, IonQ, and Oklo all fell at least 2.5% in early trading. Meanwhile, a Goldman Sachs basket that tracks the performance of cyclical stocks relative to more defensive companies is working on its ninth straight day of gains, which would be its longest winning streak since 2017. The SPDR S&P Regional Banking ETF, another very economically relevant part of the market, is also trading to the upside.
Goldman Sachs’ index of high-beta momentum longs (that is, stocks that have been trending higher) is down about 1.5% in early trading, while the opposite group, high-beta momentum shorts, is enjoying a nice bounce.
In other words, it looks like traders are taking down some risk in volatile long/short trades ahead of the US central bank’s final meeting of the year amid fears of a so-called “hawkish cut.” Speculative stocks, and in particular small-caps, had been buoyed by the resumption of rate cuts this year.
Palantir rose early Wednesday after officially announcing a new deal — valued at $448 million — with the US Navy to manage its submarine maintenance and supply chain.
While Palantir has been rapidly building its business selling software that helps private enterprise companies better use AI technology, its largest customer remains the US government.
