Financial and Economic Brief - August 1, 2017by © Liberty Publishing, Inc.
Discovery To Acquire Scripps
Discovery Communications (Discovery Channel, TLC, Animal Planet, and the Oprah Winfrey Network) reached a deal to acquire Scripps Networks (HGTV, The Food Network and Travel Channel) for about $11.9 billion. This is a major consolidation of cable TV networks during a time when viewers are changing the way they consume entertainment. "Scripps is one of the best run media companies in the world with terrific assets, strong brands and popular talent and formats," Discovery CEO David Zaslav said in a statement. Discovery said it "sees strong opportunities" to pursue more female viewers through the transaction.
SNAP Shares Fall
Today as markets open, shares of Snap Inc. owner of the Snapchat messaging app fell as much as 5% to a new low, below its initial public offering price, as a "share lock up" ended. The impact to the stock may have been softened by investor awareness of the "expiration date," said Drexel Hamilton analyst Brian White, who recommends that investors buy the stock. "If you can look out one year, this is a great buying opportunity at this level. The company is a big disrupter and an enormous mobile advertising platform," White said.
Fischer: Weal Economy = Low Rates
The Fed's vice chairman Stanley Fischer said in a speech that interest rates aren't just low because the Federal Reserve is keeping them there but rather because of a weak economy and other factors. He also noted that low rates send "a powerful signal that the growth potential of the economy may be limited." At a time when President Trump is discussing raising the pace of the U.S. economy to at least 3% growth, Fischer cited Congressional Budget Office estimates closer to 1.5%. Since December 2015, the Fed has raised the funds rate four times, but government bond yields remain low and financial conditions have eased rather than tightened.