What’s News in Markets: Ice Cream Spin-Off, Paramount Bid, Surprise Delivery
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Hey, listeners. It's Saturday, March 23rd. I'm Francesca Fontana for The Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. Welcome back, everybody. Let's start off with a number of the day today, not to totally steal from Sesame Street, which is precisely what I'm doing. The number of the day today is three. That is how many interest rate cuts the Fed is expecting in 2024, as we heard on Wednesday. Jerome Powell and co. reaffirmed their outlook of three rate cuts, so it didn't change. But some investors were expecting the Fed to dial back their forecasts. So the market got in a good rally as a result.
All three of the major U.S. stock indexes hit new records on Wednesday, and then they did it again on Thursday. Before this week, the last time they hit simultaneous records was way back in November 2021, which was before the Fed started raising rates. And because the pandemic has had an enduring effect on my ability to conceptualize linear time, that feels like four months ago and also 10 years ago. I mean, God forbid I have to write a check. I am always writing the wrong year on everything. I don't know. Is it just me? I don't think it is. Is it? All right, enough about time. Let's talk about something important, ice cream. Ben & Jerry's, Breyers, Talenti, Walls, all ice cream brands, and all made by Unilever, which is this consumer goods giant that makes everything from TRESemmé shampoo to Dove soap to Hellman's mayonnaise.
And as you stalwart What's News listeners already heard this week, Unilever is spinning off its ice cream division into a separate company. Why? Well, they got a new CEO, and he wants to streamline. Like I said, its portfolio of brands is huge, and he also wants to boost growth. And to my shock, ice cream sales have been pretty weak for Unilever lately. Like many five-year-olds might assume, I too thought that ice cream would be doing just gangbuster numbers, but I was wrong. Last year, Unilever's ice cream sales rose 2.3%, which was the weakest growth rate of any of its units. So, all in all, it seemed like a welcome move in investors' eyes. Unilever's U.S.-listed shares gained almost 3% on Tuesday, which was the biggest move in either direction the stock has had in weeks, and shares went on to end the week higher.
Paramount is being courted by multiple suitors, and one is after its Hollywood business. The Journal reported this week that Apollo, a private equity firm, made an $11 billion offer to buy the company's film and TV studio.
How did the Fed's outlook of three interest-rate cuts spark this week's market rally?
That's according to people familiar with the situation. The film business is considered the crown jewel. It's the studio that recently brought us Top Gun Maverick and A Quiet Place, etc., The TV side, the cable networks, not so much. So Paramount's directors are reviewing this bid from Apollo and another bid from the production company Skydance Media, which is looking to merge with all of Paramount. But what's kind of nuts is Apollo's bid is more than the entire company's market cap. Not just the Hollywood unit, the whole thing, which was $7.7 billion when we broke the news of the bid. Paramount shares ended up jumping 12% on the news, but handed back almost all of those gains by the end of the week.
And to round out the week, FedEx had a surprise delivery for its shareholders on Thursday, a better than expected quarter. The company beat profit expectations despite lower demand for parcel deliveries, which I'll come back to in a second.
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Chapters
2 chaptersSpeakers
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