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Amazon shares boosted by $3.9bn One Medical acquisition

In today’s top stories, Amazon cements its move into healthcare with the purchase of 1Life Healthcare’s One Medical and Tesla expands its Supercharger network to other EVs. In other tech news, MEAG Munich Ergo doubled its Nvidia investment, while Deuterium Capital’s John Ricciardi forecasts another tech crash. Analysts are also divided on China stocks, with varying investment cases being released.

Amazon buys One Medical

Last week, the ecommerce giant announced its third largest ever deal, which will see it acquire primary care firm One Medical for $3.9bn. As investors digest the news, TechCrunch’s Walter Thompson said the acquisition is a “bright, blinking sign that the world’s largest retailer is not afraid of regulatory oversight or intervention”, while Citi analyst Daniel Grosslight told Reuters that the deal makes sense as “blending of virtual and in-person care is core to both One Medical and Amazon Care’s strategy”.

MEAG buys up Apple and other stocks

MEAG Munich Ergo Asset Management — the investment arm of one of the world’s biggest insurers — has made some changes to its US-traded investments. The asset manager initiated a stake in Apple, buying 242,657 shares in the second quarter. It also purchased 66,593 additional shares in Nvidia, doubling its investment, and 247,702 shares in Pfizer. MEAG owned $337bn in assets as of 31 March 2022.

Another tech crash could be coming

Deuterium Capital’s John Ricciardi told CNBC’s Squawk Box Europe that it’s not time to buy the dip just yet as tech stocks could be in for another selloff in September and October. Amid this backdrop, Ricciardi said his firm is betting on healthcare and telecommunications companies instead, as these are likely to remain major investment themes. He named Pfizer, Merck, AT&T and Verizon as potential picks.

Tesla expands Supercharger network

The EV giant is attempting to obtain public funding to build charging equipment for electric vehicles made by other manufacturers as the Biden administration seeks to expand the country’s charging infrastructure. According to the White House, Tesla will begin production of the new equipment by the end of the year. However, at the same time, CEO Elon Musk is juggling another legal battle, this time from shareholders claiming he had the funding to take the company private.

Bull and bear case for China

Analysts are divided on China stocks, with Bloomberg reporting that some fund managers remain hopeful the economy will reverse its losses. Fidelity International, abrdn and GAM Investment Management are all expecting China to outperform global markets in H2 despite this month’s selloff. However, Goldman Sachs lowered its earnings expectations for Chinese equities on Monday, forecasting that the MSCI China Index will see 0% growth this year, down from 4%.

Earnings preview: easyJet

EasyJet’s share price has been battered by a series of bad headlines surrounding the business, which include the news that it is cancelling flights at a greater rate than its competitors, alongside announcements that its CEO has abruptly departed. Analysts blame easyJet’s tactic of centring its flights around capacity-strained airports for this recent chaos, and it’s expected to report yet another loss at its upcoming results on 26 July.

Earnings preview: Lloyds

Lloyds Bank has seen its revenues rise thanks to increased interest rates — but it is also grappling with the fact that the cost of business is higher, thanks to this inflationary environment. Chief executive Charlie Nunn is working on a plan to restructure the bank and reduce its reliance on financial products like mortgages and SME loans, which are impacted by interest rate changes.

 

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