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Welcome to Read Sunday, your essential source for a concise and impactful weekly Business & Finance recap. Dive into the pivotal market highlights from the week, distilled for your convenience, and stay tuned for the thought-provoking editor's piece that rounds off your Sunday with insightful perspectives.

Market Recap

This Week’s Headlines

Public Markets

• U.S. retail giant Walmart has announced a significant investment of over $9 billion, to be carried out over a two-year timeframe, aimed at enhancing and modernizing several of its stores in the United States. These upgrades will encompass improved store layouts, expanded product offerings, and the incorporation of new technological advancements. To kickstart this initiative, Walmart is re-launching 117 stores located in 30 different states this Friday, with a total investment exceeding $500 million. The company's comprehensive plan includes the modernization of more than 1,400 out of its 4,717 Walmart stores nationwide. It's important to note that these remodels do not pertain to its warehouse club chain, Sam's Club. (CNBC)

• On Tuesday, the U.S. government made its case in federal court, arguing that JetBlue Airways' planned $3.8 billion acquisition of ultra-low-cost carrier Spirit Airlines could result in higher airfares and a reduction in the number of flights. The Justice Department is urging a federal judge to block the deal at the outset of a closely-watched antitrust trial. This legal case, taking place in federal court in Boston, is a part of the broader efforts led by President Joe Biden's administration to maintain competition in the market for low-cost airlines. The goal is to ensure that air travel remains affordable for a larger number of consumers in the United States. (RET)

• Toyota Motor is implementing significant changes for its U.S. auto-factory workers, reflecting the influence of gains made by the United Auto Workers in Detroit. Despite the absence of unions in its U.S. factories, Toyota is raising the pay for most of its assembly plant employees by 9%, increasing the hourly wage from $31.86 to $34.80, effective from January 1st. This move is indicative of the broader impact on the auto industry as a result of developments within the United Auto Workers. (WSJ)

• The Pentagon's Space Development Agency (SDA) has disclosed contracts totaling around $1.3 billion awarded to York Space and Northrop Grumman for the construction of communication satellites.

  These contracts involve the construction of 100 satellites as part of the U.S. military's Proliferated Warfighter Space Architecture. These satellites are designated as "Alpha" variant prototypes within the "Tranche 2 Transport Layer" constellation, commonly referred to as T2TL-Alpha. They will play a crucial role in delivering encrypted communication capabilities. (CNBC)

Economy

• Home prices in the largest 20 metropolitan areas of the United States continued their upward trend for the sixth consecutive month, a reflection of the ongoing housing market challenges related to a shortage of available homes. (MW)

• The US Treasury has revised its estimate for federal borrowing in the current quarter downward, citing stronger-than-anticipated revenues. This development provides some respite for investors who have been worried about the rapidly expanding fiscal deficit. The Treasury Department has reduced its projected net borrowing for the period from October to December to $776 billion, a notable decrease from the previously forecasted $852 billion in late July. Debt managers have maintained their estimate for the Treasury's cash balance at the end of December at $750 billion. (BBN)

• In the previous year, New York City's pensions disbursed approximately $1.7 billion in fees to Wall Street money managers, marking a notable increase of around $150 million compared to the year before. According to the city's annual comprehensive financial report, released on Friday, the fees paid by the city's five pensions surged by 10%. This growth rate outpaced the increase in assets, with the combined value of the funds for the city's police officers, firefighters, teachers, civil service employees, and school district personnel rising by approximately 6% to reach $253.3 billion for the fiscal year ending on June 30. (BBN)

• In August, U.S. crude oil production reached a new record high, hitting 13.05 million barrels per day, as reported by the U.S. Energy Information Administration in its monthly update. This level of output exceeded a previous record set in November 2019 when production reached 13 million barrels per day. (BBN)

Mergers & Acquisitions

• Walt Disney has officially initiated the process of acquiring Comcast's one-third stake in Hulu. This transaction will grant Disney complete ownership of the streaming service, providing the company with the flexibility to integrate it into its Disney+ streaming platform.

  Disney has disclosed that it anticipates making a payment of approximately $8.61 billion to Comcast's parent company, NBCUniversal, by December 1st. This amount corresponds to NBCUniversal's portion of the guaranteed floor value of $27.5 billion for Hulu, which was agreed upon when NBCUniversal agreed to sell its stake to Disney in 2019. It takes into account the expected contributions payable by NBCUniversal to Disney. (RET)

• Platinum Equity is currently in advanced negotiations to acquire Kohler Co.'s generators division for a sum exceeding $3 billion. (BBN)

• Healthpeak Properties and Physicians Realty Trust are set to merge in an all-stock deal valued at $21 billion, resulting in a 2.26% increase in Healthpeak Properties' stock and a 1.81% increase in Physicians Realty Trust's stock, both indicated by green up-pointing triangles. According to the terms of the agreement, each share of Physicians Realty Trust will be converted into 0.674 newly issued shares of Healthpeak Properties. The merger is anticipated to generate synergies with a run-rate of at least $40 million by the end of the first year and potentially up to $60 million by the end of the second year following the completion of the merger. (WSJ)

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