PTC Rises on Schneider Electric's $23.7 Billion Takeover Deal | Closing Bell

Comprehensive cross-platform coverage of the U.S. market close on Bloomberg Television, Bloomberg Radio, and YouTube with Scarlet Fu, Hema Parmar, Carol Massar and Norah Mulinda.

All right, we are about two minutes away from the end of the trading day. Scarlet Fu and Hema Palmer here to take you through the closing bell. We've got a global simulcast. We're joined right now by Carol Massar and Norah Melinda. and we bring together our Bloomberg Television, Radio, and YouTube audiences worldwide. Welcome everyone to parse through the most crucial moments of the trading day. Carol, um, it's been up, up, up and we've stayed pretty much up this whole day.

Yeah, just seeing a little bit of selling into the clothes, but I mean, you're right. Um Scarlet, we've seen uh certainly a risk on trade. We're looking at what a

Nasdaq 100 and a Nasdaq that could see another record today.

Yeah, I mean, also looking at the S&P 500, it's higher by about six tenths of a percent, but what was really interesting that Carol and I were looking at is we talked so much about tech, but what we were seeing really driving the market at least in the S&P 500, that's materials.

Yeah. Good old materials, guys.

And it's been a day for deals too. We've had the deal between Schneider and PTC for $23 billion. We've had the CH Robinson buying RXO. So it's been eventful when it comes to some of these giant billion dollar deals.

And as Hema was just reminding us, this is all happening as yields continue to stay near those multi-decade highs. Carol, I'm looking at the 10-year yield at 5.31%. A lot of people are saying it feels inevitable that the 30 year is going to get to 6%.

Listen, we were talking with Ed Harrison of our own Bloomberg team, 6%, could we even see 7%? Like there are things that we not kind of need to be open to Norah.

I I mean, yeah, I think that was what's really interesting is we're talking to folks about whether or not this can continue to go higher, but I mean, for right now, we're seeing the benchmark sitting at about 5.31%.

Yeah. Uh this is a three-day rally for the S&P 500. For the Nasdaq, Carol as you mentioned, record highs, four-day gains for the Nasdaq composite and the Nasdaq 100. There you have the closing bells and we are looking at uh green arrows all around for these major indexes. The S&P 500 gaining, uh look at that, about 6/10 of 1%. The Dow Industrials up by 2/10 of 1%, but the Nasdaq, the clear winner here, up 1.1%. The Russell 2000, um up about half of 1% on the day.

All right, guys, let's uh just go back to the big caps if I may. S&P 500 and it definitely has been a risk off trade for the most part, Scarlet. not everything's up. Uh 319 names though gaining in the S&P 500, 182 to the downside and you've got three unchanged.

All right, let's take a look at the IMAP, which uh splits the S&P 500 up into 11 industry groups and you can see a lot of green there. Uh the sole red slice of the pie is real estate Investment Trust and of course, the waiting is not very large, so it's a very thin wedge there. Uh that is down 4/10 of 1%. Everything else is up. The best performers here, materials, as you guys mentioned, up 1.3%. Communication services is gaining about 1.1% and energy up almost 1%.

All right guys, let's get to some of the individual gainers if I may. and let's go to no surprise uh to see this one soaring. We're talking about PTC. Uh this is of course the stock that was the target of uh Schneider Electric. So PTC up about 33 and a half% in today's session. Schneider Electric will acquire the US engineering software provider PTC in a $23.7 billion dollar deal. Hema, you mentioned uh the deal flow that we had on this Monday. It marks the French industrial conglomerate's biggest takeover. It's all cash, uh $205 a share values PTC's equity at about 22.6 billion and represents a 42% premium to the last closing price. So quite a hefty premium which might be why Schneider has been under a lot of pressure. Maybe investors are a little concerned about what they're paying, but time will tell. The deal was first reported on Sunday by the FT, but it's going to boost Schneider's offering of software solutions that can aid manufacturers with designing industrial products and engineering specifications. So that's where it all kind of rolls in.

All right, let's go on over to SpaceX. That one up about 7.6% in today's session, just got the high.

Oh, closing at its highs, yeah.

Oh, did it? Oh okay, yeah. All right, thank you for that. Um so closing at a high level since June. Morgan Stanley's analyst say Elon's satellite, space and AI conglomerate is one of the cheapest ways to play quote unquote, the strong optionality of the space and intelligence economy. Uh the analyst thinks the AI product releases, Starship progress and more high-priced Neo cloud deals could push the stock closer to $300. That's his price target on the stock. The stock uh closing at about 171 a share. He does have an overweight. So everybody, you know, love hate, like it goes back and forth on some of these names.

One more, I just want to throw this in because this is interesting, caught my attention. Courtesy of Bloomberg's Bill Maloney, who pointed out the trade App11. It was a top gainer in the S&P and Nasdaq uh earlier in today's session. The stock snapping its longest losing streak ever. It was down on Friday, down nine consecutive days in a row. The stock was up uh about 5%. I didn't see what the catalyst was. It's down about 60% year to date. Um but nonetheless, investors came back after nine days of declines.

It's kind of memey, right? That one, Apple1?

Yeah. Yeah. Yeah. Exactly. Exactly. So, there you go. It is kind of memey. It moves around a lot if you take a look at the share price.

Well, some decliners for us. Uh CH Robinson worldwide, we've been talking about deals. Well, CH Robinson buying RXO for nearly $6 billion as a $5.8 billion deal. So we're talking trucking and logistics. The company seeing its worst day since July. And so much about artificial intelligence, we tend to keep our focus there. Well, this is a bet on artificial intelligence helping the company's improve efficiency in a challenging freight market and it's a cash and stock transaction with a deal expected to close in the first half of next year. RXO shareholders are expected to own about 11% of the combined company upon closing and we do see shares of CH Robinson down by about 11% on the day.

And from there, pivoting over to Align Technology and if you're not familiar with this company, this is the maker of Invisalign, which

I myself wear, actually. I'm not wearing it right now, but should be. Uh the company actually facing renewed claims that

Your teeth look amazing, by the way.

Thank you. Still working on it. One more week to go. Well done. I appreciate it. Uh well, the company's actually facing renewed claims that it's monopolizing the market for clear dental aligner and Carol and I were just chatting about this earlier and I'm trying to think of any other company that reminds me of Invisalign. We had smile direct and maybe, if you guys can think of any other names, I can't.

I feel like they've all advertised on Facebook at one point or another.

Right. and then they evaporate and disappear somewhere. Well, the stock is down about uh 2%, a little over 2% and this is just over the idea that investors are a bit concerned when you see any potential legal overhangs here. Uh and lastly, let's talk food. I always love to talk about food. Chipotle, the share is down about 4.7%. So we really saw uh some heavy volume here when it comes to this company and the trading activity, also heavy options activity. Uh earlier today we did see uh a report out of Bloomberg that uh some of the options activity had volumes of more than 246% above the 20-day average, but this is a company that's really struggled down about 17% year to date. If you guys remember just what maybe a couple months ago, we were just talking about Cyclospora and whether or not that was actually affecting the company and uh the lettuce and a lot of concern there with consumers not really being interested in going to Chipotle. Well, it seems like it's still kind of struggling there.

Yeah, it's it's kind of cast a shadow over the company's stock at least. All right, let's take a look at what's happening in the bond space. Um you could see that yields at the short end have come down, actually little changed at this point. The two-year yield at 4.81%. Um but yields did move up uh the further out you go on the yield curve. The 10-year yield uh at 5.30% and the 30-year yield at 5.66%. So once again, multi-decade highs, a report on US services showed cost pressures grew the most in more than four years. So that of course keeping that inflation concern in the markets.

All right, I love this story. It's uh courtesy of the information and it's about Meta and Microsoft apparently are working to cut their employees use of Claude. Uh, information citing unidentified uh people familiar with the matter. Microsoft, check this out, lowering its earlier projected a billion spending on internal use of Claude AI by more than a third after it asked staff to uh use less Claude to save on costs and spend more time using Microsoft's homegrown AI tools according to the report, Norah.

It's really interesting. Yeah, they're not the only one, but it's really interesting especially when you see how many people spend most of their day on a lot of these chatbots and whether it's chat GPT, whether it's Claude, Gemini, you name it. A lot of people are continuing to use this in the workplace. So it's interesting to see Microsoft and, you know, meta kind of redirecting their workers.

Costs money. It costs money, right guys? It's expensive.

And redirecting to Muse, I would guess too. Right, it must have to be.

It's incredible. They they've slashed it by half from 60,000 people down using it to 30,000 users.

Use on your own time, I think is the message, right?

And pay for it, exactly. Uh the other story that caught my eye and Carol, I know this is something that you pay attention to given that you've recently been paying college tuition.

US colleges are finally getting the message that prices are too high. Emory and Henry University, not Emory in Atlanta, just Emory and Henry University in rural Virginia, cut its tuition in half to 19,000 from almost $40,000. And of course the goal is to boost enrollment, but it's a real shift away from the previous practice of, you know, having a high sticker price and then offering steep discounts on it.

There's so much stuff going on, right? You know, Scarlet, we've talked about because you too have kids, you know, in college and have gone to college. It's just this whole idea of how expensive it's got and it's also kids are coming out and and maybe the job market isn't what they were promised. And I think we're rethinking um kind of what it's all about. There's also not as many kids being born and so maybe we don't need all these institutions.

I'm Canadian, so I will say that having moved here, um and coming to learn about the cost of education, it really is quite a shift from some other places where um it's definitely uh not the sticker prices that we're seeing here. At least one undergraduate.

You're so polite. You're so polite. It's bananas here. It is.

But I think what's also interesting in the story is they're just talking about how folks are actually a bit more skeptical of the payoff when it comes to four-year degrees, especially when you think about bills that could potentially approach $400,000, which is insane, but the truth.

Well, the schools that are not cutting their prices, we know are anything that's considered elite, the top 20, the top 50, they have pricing power and they're going to continue to charge what they can.

I love that you went there. I said to I think somebody in the news room like, tell me when Harvard and Yale are cutting their price.