Yahoo Finance's Emily McCormick joins The First Trade with Alexis Christoforous and Brian Sozzi to discuss a potential acquisition of Xilinx by AMD, market action ahead of the opening bell, and much more.
ALEXIS CHRISTOFOROUS: Stocks are on track for their best weekly gain since August. Investors are hopeful that lawmakers will pass a slimmed down stimulus plan before the election aimed at parts of the economy.
And it's that investor confidence that has breathed new life into recent market laggards like energy and material companies. Those stocks have been the driving force behind this week's market rally. And chip stocks are on the move this morning on news of more consolidation in the industry. "The Wall Street Journal" is reporting that AMD is in advanced talks to buy its rival Xilinx. It's a deal that could be worth $30 billion.
Taking a look at stock futures right now, we've got Dow futures rallying more than 140 points, NASDAQ futures up better than 70, and S&P futures up 19. Yahoo Finance's Emily McCormick is with us now. Emily, I know you've got your eye on the market, but particularly on the Dow Jones Transportation Index, which hit an all-time high yesterday.
EMILY MCCORMICK: That's right, Alexis. And taking a look at that, will be interesting to continue monitoring that index as well as some of the stocks therein. That, of course, including airlines, delivery services, and railroads. A couple reasons here for that. Now, just taking a look at the premarket session, we are seeing airlines continuing to climb despite House Speaker Nancy Pelosi saying yesterday that she would not support a stimulus package that just focused on providing aid to airlines, since she and House Democrats have been pushing for more comprehensive legislation.
Now, still, that back-and-forth from lawmakers is something that markets have been closely monitoring this week, although, as you mentioned, we are seeing those three major indices on track for weekly gains, if they're able to hold onto these advances into today's close.
I also want to highlight with that Dow Jones Transportation Index there has been some talk among analysts that investors may be starting to price in the prospects of a blue wave here following the November elections, the prospects that we could get a big fiscal stimulus package as well as more infrastructure spending, all of which would help many of the stocks within that. So something to keep watching there as well.
I also want to note that we are seeing Treasury yields continuing to climb for much of this week and also this morning. We have that 10-year yield hovering near its highest level since June, currently yielding about 78 basis points. Brian and Alexis?
BRIAN SOZZI: And Emily, potentially some blockbuster deal news for AMD.
EMILY MCCORMICK: That's right, Brian. So taking a look here, we do have Advanced Micro Devices reportedly in advanced discussions to buy Xilinx. That takeover could be valued at about $30 billion. That's according to reports from "The Wall Street Journal" and Bloomberg, according to people familiar with the matter.
Now, I did reach out to both AMD and Xilinx. They weren't able to provide an immediate comment in regards to these reports. I do want to note here that this is potentially going to be the latest major deal that we see within the semiconductor space. Remember that we have seen NVIDIA just having completed a $7 billion acquisition of Mellanox earlier this year, and just last month announced a $40 billion deal to purchase Arm from SoftBank. So quite a bit of consolidation and deal making activity happening in the chip space.
Now, with an AMD and a Xilinx tie up, that's something that could really help AMD push further into the telecommunications market. Xilinx makes programmable chips that can be used for wireless networks as well as 5G with that impending upgrade cycle coming along in the industry. We also have the company, Xilinx, any way, could make AMD a more formidable competitor to Intel, since that company has had a major hold over the market for data [? to ?] center computer chips.
Now, taking a look at both of these stocks here, we are seeing shares of Xilinx on the rise, surging more than 16% in premarket trading. We are seeing shares of AMD down about 3%. Brian and Alexis.