Finimize - ⚔️ Netflix, Amazon, prepare for war

What’s going on here?

Chinese stocks just had their best week since 2008, fueled by interest rate cuts and $114 billion worth of government support.

What does this mean?

The Chinese government’s piling money into its economy, in an effort to break a vicious cycle of poor investment and spending. It introduced economic support measures worth $114 billion last week, alongside interest rate cuts aimed at shoring up the country’s financial environment. That should give the stock market a shot in the arm: Chinese stocks had been flagging, remember, dragged down by a property crisis, weak domestic spending, and geopolitical tensions. And according to The China Securities Journal, the stock market serves as both a barometer for the economy and a thermometer for how investors are feeling. By bolstering the market, then, the government hopes to encourage a broader economic recovery.

Why should I care?

For markets: Golden stocks for a Golden Week.

Mixed economic survey data out on Monday may have had investors a little worried, but the government’s plan to give folk a reason to believe in China’s stocks seems to have worked – at least for now. A key index of Chinese stocks jumped over 8% on Monday – its best day in 16 years – and formally entered a “bull market”, having risen 20% from its lows. And zooming in on China’s troubled property developers, they jumped even more. See, the government’s support package included a bunch of measures aimed at boosting the real estate market. So companies that actually build property should benefit – and they were, in fact, up an average of 16% on Monday. Now, Chinese stock markets will be closed the rest of this week for the country’s Golden Week holiday. So the government will probably be hoping that investors return with the same optimism – and that, you know, China as a whole is turning a corner.

What’s going on here?

DirecTV has inked a deal to buy EchoStar’s satellite TV division, Dish, creating one of the biggest pay-TV distributors in an effort to contend with the big guns.

What does this mean?

After years of on-and-off discussions, DirecTV and EchoStar are teaming up to take on giants like Netflix and Amazon Prime Video. The duo plan to save streamers hours of scrolling time by simplifying what's on offer. That means smaller programming packages and – hopefully – a better experience for their combined 20 million viewers. DirecTV will pay just a single dollar for Dish's TV business and take on $9.75 billion of its debt in return. Plus, EchoStar will get a $2.5 billion financing boost from DirecTV and private equity firm TPG, helping to ease its debt woes.

Why should I care?

For markets: Competition is good, except when it’s not.

DirecTV and EchoStar could save around $1 billion a year by combining their costs. That might help the new firm win back some of the subscribers that the two companies lost. And sure, the duo has a plan to adapt to changing viewer habits – but those habits are being driven by the competition, so it’ll be a tough fight. That’s, of course, assuming that the deal even gets approved by regulators.

Zooming out: Deals are slippery things.

DirecTV and EchoStar’s deal took years to get to this point. But spare a thought for the many that don’t work out along the way. Across the pond, British real estate listing platform Rightmove buffeted a fourth takeover offer from Australia’s REA Group worth just over $8 billion. The UK company’s stock dropped after REA said it wouldn’t be upping its bid. And maybe that’s just as well: deals can be risky business. Just look at X. After Elon Musk paid $44 billion for then-called Twitter, investment manager Fidelity – which owns a stake – slashed its valuation of the platform to just $9.4 billion. (Tweet that. Just kidding: don’t.)