The Monday Market Minute
- Global stocks gain as AstraZeneca resumes its late-stage coronavirus vaccine testing following the sudden illness of one of its trial participants.
- Nvidia agrees to buy rival chipmaker Arm from SoftBank for around $40 billion, while Gilead Sciences swoops in to buy breast cancer treatment specialist Immunomedics for $21 billion.
- Oracle emerges as the preferred buyer for TikTok, according to multiple media reports, but any deal still needs the approval of both the U.S. and Chinese governments.
- Treasury yields hold steady ahead of the Federal Reserve’s two-day policy meeting, which kicks-off Tuesday, while the dollar continues to slip lower against its global currency peers.
- U.S. equity futures suggest a firmer open on Wall Street heading into a light week for economic and corporate releases highlight by retail sales on Wednesday and weekly jobless claims Thursday.
U.S. equity futures jumped higher Monday as investors reacted to a series of multi-billion takeovers in the tech and pharmaceutical sectors and cheered the resumption of AstraZeneca’s (AZN) – Get Report coronvavirus vaccine trial.
AstraZeneca, which paused the late-stage trial it’s conducting with researchers at Oxford University last week following the unexplained illness of one of its participants, resumed testing over the weekend and said it will “continue to work with health authorities across the world and be guided as to when other clinical trials can resume to provide the vaccine broadly, equitably and at no profit during this pandemic.”
That news was preceded by comments from Pfizer (PFE) – Get Report CEO Albert Bourla, who suggested that Americans could be receiving doses of its experimental COVID-19 vaccine, which it hopes to have approved by regulators in October, before the end of the year.
With solid advances in the vaccine chase, as well as a $40 billion tech sector deal which will see the biggest U.S. chipmaker, Nvidia (NVDA) – Get Report purchase British rival Arm from Japan’s SoftBank Group, investors were than willing to extend risk into the start of the Monday session and ahead of a relatively light week week for economic and earnings releases highlighted by the Federal Reserve’s rate decision and press conference Wednesday.
Futures contracts tied to the Dow Jones Industrial Average suggest a 205 opening bell gain , while those linked to the S&P 500 indicate a 33 point advance for the broader benchmark .
The Nasdaq Composite index, which has fallen 8.45% so far this month, is poised for a 135 point jump at the start of trading, pulled higher in part by an 8% pre-market surge for Oracle Corp. (ORCL) – Get Report, which looks set to emerge as the preferred buyer for the U.S. assets of ByteDance’s TikTok video sharing app.
Drug cancer specialist Immunomedics (IMMU) – Get Report as also on the move, rising more than 106% in pre-market trading after accepting an $88 per share bid from Gilead Sciences (GILD) – Get Report that values the Morris Plains, NJ-maker of the breast cancer treatment Trodelvy at around $21 billion.
European stocks were also boosted by the tech-sector purchases, as well as the market’s broader vaccine optimism and a more positive outlook on Germany’s second half recovery from the Economy Ministry.
The Stoxx 600 benchmark ticked 0.15% higher in the opening hours of trading, paced by modest gains in Paris and Frankfurt, while Britain’s FTSE 100 slipped 0.1% on the back of weakness in the energy sector and a firmer pound.
Benchmark 10-year Treasury note yields held at 0.664% heading into another heavy week of new debt sales, as well as the Fed statement Wednesday, while the U.S. dollar index drifted 0.3% lower against a basket of six global currency peers to trade at 93.032.
Oil prices continued to lag the broader market, even with the dollar sagging in overnight trade, as concerns for world demand and robust supplies ahead of this week’s OPEC meeting in Vienna that will look at the cartel’s compliance with output cuts agreed earlier this summer.
WTI contracts for October delivery, the U.S. benchmark, traded 48 cents lower from their Friday close in New York at $36.85 per barrel in early European dealing while Brent contracts for November, the new global benchmark, were seen 43 cents lower at $39.40 per barrel.
Overnight in Asia, AstraZeneca’s vaccine trial resumption, as well as the pharma and tech-sector M&A activity helped boost the Nikkei 225 to a 0.65% session gain for the Nikkei 225, which closed at 23,559.30 points, while the region-wide MSCI ex-Japan benchmark rose 0.8% thanks in part to solid moves in China, Australia and South Korea.