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Closing: vaccine and M & A news boosted US stocks to close higher by more than 300 points
Sep 15,2020 07:47CST
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SMM: in the early morning of the 15th, U. S. stocks closed higher on Monday, with the Dow up more than 300 points. The market is concerned about the positive development of coronavirus vaccines and the latest wave of mergers and acquisitions by large companies. Oracle has established a partnership with TikTok. Nvidia will buy ARM, Gilead will buy Immunomedics, UBS and Credit Suisse are said to be in talks about a merger.

The Dow was up 327.69 points, or 1.18%, at 27993.33; the Nasdaq was up 203.11 points, or 1.87%, at 11056.65; and the S & P 500 was up 42.57, or 1.27%, at 3383.54.

American Express closed 3.8% higher on the Dow, 3.2% on Boeing, 3% on Apple and 2.4% on United Health (308.57, 7.09, 2.35%).

New energy vehicle stocks generally climbed. Tesla rose by more than 12%. Nikola rose by more than 11%.

Vaccine stocks generally rose, Inovio rose by more than 12%, Novak rose by more than 11%, Norvax rose by more than 7%, and AstraZeneca (54.02, 0.29,0.54%) rose by about 0.5%.

Peter Cardillo, chief market economist at Spartan Capital Securities, said: "part of the rally in US stocks was driven by renewed optimism about vaccine research. This brings a glimmer of hope to the market. "

Josh Mahony, senior market analyst at IG, said: "the global market mood was optimistic at the beginning of the week, with progress in mergers and acquisitions and vaccine research and development, helping to boost market confidence after the recent decline."

The development between Oracle and TikTok "really helps to ease tensions in international relations," he added. With regard to vaccine research and development, the news that AstraZeneca resumed the vaccine trial greatly boosted market confidence, as a previous participant had serious complications, which could mean a major obstacle to vaccine development. "

"as Trump tells the states that there will be a vaccine before the election, people feel that we are ushering in an effective treatment," he said. "

Last week, the S & P 500 and Nasdaq composite indexes posted their worst week since late June, and the best-performing technology stocks of the year continued to take a hit.

But Goldman Sachs strategists said in a report, "despite the sharp decline in the past week, we remain optimistic about the US stock market in the coming months." After the financial crisis, the S & P 500 usually pulls back 5% or more for 20 trading days, which is basically in line with recent trends. "

The Fed will conclude its monetary policy meeting on Wednesday and is expected to update economic and interest rate forecasts and provide forecasts for 2023 for the first time.

Phase III trial of AstraZeneca recovery coronavirus vaccine

AstraZeneca (AZN) announced over the weekend that it had resumed phase III trials of its coronavirus vaccine developed jointly with the University of Oxford. The company suspended the vaccine trial last week because of serious adverse reactions and safety concerns among participants.

AstraZeneca issued a press release saying that it suspended clinical trials of novel coronavirus vaccine in multiple locations around the world on Sept. 6, so that the safety data could be reviewed by an independent committee. The review process has now been completed, and the safety of the vaccine has been approved by the independent commission and the UK Drug and Health products Administration.

In addition, the EU medical registration shows that AstraZeneca has restarted trials of the coronavirus vaccine in the UK.

Albert Bourla, chief executive of Pfizer, said it was "possible" for the United States to provide a coronavirus vaccine to the public by the end of the year.

A number of companies have announced huge M & An activities or deals

Oracle (ORCL) shares soared after several media reported that TikTok abandoned negotiations with Microsoft (205.41,1.38,0.68%) to sell TikTok in the United States in favor of a partnership with Oracle or a possible restructuring agreement.

According to reports: us Treasury Secretary Mnuchin said in an interview with the media this evening that the Treasury Department received a proposal over the weekend that Oracle, as a trusted data security compliance partner of TikTok, would represent the resolution of US national security issues. TikTok will continue to use the United States as its headquarters and create 20, 000 jobs in the United States. It is worth noting that the solution Mr Mnuchin is talking about is that Oracle, as a data compliance partner, is similar to Apple's data compliance scheme in Yunshang Guizhou, China, and does not involve the previous Trump request for the sale of TikTok or the transfer of TikTok's core technology.

It was previously reported that US Treasury Secretary Mnuchin said Oracle had been given the opportunity to acquire TikTok's US operations, and the deadline for the deal was Sept. 20. Mnuchin also said that TikTok also promised to build a global headquarters, which is expected to provide 200000 jobs.

Other companies also announced big deals over the weekend. Us chipmaker Nvidia (NVDA) has announced that it will buy Arm, a semiconductor IP provider owned by Japan's Softbank Corp. Group, for $40 billion, the largest deal in the semiconductor industry's history.

According to the terms of the transaction disclosed by the boards of directors of Nvidia, Softbank Corp. and Arm, Nvidia will pay a total of US $21.5 billion of Nvidia common shares and US $12 billion in cash to Softbank Corp. Group, of which US $2 billion should be paid at the time of the signing of the agreement. In addition, Softbank Corp. Group may receive up to $5 billion in cash or common shares based on the income structure on the premise that Arm meets specific financial performance targets.

(GILD), a Gilead science company known as the coronal drug Redsevir, announced that it will acquire biotech company Immunomedics (IMMU), for about $21 billion to acquire its original drug Trodelvy, to expand its cancer treatment business.

Gilead said it would make the acquisition at $88 a share in cash, financed by about $15 billion in cash on hand and $6 billion in newly issued debt. It expects the deal to close in the fourth quarter of 2020.

Verizon (Verizon) said it would buy Tracfone, from Inter-American Mobile (13.50.97, 7.74%) for $6.25 billion, of which $3.125 billion would be paid in cash and $3.125 billion in Verizon common stock. The deal is expected to close in the second half of 2021.

UBS and Credit Suisse are understood to be in talks about a merger.

Focus stocks

Apple may postpone the iPhone 12 release until October, while the new Apple Watch and iPad will be released at the fall launch on Sept. 16. According to the report, mass production of this year's iPhone12 did not begin until last week, and Apple has confirmed on the earnings call that the release of the new iPhone will be postponed. No, no, no.

Microsoft announced on Sunday that TikTok's parent company chose not to sell TikTok's US business to it. At the same time, there are reports that Oracle will become TikTok's "technology partner" in the United States, managing TikTok's US user data and is in talks to acquire a large stake in TikTok's US operations. The deal will be a "restructuring" rather than an "acquisition". In addition, Tuesday, September 15, is the final date set by Trump for the sale.

According to reports, Microsoft announced on Friday that it will launch a cloud gaming service on Tuesday, which aims to gradually dilute the connection between games and living rooms, while better dealing with competition from Sony (77.72, 0.70, 0.91%). Microsoft's cloud gaming service, officially known as Xbox Game Pass Ultimate, sells for $14.99 a month, and users can play more than 150 popular games via online video connections through Xbox consoles, Android devices and personal computers.

Gilead Science announced on Sunday that it would buy biotech company Immunomedics, for $21 billion, a move that will expand Gilead's access to cancer treatment.

Nvidia announced that it had agreed to buy Arm, a chipmaker owned by Softbank Corp. Group, for $40 billion in what would be the largest M & A deal in the chip industry's history.

Verizon said it would buy Tracfone, from Inter-American Mobile for $6.25 billion, of which $3.125 billion would be paid in cash and $3.125 billion in Verizon common stock. The deal is expected to close in the second half of 2021.

United CEO says the recovery of the aviation industry will not be achieved until the coronavirus vaccine is approved and widely used. The company does not expect to recover until the end of 2021, he said. If a new federal law is not passed, United will be forced to fire 16000 employees as early as next month after the funds allocated in March are used up.

Nikola, a maker of electric trucks, refuted shorting and submitted the documents to SEC.

Tesla is said to be planning to export Chinese-made Model 3 cars to Asian and European markets. According to another report, Tesla CEO Musk said that Tesla's autopilot system Autopilot will achieve a "quantum jump" improvement, and if the test is successful, it will push the upgrade to American car owners in mid-December. This also means that Tesla is getting closer and closer to achieving L5 autopilot.

Other markets

The European pan-European performance 300 index closed up 0.11% on Monday, the UK FTSE 100 index closed flat on Monday, Germany's DAX index closed flat on Monday, France's CAC index closed up 0.4% on Monday, and Spain's IBEX index closed up 0.2% on Monday.

Gold futures closed higher on Monday. A weaker dollar and lower US bond yields helped gold record its biggest daily gain so far this month. Some market experts say gold prices have become bullish.

Jim Wyckoff, a senior analyst at Kitco.com, said that while the stock market rally showed that Wall Street's risk appetite was improving, which usually weakens demand for safe-haven metals such as gold, gold prices could "break through" and rise higher.

"what is important is that the recent sideways volatility in gold has created a bullish pattern on the daily chart, indicating that the market has accumulated energy for the coming larger price trend (probably just this week)," he said. and prices are more likely to rise. "

Stocks are optimistic about vaccine development for the coronavirus, but more volatility is expected ahead of the November presidential election, which will boost demand for gold.

Gold futures for December delivery on the New York Mercantile Exchange rose $15.80, or 0.8%, to close at $1963.70 an ounce.

Based on the most active contracts, $1963.70 an ounce is the highest closing price of gold futures so far this month.

December silver futures rose 50 cents, or 1.9%, to close at $27.355 an ounce.

Crude oil futures closed lower on Monday. There are widespread concerns that demand is weakening as a result of the coronavirus pandemic, driving down oil prices.

However, the decline in crude oil was limited due to the disruption of oil and gas production in the Gulf of Mexico due to the approach of Hurricane Sally.

(WTI), West Texas Intermediate for October delivery on the New York Mercantile Exchange, fell 7 cents, or 0.2%, to close at $37.26 a barrel.

Giovanni Staunovo, an oil analyst at UBS, said: "Market sentiment has shifted from positive to negative, with oil prices dragged down by concerns about a stagnant recovery in crude oil demand and non-compliance by some OPEC members. The recovery in oil demand is expected to continue, but not quite evenly. "

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