Here are five things you must know for Monday, Dec. 14:
1. — Stock Futures Kick Off Week Higher
Stock futures were rising Monday as the first coronavirus vaccines were shipped to distribution sites across the U.S. and a bipartisan group of lawmakers prepared to introduce a $908 billion pandemic relief package.
Contracts linked to the Dow Jones Industrial Average jumped 211 points, S&P 500 futures were up 21 points and Nasdaq futures gained 49 points.
The first deliveries of the vaccine from Pfizer (PFE) – Get Report and partner BioNTech (BNTX) – Get Report were getting shipped from Pfizer’s plant in Kalamazoo, Mich., and were due to arrive Monday mostly at hospitals across all 50 states.
The emergency use authorization for the vaccine from U.S. health agencies came on the same weekend as the country surpassed 16 million confirmed coronavirus infections and nearly 300,000 deaths from the virus.
Sen. Joe Manchin, a Democrat from West Virginia, told “Fox News Sunday” that his bipartisan group would “have a bill produced for the American people (Monday), $908 billion.” He said he was confident Congress would pass a relief bill before the holiday break.
Details were hammered out on small business help, vaccine-distribution funding and other key areas, Bloomberg reported, citing both Democratic and Republican lawmakers. The sticking point remains Senate Majority Leader Mitch McConnell’s demand on a shield for employers from virus-related lawsuits.
Stocks in the U.S. fell last week – the S&P 500 declined 1% after two weeks of solid gains – largely because of fading prospects for another aid package from Washington.
2. — Electronic Arts Tops Take-Two With $1.2 Billion Purchase of Codemasters
Electronic Arts (EA) – Get Report reached an agreement to acquire U.K.-based Codemasters Group, a maker of racing video games, for $1.2 billion, topping an offer of $956 million from Take-Two Interactive (TTWO) – Get Report.
Codemasters shareholders will receive 604 pence ($7.98) in cash for each ordinary share of Codemasters, higher than Take-Two’s offer in November that valued Codemasters at about 528 pence a share.
Electronic Arts’ acquisition of Codemasters is expected to be completed in the first quarter of 2021.
“Electronic Arts and Codemasters have a shared ambition to lead the video game racing category. The board of Codemasters firmly believes the company would benefit from EA’s knowledge, resources and extensive global scale – both overall and specifically within the racing sector,”said Codemasters Chairman Gerhard Florin in a statement.
Shares of Electronic Arts rose 1.57% to $137.93 in premarket trading. Take-Two shares rose slightly to $190.52 on Monday.
3. — AstraZeneca Falls After $39 Billion Acquisition of Alexion
AstraZeneca (AZN) – Get Report shares fell Monday after it reached a deal to buy rare disease expert Alexion Pharmaceuticals (ALXN) – Get Report for $39 billion as the British drugmaker struggles to keep pace with rivals in finalizing its coronavirus vaccine.
AstraZeneca will pay $60 a share in cash for Boston-based Alexion, as well as 2.1243 of its U.S.-listed shares per each outstanding Alexion share. The combination values Alexion at $175 a share, a 44.6% premium to its closing price on Friday of $120.98.
The acquisition of Alexion marks AstraZeneca’s biggest deal ever.
The deal is expected to close in the third quarter of next year, the companies said, with AstraZeneca owning around 85% of the combined company.
“Alexion has established itself as a leader in complement biology, bringing life-changing benefits to patients with rare diseases. This acquisition allows us to enhance our presence in immunology,” said AstraZeneca CEO Pascal Soriot.
American depositary receipts of AstraZeneca fell 3.96% to $52.12 a share. Alexion shares jumped 4.73% to $163.
4. — This Week’s Calendar: Fed Meeting, Nike Earnings
The economic calendar Monday is light but data are expected later this week on retail sales, industrial production, housing starts and regional manufacturing.
The Federal Reserve will be holding its final meeting of 2020 on Tuesday and Wednesday. An announcement on interest rates is expected Wednesday afternoon. While the central bank is expected to hold rates steady, indications on what moves the Fed may make in the new year, including guidance on continued asset purchases, will be watched closely by Wall Street.
Earnings reports are expected this week from Nike (NKE) – Get Report, FedEx (FDX) – Get Report, Lennar (LEN) – Get Report, General Mills (GIS) – Get Report, Rite Aid (RAD) – Get Report and Darden Restaurants (DRI) – Get Report.
5. — Tesla to Shut Down Model S and Model X Production
Tesla (TSLA) – Get Report told employees at the electric vehicle company’s factory in Fremont, Calif., that Model S and Model X production lines will close from Dec. 24 to Jan. 11, CNBC reported, citing an email it had seen.
Employees working on those lines were offered a full week of pay to cover one of the two-and-a-half weeks of the shutdown, along with a few paid holidays. They were asked to take five unplanned and unpaid days off, but have the option to try to find work in other areas of the factory during those days, according to CNBC.
In a separate email sent to the entire company on Friday, CEO Elon Musk noted that Tesla was “fortunate to have the high-class problem of demand being quite a bit higher than production this quarter” and asked for employees to boost production as much as possible during the rest of the quarter.
The shutdown of the S and X lines, CNBC noted, suggests that the high demand doesn’t extend to these older models.