Equity markets in the United States ended the Christmas week with minor gains, with the Nasdaq rising the most with its modest 0.4% weekly gain. Trading volumes were thin in the holiday-shortened week even as the focus remained on the United States’ response to the coronavirus crisis and a stimulus bill to counter the pandemic’s economic damage.
During the week, Republicans and Democrats agreed to a $2.3 trillion pandemic aid. U.S. President Donald Trump finally signed the bill on Sunday, after refusing to sign it earlier citing that it gave too much money to special interests, cultural projects, and foreign aid and that the one-time stimulus of $600 cheques to Americans was small. He demanded the amount be raised to $2,000. The signing of the bill by Trump restored unemployment benefits to several millions of Americans and averted a chaotic federal government shutdown.
Meanwhile, worries around the coronavirus resurfaced as new strains, more infectious than the current one, were found in the United Kingdom and South Africa, pushing countries to suspend flights from the nations. These developments brought jitters and volatility to Wall Street.
For the week, the Dow Jones (DJI) edged up 0.1%, the S&P 500 gained 0.2% and the Nasdaq rose 0.4%.
Top Stories This Week
U.S. To Pay Pfizer $2 Billion For 100 Million Additional COVID-19 Vaccine Doses
The U.S. government is set to pay Pfizer (PFE) about $2 billion for 100 million additional doses of its vaccine to boost its supply amid a huge spike in nationwide infections of the coronavirus. As per the agreement, Pfizer will deliver about 70 million doses by June 30 and the rest by July 31.
Snap Summary
The deal comes at a time when concerns about the vaccine’s supply and availability have emerged in the United States, especially when infections and deaths continue to rise, and the sick find it more difficult to find a hospital bed. For Pfizer, the total value of this deal and the previous ones signed with the government pegs the value at $4 billion for 200 million doses. The purchase price of the latest deal comes to $19.50 per shot, higher than $18.90 per dose agreed to be paid by the European Union.
Apple Eyes Car Production By 2024
Apple Inc (AAPL) aims to build a vehicle for consumers as part of its Project Titan and aims to offer a self-driving car technology with its own breakthrough battery technology, Reuters reported. The company plans to have a new battery design that could slash battery costs and increase the vehicle’s range, the news agency reported, quoting sources. Shares of the company gained about 3% during the week, while for the month, it closed with gains of nearly 8%.
Snap Summary
Apple’s plans mark an attempt to take on incumbent players such as Tesla (TSLA) and Nio (NIO) in battery-operated vehicles segment space while contrasting rivals such as Alphabet Inc’s (GOOG) Waymo that has built robo-taxis to carry passengers for a driverless ride-hailing service. While it is still a few years away from its fruition, the news sent shares of Tesla down 6.56% from a record high on December 21 — the day it got included in the S&P 500 index.
U.S. accuses Walmart of Fuelling the Opioid Crisis
The U.S. Justice Department sued Walmart (WMT) last week and accused it of fueling the opioid crisis in the United States. It said the company allowed its network of pharmacies to fill millions of prescriptions for opioids, several thousands of which were suspicious and invalid. Shares of the world’s largest retailer shed about 2% for the week, losing about 1.2% on the day it was sued by the Justice Department.
Snap Summary
The 160-page civil complaint alleged that Walmart knew its system to detect suspicious prescriptions for opioids were inadequate. The accusation and the lawsuit is one of the most significant actions taken by the Justice Department in response to the crisis. It also marks an escalation in the efforts by the U.S. government to hold major pharmacy chains responsible for their role during the crisis.
IBM To Buy European Cloud Firm Nordcloud
International Business Machines (IBM) will buy Nordcloud, a European startup, but did not disclose the deal value for the Finland-based firm. The acquisition is the latest in a slew of buyouts by the company to cash in on the cloud computing opportunity and sets the stage for a big spin-off.
Snap Summary
IBM, the world’s first big computing firm, is looking to grow in the hybrid cloud space, and as per this report, it is a $1 trillion market opportunity. IBM, like other companies, is eyeing using a combination of its data centers and leased computing resources to manage and process data. So far, IBM has acquired at least five startups in the hybrid cloud space. With the world moving to a cloud, SaaS and IaaS mechanism in the times to come, IBM’s deal marks a significant focus and growth opportunity in the area.
Lockheed Martin To Buy Aerojet Rocketdyne For $4.4 Billion
Lockheed Martin Corp (LMT) will buy U.S. rocket engine maker Aerojet Rocketdyne Holdings Inc (AJRD) for $4.4 billion, in a deal that includes debt and net cash. The company will pay $56 apiece, a 33% premium to its previous close on December 18. The deal marks the biggest acquisition since Jim Taiclet took over as the CEO in June this year.
Snap Summary
Lockheed’s deal to buy Aerojet signals its aim to boost its propulsion capabilities amid competitions from companies such as SpaceX and Blue Origin. The companies are in the race for space contracts from the U.S. government and Lockheed seeks to get a headstart in it. The buyout amplifies its focus as the company had already been using Aerojet’s propulsion systems in its aeronautics, missiles, and fire control offerings.
