Market Brief: July 20, 2020

A daily summary of news, analysis and data shaping the market.
Market Brief
Monday, July 20, 2020
Yet Another Nasdaq Record. Technology stocks resumed a run to all-time highs on Monday, with the Nasdaq Composite marking a fresh closing record ahead of a clutch of corporate results from some of the biggest titans of technology. Tech companies have helped the broader market to stage a miraculous rebound from the depths of the coronavirus lows put in back in March. The Nasdaq Composite Index closed up 2.5% at around 10,767, marking the tech-heavy index’s best day since April 29 and its 28th record close of the year. The S&P 500 index finished 0.8% higher at about 3252. The Dow Jones Industrial Average ended the session virtually unchanged at about 26,681. The moves come as the U.S. coronavirus case tally rose to 3.77 million on Monday and its death toll topped 140,000, as new infections continued to surge in the South and West. Markets appeared to be heartened
somewhat by upbeat news of vaccine candidates for the novel strain of coronavirus from AstraZeneca and the University of Oxford and a partnership between Pfizer and BioNTech.
DJIA 26,680.87 8.92
S&P 500 3,251.84 27.11
NASDAQ 10,767.09 263.90
US 10-Year Note 0.61 -0.02
Dollar Index 95.80 -0.14
Crude Oil 40.74 0.15
Gold 1,818.60 8.60
Global Dow 2,970.04 12.06
Powered by Dow Jones Research, FactSet, Eurostat, SIX Financial Information.
Ant Could Be the Biggest IPO Ever, but It Will Bypass the U.S.
The U.S. stock exchanges won’t get to brag about what could be the largest initial public offering in history.

Chinese fintech giant Ant Group Co., which owns mobile payment network Alipay, plans a dual listing in Hong Kong and on Shanghai’s version of the Nasdaq for its much-anticipated initial public offering.

The IPO of the company, an affiliate of e-commerce giant Alibaba, could also be a harbinger for other big Chinese debuts.

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Chevron Makes First Big Energy Deal of the Pandemic Era
Chevron has announced an all-stock deal to buy Noble Energy, an oil and gas producer with large positions in U.S. shale and a major gas field off the coast of Israel. The $13 billion deal—about $5 billion in stock and roughly $8 billion in debt—values Noble at $10.38 a share, a 7.5% premium to its closing price on Friday.

The deal would expand Chevron’s oil and gas reserves by 18% at an average price of less than $5 a barrel of oil reserves, and the companies say they can cut $300 million in annual expenses. Chevron would add to its acreage in Colorado’s DJ Basin, and boost its position in the Permian Basin. Noble’s Israeli gas project—the largest discovery the company has made—is another key asset.

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IBM’s Earnings Beat Estimates. The Coronavirus Took a Toll on Services.
International Business Machines posted better-than-expected second-quarter financial results, in the enterprise technology giant’s first full quarter of operations since the onset of the Covid-19 pandemic.

The company saw growth in its cloud and hardware businesses, but a deterioration in services, as some customers in heavily affected markets pushed to cut costs.

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EBay Reportedly Nears Sale of Classified Ads Unit to Norway’s Adevinta
EBay is zeroing in on a deal to sell its classified-advertising business for between $8 billion and $9 billion to Adevinta, a Norwegian company that operates online marketplaces in 16 countries, according to multiple media reports.

The Wall Street Journal reports that a cash-and-stock deal could be announced as soon as Monday. EBay has been shopping the classified-ads unit since February, and Adevinta’s name has come up in the past as a potential buyer. EBay’s classifieds unit, which includes the brands Gumtree and Kijiji, has operations in Canada, Europe, Africa, Australia, and Mexico.

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Pfizer and BioNTech Agree to Supply U.K. With 30 Million Doses of Covid-19 Vaccine
The drug giant Pfizer and its partner, the German biotech BioNTech, said early Monday that they had reached a deal to supply 30 million doses of their Covid-19 vaccine to the U.K. this year and next.

The financial terms weren’t disclosed, and the companies said payments would depend on the size and timing of the deliveries. Despite the lack of detail, investors took the announcement as a sign of confidence in the Covid-19 program.

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The Arms Race in Vaccines Continues as Glaxo Buys Stake in mRNA Company
GlaxoSmithKline on Monday said it was taking a 10% stake in German biotech CureVac, as the arms race for vaccines continues.

As part of a deal valued at up to £866 million ($1.09 billion), GlaxoSmithKline will pay £130 million for a nearly 10% stake in CureVac, which also counts the German government as a minority owner.

GlaxoSmithKline and CureVac reached an agreement for the research, development, manufacturing and commercialization of up to five mRNA-based vaccines and monoclonal antibodies targeting infectious disease pathogens.

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AstraZeneca’s Covid-19 Data Look Positive
Data on the Covid-19 vaccine under development by AstraZeneca and Oxford University published Monday in The Lancet appeared positive, but the stock fell on Monday after climbing last week on high expectations for the data.

Now that the official report is here, the data appear promising. Investigators reported only mild and moderate adverse events in subjects who received the vaccination, and said that the vaccine induced neutralizing antibody levels that were similar to those seen in patients who had recovered from Covid-19 infections. They also reported that the vaccine induced T-cell responses, another sort of immune response thought to be important in preventing Covid-19 infections.

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Walmart Restarts Talks to Sell a Stake in Its U.K. Grocer Asda
Walmart has revived talks about selling a stake in Asda, its U.K. grocery division, a spokesman said on Monday.

Interest has been picking up among potential investors in Asda, the U.K.’s third largest grocer, after Walmart put the sale process on hold during the coronavirus.

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Business Leaders Mourn the Death of Civil Rights Leader John Lewis
Tributes poured in over the weekend from Atlanta-area businesses and sports teams remembering civil-rights leader and Georgia congressman John Lewis, who died on Friday. Many remembered Lewis for his lifelong pursuit of justice, his relationships with constituents, employees, and executives, and the example he set in both his personal and professional life.

Lewis died at the age of 80 following a battle with cancer. As chairman of the Student Nonviolent Coordinating Committee, Lewis was one of the core organizers of and speaker at the 1963 March on Washington for Jobs and Freedom, at which Dr. Martin Luther King, Jr., delivered his famous “I Have a Dream” speech. He was first elected to the U.S. House of Representatives in 1987, and most recently served as chairman of the House Ways and Means Oversight Subcommittee.

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