The week is starting on a bad note, with US stock futures in deep red in Monday’s pre-market trading due to the threat of a new COVID-19 virus strain in the UK. Futures tied to the S&P 500, Dow Jones Industrial Average and the Nasdaq 100 were down 2.1%, 1.85% and 1.32%, respectively.
Fears associated with the new COVID-19 mutation overshadowed the positive developments related to the coronavirus stimulus package. Congress reached an agreement on the $900 billion COVID-19 stimulus package over the weekend. A final vote on the stimulus deal is expected today.
Amid rising COVID-19 cases, tech giant Apple is temporarily closing its 53 retail stores in California, an Apple spokesperson confirmed to CNBC in an e-mail. The spokesperson told CNBC that customers will be able to purchase Apple products online and get product help and information about stores through the website. Bloomberg had reported last week that the company was temporarily shutting down its stores in Los Angeles due to the spike in coronavirus cases.
In M&A news, shares of real estate software and data analytics provider RealPage exploded 28.6% pre-market as the company is getting acquired by private equity investment firm Thoma Bravo. As per RealPage, the all-cash acquisition values the company at about $10.2 billion, including net debt. Scott Crabill, a Managing Partner at Thoma Bravo, stated, “As technology transformation takes on increasing importance in the real estate industry, RealPage’s diverse and innovative portfolio of products and solutions puts the company in prime position to accelerate its market leadership.” The news of the acquisition was first reported by the Wall Street Journal.
Lockheed Martin has inked an agreement to acquire US rocket engine manufacturer Aerojet Rocketdyne Holdings for $4.4 billion. Lockheed Martin’s CEO stated, “This transaction enhances Lockheed Martin’s support of critical U.S. and allied security missions and retains national leadership in space and hypersonic technology.” The acquisition is expected to close in the second half of 2021, subject to regulatory approvals.
On the healthcare front, Eli Lilly plans to commence a new pragmatic study of neutralizing antibody bamlanivimab (LY-CoV555) in high-risk patients with COVID-19. The study will be conducted in collaboration with major local institutions in New Mexico. Bamlanivimab was recently granted the FDA’s Emergency Use Authorization (EUA) for the treatment of mild to moderate COVID-19 patients who are at high risk for progressing to severe COVID-19 and/or hospitalization.
Meanwhile, several major banks and financial institutions announced that they have been authorized by the Federal Reserve to resume share buybacks following the second stress test results by the central bank. Wells Fargo announced that the Fed has authorized it to pay dividends and resume share repurchases in the first quarter of 2021. The repurchases, in the aggregate, should not exceed an amount equal to the average of the firm’s net income for the four preceding calendar quarters.
BNY Mellon also announced its intention to resume share buybacks in 1Q 2021. The investment firm stated that it expects to maintain its common stock dividend (subject to the approval of the board of directors) and resume its share repurchases in an amount that is consistent with the modified distribution limitations.
Also, State Street has been authorized by the Federal Reserve to resume share repurchases in the first quarter of 2021. It has been authorized to make share repurchases in an aggregate amount of up to the average of its quarterly net income during 2020.
