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Fly Intel - End of Day Brief - Monday Dec 16, 2019

Stocks end higher following last week's trade deals

The major indexes have rallied to new all-time highs as last week's "phase one" trade deal with China, USMCA trade deal in North America and the convincing conservative victory in the U.K. continue to fuel an advance in stocks. The Dow, while higher to end the day, was the relative laggard as a report on potential cuts, or a halt, to production of the still-grounded 737 MAX dragged on shares of Boeing (BA).

ECONOMIC EVENTS: In the U.S., the Empire State manufacturing index rose 0.6 points to 3.5 in December, which was a little below forecast. Markit's flash manufacturing PMI dipped to 52.5 in December from 52.6 in November. The NAHB home builder index surged 5 points to 76 in December, which was a hefty beat after an unchanged 71 reading for November.

TOP NEWS: Shares Boeing were 4% lower after The Wall Street Journal reported that the planemaker is weighing either halting or further cutting production of the 737 MAX as uncertainty grows over the aircraft's return to service. The company's management views pausing production as the most viable among difficult options as the board meets in Chicago starting Sunday, according to the Journal, which noted that support for halting production comes after U.S. regulators warned Boeing it had been setting unrealistic expectations for the plane to win their approval.

In M&A news, DuPont (DD) announced that International Flavors (IFF) will merge with its Nutrition & Biosciences business. The agreement values the combined entity at $45.4B on an enterprise value basis, reflecting a value of $26.2B for the N&B business based on International Flavors' share price as of December 13. Under the terms of the deal, DuPont shareholders will own 55.4% of the shares of the new company and existing IFF shareholders will own 44.6%.

In other deal news, WPX Energy (WPX) shares jumped 9% after announcing the acquisition of Delaware Basin operator Felix Energy for $2.5B. The purchase price consists of $900M cash, subject to closing adjustments, and $1.6B in WPX stock issued to the seller, WPX said.

Meanwhile, shares of Uber Technologies (UBER) were up 5.5% after TechCrunch reported that the company is in advanced talks to sell UberEats' India business to local rival Zomato. According to TechCrunch, the deal currently in discussions would value the business at around $400M.

Additionally, The Wall Street Journal reported that Amazon (AMZN) is blocking its third-party sellers from using FedEx's (FDX) ground delivery network for its Prime shipping, citing a slip in performance heading into the final stretch of the holiday season. Shares of FedEx (FDX) closed about 1% lower after the news.

MAJOR MOVERS: Among the noteworthy gainers was Axsome (AXSM), which surged 70% after the company's AXS-05 achieved its primary endpoint in a Phase 3 trial. Also higher was Relmada Therapeutics (RLMD), which gained 17% after Guggenheim analyst Yatin Suneja initiated coverage of the stock with a Buy rating and $64 price target.

Among the notable losers was Wave Life Sciences (WVE), which dropped 55% after it discontinued suvodirsen development for patients with Duchenne muscular dystrophy. Also lower was Gossamer Bio (GOSS), which slipped 37% after Novartis (NVS) announced it was discontinuing the development of its investigational asthma drug fevipiprant after disappointing results in late-stage clinical studies. Gossamer Bio has an asthma drug candidate, GB001, which belongs to the same class known as DP2 antagonists.

INDEXES: The Dow rose 100.51, or 0.36%, to 28,235.89 , the Nasdaq gained 79.35, or 0.91%, to 8,814.23 , and the S&P 500 advanced 22.65, or 0.71%, to 3,191.45 .

Symbols: $BA $DD $IFF $WPX $UBER $AMZN $FDX $AXSM $RLMD $WVE $GOSS $NVS

Source: (thefly.com)


Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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