Stock futures point to a higher opening on Monday after three consecutive weeks of a rally. Futures of all three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — rose modestly today. Last week, the market’s benchmark — the S&P 500 Index — closed just 0.6% below its all-time high of 3,393.52 recorded on Feb 19.
On the mergers and acquisitions front, French healthcare company Sanofi SNY entered into a definitive agreement to acquire U.S. biotech company Principia Biopharma Inc. PRNB in an all-cash deal valued around $3.68 billion. Sanofi said that this acquisition will be accretive to its “ongoing R&D transformation to accelerate the development of the most promising medicines.” In pre-market, shares of Principia Biopharma have jumped more than 8%.
Moreover, the latest filling by Warren Buffet’s Berkshire Hathaway Inc. BRK.B revealed that the company acquired a stake in Canada-based gold miner Barrick Gold Corp. GOLD. In pre-market trading, shares of Barrick Gold have surged nearly 3%.
However, adding to investors’ jitters, the ongoing geopolitical tensions between the United States and China heightened last weekend. The review meeting on the Phase 1 trade deal through a video conference between high-level delegates from both sides was postponed. Notably, earlier in the month, President Trump banned Chinese social app TikTok and said that he could exert pressure on more Chinese entities.
Meanwhile, we are in the last round of the coronavirus-stricken second-quarter 2020 earnings season, with retail giants such as Walmart Inc. WMT, The Home Depot Inc. HD, Target Corp. TGT and Lowe’s Companies Inc. LOW lined up to report this week.
Retail sales are major components of consumer spending, which is the primary driver of the U.S. economy. Last quarter was a mixed one for retailers. In April, retail sales plunged by 14.7% as the global outbreak of coronavirus forced the U.S. government to impose lockdowns. However, retail sales rebounded 18.2% in May and 8.4% in June buoyed by the systematic reopening of economies in all 50 states.
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