The phase one trade deal between the U.S. and China won’t be impacted by the coronavirus, plus more in today’s Closing Bell on Money and Markets.
The Top Story
A senior U.S. Treasury official said the government expects China to fulfill its end of a phase one trade deal, despite the coronavirus outbreak.
The official said there was no way to accurately forecast the impact the virus will have on the global economy, but that it was possible China’s growth could drop in the first quarter before rebounding.
“At this stage, we’re not expecting changes to (the) implementation of phase one … . We still expect them to meet their commitment, but it’s over a period of time,” the unnamed official told Reuters.
Under the terms of the trade deal — signed in January — China pledged to increase its purchase of American goods by $77 billion in 2020 and $123 billion by 2021.
Money and Markets: Closing Bell*
S&P 500: 3,373 (-13 points, -0.3%)
DOW: 29,219 (-128 points, -0.4%)
NASDAQ: 9,750 (-66 points, -0.6%)
GOLD: $1,618.70 (+$7:40, +0.4%)
BITCOIN: $9,606.92 (-$440.61, -4.4%)
U.S. 10-YEAR YIELD: 1.51%
*- as of 4:35 p.m.
A Big Win
In this morning’s Wall Street Wake-Up, you learned about Adesto Technologies Corp. (Nasdaq: IOTS) and a $500 million acquisition by Dialog Semiconductor. Shares of Adesto jumped 54.5% Thursday.
Shares of Avis Budget Group Corp. (Nasdaq: CAR) moved up 16.5% after it reported strong beats of revenue and earnings projections.
It was a rough day for Boston Beer Co. Inc. (NYSE: SAM) as the beverage maker’s shares fell 7.8% thanks to weak quarterly results and lower future guidance.
M&A News
As we reported this morning, Morgan Stanley (NYSE: MS) is acquiring online brokerage E-Trade Financial Corp. (Nasdaq: ETFC) for $13 billion. It is an all-stock purchase.
Private investment firm Sycamore Partners is buying a 55% stake in Victoria’s Secret from parent company L Brands Inc. (NYSE: LB). The deal values the lingerie retailer at $1.1 billion.
Hormel Foods Corp. (NYSE: HRL) is acquiring Sadler’s Smokehouse in a structured asset sale. Terms of the deal, which is expected close in March 2020, were not disclosed.
B&G Foods Inc. (NYSE: BGS) has acquired Farmwise LLC, the maker of Veggie Fries, Veggie Tots and Veggie Rings. Terms of the transaction were not disclosed.
Golden Nuggets
The price of gold hit a seven-year high Thursday as safe-haven demand continued to increase due to the coronavirus outbreak.
Gold futures hit $1,621 an ounce — up 0.5% — in afternoon trading.
Silver futures also notched up slightly to $18.32 an ounce — a 0.08% increase over Wednesday’s close.
On the other hand, platinum fell more than 2.4% to $980 an ounce while palladium dropped just below the $2,600 threshold to $2,599 an ounce.
Cannabis Corner
A county in Florida has decided to decriminalize the possession of small amounts of marijuana throughout the county and its municipalities.
Hillsborough County commissioners voted unanimously to pass the measure.
Under the new ordinance, anyone found in possession of 20 grams or less will be issued a civil citation rather than punished with a misdemeanor charge. It is similar to ordinances passed in the cities of Tampa and Sarasota.
Recreational use of marijuana is illegal in the state of Florida.
Stock Market Update
While gold enjoyed its best day in seven years, U.S. equities markets weren’t as fortunate.
A rapid selloff in the midday session pushed markets lower. Traders said they had no immediate reason for the decline “other than possible technical factors” related to increased fears of the coronavirus spread slowing the global economy.
The Dow Jones Industrial Average fell 0.4%, partially rebounding from an early 200-point drop. The S&P 500 fell 0.3% and the Nasdaq Composite dropped 0.6%.
Today’s Big Winners:
E-Trade Financial Corp. (Nasdaq: ETFC) +21.8%
Cimarex Energy Co. (NYSE: XEC) +6.5%
Albermarle Corp. (NYSE: ALB) +5.8%
Newmont Corp. (NYSE: NEM) +4.1%
Liberty Global PLC (Nasdaq: LBTYA) +3%
Today’s Big Losers:
ViacomCBS CI B (Nasdaq: VIAC) -17.9%
Synopsys Inc. (Nasdaq: SNPS) -6%
Henry Schein Inc. (Nasdaq: HSIC) -6.5%
Intel Corp. (Nasdaq: INTC) -2.4%
Goldman Sachs Group Inc. (NYSE: GS) -1.9%
Check back for the most important news and numbers each day after the Closing Bell, only on Money and Markets.
Don’t forget about “Marijuana Markets: a POTcast,” featuring the biggest cannabis news and investment notes from Banyan Hill’s Anthony Planas, here on Money and Markets each Saturday morning.