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REFINITIV
 
 
 
USA EDITION
 
MONDAY, DECEMBER 21, 2020

(Morning News Call – U.S. will not be published through the year-end holiday season, from December 25, 2020 to January 1, 2021. Normal service will resume from January 4, 2021. Season’s Greetings and Happy New Year.)


TOP NEWS
'Sick man of Europe': UK cut off over fears about new COVID strain
The United Kingdom stood shut off from the rest of Europe after allies cut transport ties over fears of a new coronavirus strain, sowing chaos for families, truckers and supermarkets just days before the Brexit cliff edge.
 
After months of delay, Congress to vote on massive coronavirus aid package
After months of inaction, the U.S. Congress was poised to vote on a $900 billion stimulus package that would provide new assistance for individuals and businesses battered by the surging coronavirus pandemic.
 
Tesla debuts into S&P after frantic Friday trading
Tesla will make its much anticipated debut into the benchmark S&P 500 index, after rising to a record high on Friday in a frantic day of trading.
 
Thoma Bravo to buy property tech firm RealPage in $10.2 billion deal
RealPage said it would be bought by private-equity firm Thoma Bravo in an all-cash transaction that valued the property management software provider at about $10.2 billion, including debt.
 
Shell to write down assets again, taking cuts to more than $22 billion
Royal Dutch Shell said it will write down the value of oil and gas assets by $3.5 billion to $4.5 billion following a string of impairments this year as it adjusts to a weaker outlook.


BEFORE THE BELL
U.S. stock futures fell, with world stocks tumbling, as a fast-spreading new coronavirus strain in Britain threatened to torpedo markets' optimism over a vaccine-fuelled rebound in economic growth. The dollar index rose while gold prices reversed earlier gains as investors looked for safer assets. Oil prices tumbled on worries about a slower recovery in fuel demand.


STOCKS TO WATCH
Deals Of The Day

Lockheed Martin Corp (LMT) & Aerojet Rocketdyne Holdings Inc (AJRD). The company said on Sunday it has agreed to buy U.S. rocket engine manufacturer Aerojet for $4.4 billion, including debt and net cash. The deal is Lockheed's biggest acquisition since Jim Taiclet took over as chief executive in June. Lockheed said it will pay $56 per share for Aerojet Rocketdyne, a 33 percent premium to Friday's closing price. The purchase price will be reduced to $51 per share after the payment of a pre-closing special dividend, Lockheed added. Lockheed said the transaction is expected to close in the second half of 2021.

• RealPage Inc (RP). The company said it would be bought by private-equity firm Thoma Bravo in an all-cash transaction that valued the property management software provider at about $10.2 billion, including debt. Thoma Bravo is paying $88.75 per share for RealPage, representing a premium of 30.8% over RealPage's closing stock price on Friday, U.S.-based RealPage said in a statement. Upon completion of the deal, RealPage expects to continue operating under the leadership of chairman and Chief Executive Officer Steve Winn. The transaction is expected to be competed in the second quarter of 2021, after which RealPage will become privately held, the company said.

Rent-A-Center Inc (RCII). The company said on Sunday it would buy Acima Holdings for $1.65 billion in a cash-and-stock deal as it looks to build out its fintech platform across traditional and online lease-to-own businesses. The deal includes $1.27 billion in cash and about 10.8 million Rent-A-Center common shares currently valued at $377 million, the company said in a statement. Acima is expected to generate about $1.25 billion in 2020 revenue and $225 million in adjusted earnings before interest, taxes, depreciation and amortization, Rent-A-Center said. Rent-A-Center said it had received $1.83 billion in debt financing from J.P. Morgan Securities LLC, Credit Suisse and HSBC Securities Inc to fund the deal.​

In Other News
Alphabet Inc (GOOGL) & Facebook Inc (FB). Australian Competition and Consumer Commission Chairman (ACCC) Rod Sims said proposed laws that will make Australia the first country in the world to force Google and Facebook to pay for news were fair and critical for the survival of the media industry. Sims said he was surprised to hear criticisms from Google about the draft legislation unveiled by the Australian government earlier this month. "We thought they were comfortable with that ... so we were very surprised that they're still complaining about that," Sims said. Separately, Facebook has taken down content that spread lies in Israel against coronavirus vaccinations as the government seeks to drum up support for the programme, the Justice Ministry said on Sunday.

Amazon.com Inc (AMZN). An Indian court on Monday dismissed a plea from India's Future Group that sought to restrain U.S. partner Amazon.com from interfering in its $3.4 billion asset sale to Reliance Industries. Justice Mukta Gupta noted in the verdict that Amazon cannot be barred from writing to regulators on account of potentially irreparable damage. Amazon did not immediately respond to email seeking comment while Future Group said in an exchange filing that they are in process of reviewing the verdict and would submit a brief summary after consultation with legal advisors. Separately, the company said on Sunday it had closed one of its warehouses in New Jersey out of caution till Dec. 26, after seeing an increase in asymptomatic positive cases amongst workers.

Apple Inc (AAPL). The company has temporarily shut all of its 53 stores in California because of a coronavirus outbreak and 16 stores in the United Kingdom following restrictions introduced by the government in London, a spokesman said on Saturday. The company said on Friday it was temporarily shutting some stores in California following a surge in COVID-19 cases, sending the iPhone maker's shares down in trading after the bell. That announcement covered at least 12 stores. Customers would still be able to pick up existing orders for the next few days, the spokesman said. The statement did not mention when Apple expects the stores to reopen. Separately, Apple has placed supplier Wistron Corp on probation, saying on Saturday it would not award the Taiwanese contract manufacturer new business until it addressed the way workers were treated at its southern India plant.

Blackstone Group Inc (BX). The Private equity firm is in talks to merge U.S. benefits services provider Alight Solutions with a blank-check acquisition firm backed by veteran investor Bill Foley, according to people familiar with the matter. The merger with Foley Trasimene Acquisition would result in Alight becoming a publicly-listed company at a valuation of more than $8 billion, including debt, the sources said. The deal talks come more than a year after Blackstone canceled an initial public offering of Alight as it was about to raise up to $800 million, amid concerns that it would not fetch the terms it was seeking. A deal with Foley's blank-check acquisition firm would underscore the growing popularity of these vehicles as an alternative route to the stock market.


• Charles Schwab (SCHW). Britain's financial watchdog has fined U.S.-listed Charles Schwab's UK business $11.88 million for failing to protect client assets, likening it to missteps taken by Lehman Brothers before the 2008 financial crisis. The Financial Conduct Authority (FCA) said the penalty was for Charles Schwab UK Ltd (CSUK) carrying out a regulated activity without permission and making a false statement to the watchdog. It added that the breaches, which occurred between August 2017 and April 2019, affected retail customers. The regulator said CSUK neither had the right records and accounts to identify its customers' client assets, nor did it have adequate organisational arrangements to safeguard them.

Fiat Chrysler Automobiles NV (FCAU). The company and French rival PSA gained EU antitrust approval for their $38 billion merger to create the world's No.4 carmaker after pledging to boost Japanese rival Toyota Motor. The two carmakers are looking to the deal to help them tackle the industry's dual challenges of funding cleaner vehicles and the global pandemic. The European Commission said PSA will extend its small van agreement with Toyota Motor by increasing capacity for Toyota and cutting transfer prices for the vehicles, spare parts and accessories to address EU competition concerns, confirming a Reuters story in October.

Moderna Inc (MRNA). U.S. distribution of the company’s COVID-19 vaccine began on Saturday, with more than 3,700 sites due to start receiving and administering shots as soon as Monday, vastly widening the rollout started last week by Pfizer. Workers on Saturday were packing vaccines into containers and loading them on trucks, U.S. Army General Gustave Perna said during a news conference. Trucks will set out on Sunday and shipments will start reaching healthcare providers as soon as Monday, he said. Doses of vaccine must travel with security guards, including U.S. Marshals, and will be stored in locked refrigerators. U.S. plans call for at-risk groups such as elderly people in nursing homes and medical workers to receive injections first. 

Pfizer Inc (PFE). The European Union has agreed to pay 15.50 euros per dose for the COVID-19 vaccine developed by the company and BioNTech, an internal EU document reviewed by Reuters shows. The price, which is confidential and was negotiated for a total of 300 million doses, is slightly lower than the $19.50 per shot the United States agreed to pay for a first shipment of 100 million doses of the same vaccine, in line with what Reuters reported in November. The EU document dated Nov. 18 was circulated internally after the EU announced its supply deal with Pfizer and its German partner BioNTech on Nov. 11.

Royal Dutch Shell (RDSa). The company said it will write down the value of oil and gas assets by $3.5 billion to $4.5 billion following a string of impairments this year as it adjusts to a weaker outlook. In an update ahead of its fourth quarter results on February 4, Shell said the post-tax charge was due in part to impairments on its Appomattox field in the U.S. Gulf of Mexico, the closure of refineries and liquefied natural gas (LNG) contracts. It said some charges involved in its restructuring would be recognised in 2021. The company also said it expects oil and gas production in its upstream division to be around 2.275 to 2.350 million barrels of oil equivalent per day, slightly higher than in the third quarter.


Tesla Inc (TSLA). The company will make its much anticipated debut into the benchmark S&P 500 index, after rising to a record high on Friday in a frantic day of trading. The company will become the most valuable ever admitted to Wall Street's main benchmark and will account for 1.69% of the index, according to S&P Dow Jones Indices' analyst Howard Silverblatt. Tesla's addition to the S&P 500 meant index-tracking funds bought $90.3 billion of shares by the end of Friday's session so that their portfolios reflected the index, according to Silverblatt.​


INSIGHT
Big Tech's stealth push to influence the Biden administration
Silicon Valley is working behind the scenes to secure senior roles for tech allies in lesser-known but still vital parts of president-elect Joe Biden's administration, even as the pushback against Big Tech from progressive groups and regulators grows.



ANALYSTS' RECOMMENDATION
Darden Restaurants Inc (DRI). Credit Suisse raises price target to $136 from $112, following second-quarter results that reiterated the company's committment to its long-term strategy, which focuses on generating high quality sales across all channels.

Nike Inc (NKE). Barclays raises price target $174 from $150, citing strong second-quarter results that beat estimates across the board while demonstrating consistency in execution and the competitive advatages of its global scale and customer loyalty.

Solarwinds Corp (SWI). Jefferies cuts price target to $18 from $25, citing reputational damage to the company following a recent breach in security that impacted its 'Orion' network monitoring product.

Walmart Inc (WMT). RBC raises price target to $170 from $153, stating that the company's size, rapidly growing e-commerce platform and consumer value proposition makes it one of the best positioned stocks to handle the myriad of possible outcomes in 2021​.



ECONOMIC EVENTS (All timings in U.S. Eastern Time)
0830 (approx.) National Activity Index for Nov: Prior 0.83​


COMPANIES REPORTING RESULTS
No major S&P 500 companies are scheduled to report for the day.


CORPORATE EVENTS (All timings in U.S. Eastern Time)
0900 Leslie's Inc (LESL). Q4 earnings conference call
1100 Enerpac Tool Group Corp (EPAC). Q1 earnings conference call
1100 Factset Research Systems Inc (FDS). Q1 earnings conference call
1700 Calavo Growers Inc (CVGW). Q4 earnings conference call​



EXDIVIDENDS
Albany International Corp (AIN). Amount $0.20
CMC Materials Inc (CCMP). Amount $0.44
Eversource Energy (ES). Amount $0.56
Medifast Inc (MED). Amount $1.13
ProAssurance Corp (PRA). Amount $0.05
Toro Co (TTC). Amount $0.26
Weingarten Realty Investors (WRI). Amount $0.36​



(All analysts' estimates are according to I/B/E/S Refinitiv data)


PICTURE OF THE DAY

 
U.S. Speaker of the House Nancy Pelosi (D-CA) receives the Pfizer-BioNTech COVID-19 vaccine by Dr. Brian Monahan, attending physician of the United States Congress, at the Capitol in Washington, December 18. Anna Moneymaker/Pool via REUTERS
 
 
 
 
 
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