Monday’s Pre-Market: Here’s What You Need To Know Before The Market Opens

To start out the week, U.S. stock futures rallied on optimism related to a potential COVID-19 vaccine. After the S&P 500 ended last week at a record high, futures tied to the index increased 0.9% in Monday’s pre-market trading session. Dow Jones Industrial Average futures jumped 1%, pointing to an opening gain of over 300 points, while Nasdaq 100 futures rose 0.6%.  

Shares of Johnson & Johnson surged 1.2% in Monday’s pre-market trading session following its announcement that it has initiated a Phase 3 clinical trial evaluating a two-dose regimen of its vaccine candidate for the prevention of COVID-19 in the UK. The healthcare company revealed that Ensemble 2 is a complementary, pivotal, large-scale, multi-country Phase 3 trial that will assess the safety and efficacy of a two-dose regimen of the vaccine, with it running in parallel to the Phase 3 study of the single-dose regimen.  

Meanwhile, Google was fined 196.7 million Turkish Lira, or $25.5 million, by the Turkish Competition Authority for allegedly abusing its market dominance, the Associated Press reported. The regulatory body stated that GOOGL made it harder for companies to appear in searches if they didn’t generate ad revenue for Google, with the regulator noting the company will have six months to enable “active competition in the market.” Credit Suisse analyst Stephen Ju recently increased the price target on Alphabet to $1,950 from $1,850 and reiterated a Buy rating, arguing that ongoing monetization improvements will pay off.  

In other market news, Uber is discussing selling its self-driving unit, Uber Advanced Technologies Group (UATG), with Aurora Innovation, a self-driving technology startup, according to TechCrunch. Uber and Aurora have been in talks since October, and based on TechCrunch’s report, Uber’s UATG unit is valued at $7.25 billion, with it funded by investors including SoftBank’s Vision Fund, Toyota and DENSO. If the deal is finalized, it would allow Uber to offload the expensive and controversial segment. 

Walmart, on the other hand, has agreed to sell the majority of its stake in Japanese supermarket Seiyu GK to e-commerce company Rakuten, Inc. and investment firm KKR & Co. Inc. The deal is set to close in the first quarter of 2021. As per the terms of the agreement, Rakuten will acquire a 20% stake in Seiyu while KKR will buy 65% in a deal that values the business at 172.5 billion yen ($1.6 billion). “Today’s announcement is important because its focus is on bringing together the right partners in the right structure to build the strongest possible local business. We look forward to supporting Seiyu’s growth and success, alongside KKR and Rakuten, as a minority investor,” Walmart CEO Judith McKenna commented. 

Shares of PNC Financial jumped 1.8% in pre-market trading on Monday after it announced that it has inked a deal to buy Banco Bilbao Vizcaya Argentaria’s U.S. banking assets. This deal is worth $11.6 billion, and includes BBVA USA Bancshares, Inc., and its U.S. banking subsidiary, BBVA USA. Last month, Oppenheimer analyst Chris Kotowski reiterated a Hold rating on PNC, noting that the valuation keeps him on the sidelines. “Management is still talking in guarded terms about how it will be no fun to be a bank in the 2020-21 and that this should shake loose some M&A opportunities. PNC also seemed optimistic about being able to restart share buybacks in the new year. Either of these could be significant catalysts, but we suspect both will take some time to accomplish,” Kotowski explained. 

Turning to 3M, the industrial giant provided an update on its October sales, revealing that there was a decline compared to the third quarter growth rate. For the month of October, sales gained 3% to reach $2.9 billion, versus the 4.5% growth in Q3. The Q3 result was driven by a 25.5% rise in the healthcare segment’s sales. J.P. Morgan analyst Stephen Tusa recently increased the price target on 3M to $170 from $159 and maintained a Hold rating, as the analyst has a “balanced view” of the multi-industry sector. He adds that based on the pandemic downdraft, there is a “floor under” 2020 earnings estimates. 

As for Ford, it is planning to make battery cells for its electric vehicles (EVs), Reuters reported. During the Reuters Automotive Summit teleconference, CEO Jim Farley said “We are discussing (battery) cell manufacturing.” He further added that “I think that’s natural as (EV) volume grows.” Up until now, the company didn’t think it would be beneficial to manufacture its own battery cells.  

Ahead of the holiday season, payments processing platform PayPal has partnered with American Express to launch the Amex Send & Split feature. This feature will enable American Express consumer card members in the U.S. to send money to any PayPal or Venmo customer directly through the American Express App. It will also allow Amex card members to split purchases with their friends and family on PayPal and Venmo, and get paid back directly to the Amex Card as a statement credit.