In a year when the COVID-19 pandemic infected and killed millions of people globally, with the United States recording the highest number of coronavirus cases, stock markets wrapped up 2020 on an extremely upbeat note. The Dow Jones (DJI) and the S&P 500 (GSPC) closed at record highs on December 31, 2020, and clocked gains of 7.2% and 16.3%, respectively. The tech-heavy Nasdaq (IXIC) wrapped up the year with a stellar return of 43.6% — the biggest yearly gain since 2009.
For the New Year holiday-shortened week, the S&P 500 and the Dow Jones closed with gains between 0.5% and 0.66%, while the Nasdaq’s returns were flat.
Historic stimulus and progress around a coronavirus vaccine helped markets recover splendidly from a plunge this year, with the S&P 500 climbing more than 66% from its March 23 low. The year marked the shortest bear market in history. The markets also wrapped up the year amid upbeat sentiment around emergency approvals to vaccines and a start of inoculations. Going into 2021, investors eye the developments around a new presidency under Democrat Joe Biden, the key Senate race while keeping an equally close watch on the coronavirus’ spread and vaccinations. Cases with the new, more infectious variant of the virus have emerged in the country too.
Top Stories This Week
Third Point urges Intel to explore deal options – Reuters
Hedge fund Third Point has urged Intel Corp (INTC) to explore strategic alternatives, including whether it should keep chip design and production under one roof, Reuters reported last week. The move, according to the report, may lead to a shakeup at the company. Reacting to the developments, Intel’s shares saw their steepest rise in over eight weeks and boosted its market value to more than $200 billion. For the year, however, the stock has shed over 20%.
While Intel’s laptop sales surged during the pandemic, the company has struggled to cash in on strong demand for semiconductors that are used to power smartphones and artificial intelligence technologies. Its manufacturing capabilities have struggled with customised chips that clients seek. The hedge fund’s suggestion to split design and manufacturing operations could help the company produce better chips at a lower cost by tapping outside vendors.
Amazon to acquire podcast startup Wondery
Amazon (AMZN) said it would acquire Wondery in an effort to boost its non-musical content on Amazon Music app. The companies were reportedly in talks that valued Wondery at more than $300 million.
With the deal, the Jeff Bezos-led firm seeks to take on incumbent players such as Spotify Technology (SPOT) that have expanded aggressively and invested in big names to be the ‘Netflix (NFLX) of audio content.’ Having said that, Amazon is believed to have been a late entrant to the space and is racing to catch up with established players. Wondery has popular podcasts such as “Dirty John”, “Dr. Death”, and “Business Wars” and has about 20 million monthly unique listeners.
Drugmakers raise prices of several products
Major drugmakers in the United States have raised the prices of hundreds of drugs by an average of 3.3%, as per an analysis by Rx Savings Solutions, which sells software to help employers and health plans choose the least-expensive medicines. The yearly average increase is lower than a year ago, when over 60 firms raised prices by 5.8%. News agency Reuters had reported earlier about the plans by key players such as Pfizer Inc (PFE), Sanofi SA (SNY), and GlaxoSmithKline Plc (GSK) to hike prices of over 300 drugs in the United States from Jan 1, citing healthcare research firm 3 Axis Advisors.
The hikes come at a time when several sectors, including drugmakers reel from the COVID-19 pandemic, which slashed doctor visits and demand for some drugs. The companies were also fighting new drug price-cutting rules from the Trump administration that posed a threat to the industry’s profitability.
JPMorgan to buy cxLoyalty’s third-party loyalty program unit
JPMorgan Chase (JPM) has agreed to buy the technology platforms, travel agency, gift card, and points businesses of cxLoyalty Group. The company had teamed up with cxLoyalty for its credit card rewards program until 2018. Then the bank switched to using Expedia (EXPE). The lender will now return to cxLoyalty to propel its travel program. The deal value has not been disclosed yet by the parties.
The deal marks a big bet by JPMorgan on a rebound in pleasure travelafter the coronavirus crisis eases. It further plans to improve on offerings using the tech platform with an emphasis on giving personalised recommendations based on users’ travel history. Through the deal, the bank plans to offer unique deals to millions of credit card users and hotel and airlines.