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Premarket: The stock market after-party is in Europe

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London (CNN Business)US stock indices remain in record territory. But in recent weeks, they’ve been stuck in a holding pattern as investors hunt for the next big catalyst that could send shares higher.

In Europe, there’s no such hesitance.What’s happening: The STOXX 600 index hit an all-time high on Monday and is pushing higher again on Tuesday. Strategists think that after a decade of skepticism, European shares could continue to be solid bets in the months to come.

    “This is not 4 a.m. [at] the European party,” Jeffrey Sacks, head of investment strategy in Europe, the Middle East and Africa at Citi Private Bank, told me. “This is 9 p.m., so there’s a lot further to go.”

      For the past 10 years, investors have been wary about pumping money into Europe, which has been beset by low economic growth, a weak euro, political risk and a struggling banking sector, Sacks said.Read MoreNow, he sees a different dynamic starting to play out, as EU member states start to spend money allocated through the bloc’s recovery fund and vaccination programs gather steam.JPMorgan predicts that €390 billion ($475 billion) in grants and €360 billion ($438 billion) in loans will start to be rolled out this year and money could continue to feed through until 2026.There are also structural reasons Europe appears poised for a breakout. The region has a high proportion of stocks like auto companies and banks that perform well when the economy is on the upswing. Many pay healthy dividends. The market relies less than the United States on shares of high-growth tech companies like Amazon and Apple (AAPL), which look less appealing when investors are concerned about interest rate hikes.”We upgraded our tactical view on European equities to neutral in February, and are seeing more reasons to be optimistic about this asset class for the next six to 12 months,” BlackRock strategists told clients on Monday.There are risks. Like the Federal Reserve, the European Central Bank — which meets Thursday — is vulnerable to a policy mistake that could hamper the economic rebound. Fears about Covid variants are also stymying the summer tourism season for the second year in a row.But Sacks thinks that after many years of “disappointment,” this could be Europe’s time to shine, resulting in a US-style wave of mergers and acquisitions and even a retail trading frenzy.Not just the European Union: The United Kingdom could also experience growth after investors stayed on the sidelines for years due to Brexit, while Asian shares stand to benefit as the trade environment improves.Wall Street has long dominated markets. Over the past decade, the S&P 500 has rallied 236%, while Europe’s STOXX 600 rose roughly 86%, the FTSE 100 in London climbed about 27% and Hong Kong’s Hang Seng gained 56%. That means there’s lots of ground to make up.

      Biogen’s Alzheimer’s drug is a Wall Street winner

      Wall Street thinks Biogen’s new Alzheimer’s drug is poised to be a huge success.On Monday, the US Food and Drug Administration approved the use of the experimental drug aducanumab for early-stage Alzheimer’s patients. It’s the first treatment for the disease to receive a green light from the regulator in nearly 20 years.Shares of Biogen (BIIB), which developed the drug also known as Aduhelm with Japanese partner Eisai, surged 38% Monday.The drug was developed for patients with mild cognitive impairment, not severe dementia. It’s intended to slow progression of Alzheimer’s disease, not just ease symptoms, and could be used to treat millions of people.Massachusetts-based Biogen needs a new blockbuster medicine after generic versions of Tecfidera, its multiple sclerosis drug, arrived in the United States last year.Biogen’s revenue dropped 25% last quarter compared to the previous year. Chief Financial Officer Michael McDonnell said this decline “was mostly driven by the continued impact of Tecfidera generics in the United States.”Watch this space: Aduhelm, which received accelerated approval, will still be studied, and there is debate over its efficacy. An advisory committee concluded last year that there was not enough evidence to support the effectiveness of the treatment.”FDA will continue to monitor Aduhelm as it reaches the market and ultimately the patient’s bedside,” Dr. Patrizia Cavazzoni, director of the FDA’s Center for Drug Evaluation and Research, said in Monday’s announcement.There are also concerns around cost. Biogen announced on Monday that the wholesale cost of treatment with aducanumab, which requires an infusion once every four weeks, carries an annual cost around $56,000 for a high dose.

      Jeff Bezos is going to space. Is that a risk to Amazon’s stock?

      In the billionaire space race, Jeff Bezos is about to break new ground.The latest: Bezos will fly to space on the first crewed flight of the New Shepard, the rocket ship made by his space company, Blue Origin. The flight is scheduled for July 20, just 15 days after he’s set to step down as CEO of Amazon (AMZN). He’ll be joined by his brother.If all goes according to plan, Bezos — the world’s richest person, with a net worth of $187 billion — will be the first of the billionaire space tycoons to experience a ride aboard the rocket technology that he’s poured millions into developing, my CNN Business colleague Jackie Wattles reports.Not even Elon Musk, whose SpaceX builds rockets powerful enough to enter orbit around Earth, has announced plans to travel to space aboard one of his company’s crew capsules. British billionaire Richard Branson has long said he would be among the first passengers aboard Virgin Galactic’s rocket-powered plane, but that flight is expected to take place later in 2021.Investor insight: Bezos isn’t leaving Amazon entirely when his tenure as CEO ends, and will transition to the executive chairman role. Should investors be concerned, then, that the company’s founder and visionary is rocketing into space?

      Up next

        The US trade balance for April posts at 8:30 a.m. ET, followed by data on job openings at 10 a.m. ET.Coming tomorrow: GameStop (GME) reports earnings as its stock continues to soar.


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