Rocket Lab to go public in merger with SPAC Vector Acquisition
Topic of the day
Rocket Lab USA Inc. announced it will be going public through an acquisition by special purpose acquisition company (SPAC) Vector Acquisition Corp., in a deal that values the launch and space systems company at $4.1 billion. Vector Acquisition's stock soared 20.5% in premarket trading. After the merger closes, which is expected to occur in the second quarter of 2021, the company will be named Rocket Lab USA Inc. and the stock will trade on the Nasdaq under the ticker symbol "RKLB." The companies expect to have a cash balance of $750 million after the deal closes. Separately, Rocket Lab unveiled its medium-lift Neutron rocket, a reusable launch vehicle with an 8-ton payload lift capacity, to be used for mega constellations, deep space missions and human spaceflight. "Not only are we the leader in small launch, we are the second most frequently launched rocket in the U.S. annually and the fourth most frequent launcher globally," said Chief Executive Peter Beck.
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The SMI surged 1.8 percent Monday to close on 10,707 points with all 20 stocks higher, amid relief at falling bond yields. Investors had shunned stocks as bond yields rose last week. The passing of a USD 1.9 trillion coronavirus stimulus package by the US House of Representatives late Friday was also received positively. It still must pass the US Senate. More progress in Covid-19 vaccinations and easing of pandemic-related restrictions in many countries also buoyed sentiment. Leading the gains was Swatch, which climbed 3.2 percent after an analyst upgrade to "buy" from "hold". The analysts expect a recovery from Q2, but only on the assumption the Chinese market stays supportive and western European markets reopen during Q2. Competitor Richemont rose 1.9 percent. Logitech gained 1.6 percent on a slight upward adjustment of its 2021 forecast, including a strong margin rise. It profited more than expected from the coronavirus pandemic and the associated equipping of offices in homes.
European stocks gain as the rally in government bond yields eases and optimism about US government economic stimulus rises. The Stoxx Europe 600 advances 1.8% and the CAC-40, FTSE 100 and DAX all gain about 1.6%. The price of a barrel of Brent crude drops 1.1% to $63.68. French food group Danone said on Sunday (+1.4%) it would sell its stake in China Mengniu Dairy Company and return the proceeds to shareholders. The Danone board will meet on Monday to debate a response to increasing pressure from activist funds. But the funds will have reasons to point out that Danone's decision to sell its Chinese stake validates their concerns. Danone shares are up 11% since Faber took over in October 2014. Meanwhile, rival Nestlé's stock has jumped 41%, and Unilever (ULVR.LN) by 45%. AstraZeneca has sold its entire 7.7% stake in Moderna for more than $1 billion, after the U.S. biotechnology company's shares soared following its success in producing its Covid-19 vaccine. "During 2020, AstraZeneca sold a proportion of its equity portfolio receiving consideration of $1.3 billion, a large proportion of which related to the disposal of its full holding in Moderna," said the Anglo-Swedish drug company in its 2020 annual report.
U.S. stocks surged, giving the S&P 500 its best day in nearly nine months, as a weekslong advance in government-bond yields stalled, easing investors' jitters over rising interest rates. The broad stock market index soared 2.4%, its biggest one-session rise since June. The Dow Jones Industrial Average climbed nearly 2%, while the technology-heavy Nasdaq Composite jumped 3%. The gains marked a strong rebound after all three indexes declined last week, weighed down by losses among tech stocks. Stocks, and particularly shares of tech companies, have been buffeted by sharp moves in government-bond markets in recent trading sessions. Rising long-term interest rates brought by an improving economy tend to make tech and other growth stocks less attractive to investors. Shares of Apple and Tesla rose more than 5%. Exxon Mobil Corp. (+3.7%) added two new directors to its board Monday, as the beleaguered energy company tries to fend off calls for change from a pair of activist investors. The Texas oil company said activist investor Jeffrey Ubben would join its board, along with Michael Angelakis, the chief executive officer of Atairos Group and former chief financial officer of Comcast Corp. Exxon Chief Executive Darren Woods said the new directors were part of a continuing effort to refresh the company's board and reflected ongoing talks it is having with investors. Herbalife shares gained 3.1%. The company plans to overhaul its board as Carl Icahn winds down his eight-year involvement with the company and it looks to burnish its standing with other investors. Berkshire Hathaway class-B shares gained 3.5%. The conglomerate posted an increased fourth-quarter profit Saturday, with Warren Buffett using his annual missive to investors to explain a recent surge in stock buybacks.
Most major Asian benchmarks were in the red, with Chinese stocks lower following news that the nation's top banking regulator has said he's worried about a number of risks, including the rapid inflow of foreign capital and a property bubble.
Yields on U.S. government bonds continued to fall early on Tuesday, showing further signs of stabilizing after soaring to multi-month highs last week. The yield on the benchmark 10-year Treasury note was last at 1.415% having settled at 1.444% on Monday. Shorter-dated yields have also headed lower, in a reversal from last week when investors bet that the Federal Reserve will start raising interest rates earlier than previously anticipated in response to an expected burst of economic growth and inflation.
CS rises the Inditex target to 23,50 (23) EUR – Underperform
IR lowers the Engie target to 13,10 (14,50) EUR – Buy
BoA rises the IAG target to 250 (230) p – Buy
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