Plus, the U.S. is buying 100 million additional doses of Johnson & Johnson’s COVID-19 vaccine, Apple is reportedly cutting its iPhone production by 20% due to lower than expected demand for its iPhone 12 mini model, and SunRun shares are up on two analyst upgrades.
Stocks were higher at the open Wednesday with the Dow adding 74 points, or 0.2%. The S&P 500 gained 0.4%, while the Nasdaq rose 1.2%.
It’s official. General Electric is selling its jet leasing business to rival AerCap in a deal valued at $30 billion. The deal will give GE a 46% stake in the combined company and will generate around $24 billion in cash. Following the announcement, GE shares are down more than 6% while AerCap is down nearly 5% at the time of writing. “This is the right time to further accelerate our transformation,” said GE CEO Larry Culp. “This action will enable us to significantly de-risk GE and continue on our path to being a well-capitalized company. As the industry recovers that equity stake that we have in the combined business undoubtedly will be worth more than it is today. We’re putting GE together with an important partner, creating, I think, more value for the GE shareholder over time.” GE also announced today its plan for a reverse stock split. The conglomerate is proposing to give investors one share for every eight they now hold, taking its share price to around $112 and reducing the shares outstanding to around 1.1 billion from just under 9 billion.
The Biden administration plans to buy 100 million additional doses of Johnson & Johnson’s COVID-19 vaccine. President Joe Biden is expected to announce the plan today during a meeting at the White House with executives from J&J and Merck. The news comes as vaccinations rise across the U.S., with more than 60 million people—or 18% of the population—now having received at least one dose of a COVID vaccine. A dramatic increase in vaccine supply has even led several states to start opening up vaccine eligibility to people as young as 50 with no restrictions, while Alaska has made vaccinations available to anyone age 16 or older who lives or works in the state.
Nearing the finish line. With vaccinations ramping up, the House is set to pass the $1.9 trillion coronavirus relief bill approved by the Senate today, setting President Biden to sign the deal by the weekend. Biden is expected to sign the legislation before Sunday’s deadline to renew unemployment aid programs, and the president expects stimulus payments of up to $1,400 to begin hitting Americans’ bank accounts this month. “This legislation represents the boldest action taken on behalf of the American people since the Great Depression,” said House Democratic Caucus Vice-Chairman Pete Aguilar.
Apple shares are down 1% at the time of writing on reports that it has cut orders for iPhones by 20%. Nikkei Asia reported the decrease is due to lower demand for its smallest iPhone 12 mini model. Still Apple plans to build 230 million iPhones in 2021, up 11.6% from 2020, even as the iPhone 12 mini isn’t selling as well as expected as consumers gravitate to iPhone models with larger screens. In other Apple news, the company announced that it plans to build a new chip lab in Munich as part of a 1 billion euro ($1.2 billion) plus investment push to develop custom chips for 5G mobile and other wireless technologies in Germany over the next three years. The 30,000-square-meter (98,400-square-foot) facility is scheduled to pen in late 2022 and will employ hundreds of people. “I couldn’t be more excited for everything our Munich engineering teams will discover – from exploring the new frontiers of 5G technology, to a new generation of technologies that bring power, speed, and connectivity to the world,” Apple CEO Tim Cook said in a statement.
And SunRun shares are up more than 5% today following upgrades from Morgan Stanley and UBS, to Overweight and Neutral, respectively. Morgan Stanley analyst Stephen Byrd said the company is a “compelling value” at current levels driven by multiple factors including a management team with a strong track record and a rapidly growing “economic wedge” between incumbent utility costs and SunRun’s falling cost structure. Byrd also noted that the company is likely to be a key beneficiary of upcoming clean-energy legislation, writing that such legislation is an “underappreciated upcoming catalyst… that will provide further support for the clean-energy sector.”
Stocks We’re Watching
Surgery Partners Inc (NASDAQ: SGRY): Surgery Partners shares are up more than 4.5% today after the company reported fourth quarter and full year 2020 results. “With our continued focus in our core short-stay surgical business, we have eliminated distractions and have repositioned ourselves for the continued acceleration of higher acuity cases to outpatient settings,” Surgery Partners CFO Tom Cowhey said in the earnings press release. “To that end, during 2020, we closed our toxicology laboratory and successfully divested non-core anesthesia assets and our optical group purchasing organization. On February 1, 2021, we closed an equity offering, raising nearly $250 million of net proceeds and giving us ample capital to make additional investments across our business into existing and new lines of service, including robotic purchases and the expansion of our total joint and cardiology programs.”