A Week in Review: August 25, 2019 - August 31, 2019

Editor’s Note: The following stories have been summarized from the Wall Street Journal. 

Top Stories: 

August 25: Deutsche Bank and UBS, Germany and Switzerland’s biggest lenders, are willing to form an unusual alliance of investment banking operations. This would help both struggling investment banks compete globally and defend themselves from encroachments of bigger U.S. rivals on their home grounds. Although both sides have failed to reach common grounds, one person involved in multiple deliberations said that talks have been on and off but never fully off of the table. 

August 26: At the beginning of this year, Bristol-Myers Squibb, a biopharmaceutical company, agreed to buy its rival, Celgene Corp., for approximately $74 billion. This would combine the two leading sellers of cancer drugs, however, the U.S. Federal Trade Commission raised concerns about clearing the merger due to anti-competitive concerns. Amgen recently agreed to buy Celgene’s psoriasis medicine, Otezla, clearing anticompetitive concerns and giving Bristol-Myers a major leap in allowing them to close their largest deal ever.

August 26: Ever since the early 2000s, more than 2,000 opioid abuse cases have been brought up, and local municipalities believe drug makers and retail pharmacy chains are to be held accountable. The first case to go to trial was in Oklahoma and was solely focused on American multinational corporation Johnson & Johnson. An Oklahoma judge ordered the company to pay $572 million for contributing to the state’s opioid-addiction crisis. Other notable companies involved in this lawsuit include drugmakers Purdue Pharma LP and Teva Pharmaceutical Industries Ltd. Johnson & Johnson also face other lawsuits alleging harms from its signature baby powder, pelvic mesh, and hip devices as well as a handful of pharmaceutical products.

August 30: Among two of the smaller players going on the defense in the opioid epidemic, Endo International PLC and Allergan PLC have agreed to settle. Endo International, an Irish pharmaceutical company that generated over 93% of 2017 sales from the U.S. healthcare system, reached a $10 million settlement earlier this month. Allergan, another Irish pharmaceutical company that acquires, develops, and markets brand name drugs, has agreed to pay $5 million. In 2017, Allergan generated 80% of net sales from the U.S. healthcare system. The company stated it would pay 1.9 million to Summit County, Ohio, and $3.1 million to Cuyahoga County, Ohio, the two plaintiffs whose claims were chosen to serve as leaders in the litigation over the opioid epidemic.

Markets: 

DJIA: 26403. 28 S&P 500: 2926.46 U.S. 10 Yr.: 1.5% Crude Oil: -0.56% Euro: 1.0991 

August 26: US stocks started off strong after President Trump said he wants to reach a trade agreement with China, signaling a potential de-escalation in previous tensions. Markets have swung wildly over the past few days, especially after China stated the week before that they would impose retaliatory tariffs. 

August 27: Although President Trump was optimistic in working out a deal with China, investors and analysts still had skepticism which led to the slip of stocks, and accelerated the buying of bonds, gold, and other “safer” assets. 

August 28: Major indexes fluttered between small gains and losses throughout the morning, however, this bounced high ultimately pushing the DJIA up more than 250 points. No major economic reports were released, and trading was relatively quiet on Wednesday. 

August 29: News on a face-to-face talk between the U.S. and China in Washington were reported helping U.S. stocks advance on Thursday creating a renewed hope for progress in the “trade war.” Both the DJIA and S&P 500 added 1.4%, and the technology-heavy Nasdaq Composite rose 1.6%. The Chinese ministry noted that the U.S. needed to remove the latest tariffs announced by President Trump last week to prevent further escalation and proceed with trade negotiations. 

August 30: The stock market bounced back in the final week of August, snapping a four-week losing streak and ends just a few percentage points below their all-time high. The S&P 500 managed to pare its loss for the month to 1.8%. Although stocks bounced back, safe-haven assets, like Gold, closed August up 6.5% and an overall gain of 19%.

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