Daily Brief - 6 Feb 2024

Novartis to acquire MorphoSys for €2.7 billion for new cancer drug

Novartis, has agreed to buy German drugmaker MorphoSys for a whopping €2.7 billion. This deal will let Novartis get its hands on new cancer treatments, including an experimental drug for blood cancer. MorphoSys's share price soared after news of the deal broke, even though some experts think Novartis might be paying too much. The buyout comes as part of Novartis CEO Narasimhan's plan to focus on high-growth diseases by making strategic purchases. MorphoSys has been hoping for a win with its new drug, pelabresib, despite mixed results in tests. This acquisition marks a big move for Novartis as it aims to strengthen its position in the cancer treatment market.

Blackstone eyes L’Occitane for potential takeover

Blackstone Inc., is thinking about making an offer to buy L’Occitane, a company that makes skin-care products. They're checking everything carefully before deciding. News of this interest made L’Occitane's shares go up by 15% in Hong Kong, hitting their highest point since February 2022. L’Occitane's boss, Reinold Geiger, who owns most of the company, might join forces with Blackstone for this deal. However, it's early days, and there's no sure thing a deal will happen. L’Occitane, which started selling shares to the public in Hong Kong in 2010, has seen its share price go up and down over the years.

Treasury bonds take a hit as Fed rate cut hopes fade

Treasury bonds in the US have had their biggest drop in months, as hopes for an early interest rate cut by the Federal Reserve have been dashed. The yields, which move opposite to prices, have shot up after recent strong economic data and comments from Fed officials, including Chair Jerome Powell, suggesting that rate cuts are not on the horizon before May. The bond market was already jittery, and Powell's remarks on "60 Minutes" confirming no cuts in March have further pushed yields up. Investors had been betting on rate decreases soon, but with the Fed cautious about inflation, those bets are now unwinding, leading to a significant increase in yields across both US and European bonds.