Shutdown continues; Netflix earnings; Pharma takeover

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1. Government shutdown continues: The U.S. government shutdown enters its third day on Monday, with the Senate scheduled to vote at noon on a bill to reopen it for three weeks. However, it is still unclear whether the proposal will garner enough support from Democrats to pass.

While a brief shutdown won’t have a significant economic impact, a prolonged disruption to government services could result in a hit. The last government shutdown — which lasted more than two weeks in October 2013 — cost an estimated $20 billion, according to an estimate from Moody’s Analytics.

In Germany, months of political deadlock were broken Sunday when the center-left Social Democrats voted to begin formal coalition talks with Chancellor Angela Merkel’s center-right party, a move that brings a new Merkel-led administration closer to reality.

U.S. stock futures dipped on Monday, while Asian markets ended marginally higher and European markets were mixed.

2. Netflix reports earnings: The online streaming giant will release earnings for the quarter ended December after the close on Monday, revealing the impact of its most recent increase in subscription prices. Netflix (NFLX) raised the cost of its standard monthly subscription by $1 and the cost of its premium subscription by $2 in early October.

The company behind hit shows like “The Crown,” “Stranger Things” and “House of Cards,” added over 5 million new subscribers in the previous quarter and expects to add another 6 million in the three months to December. It plans to spend $8 billion on shows and movies in 2018.

Netflix’s stock price has gone up more than 60% over the past year.

Logitech Intl SA (LOGI) and TD Ameritrade (AMTD) are also set to report earnings after the close, while Halliburton (HAL) and Wynn Resorts (WYNN) plan to release earnings before the open Monday.

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3. Pharma takeover: Sanofi (GCVRZ) announced a deal to buy biotech firm Bioverativ (BIVV) for $11.6 billion. The French pharmaceutical group will pay $105 in cash for each share of Bioverativ, which specializes in treatments of hemophilia and other rare blood disorders.

The agreed offer represents a 64% premium over Bioverativ’s closing price on Friday.

“Together, we have a great opportunity to bring innovative medicines to patients worldwide,” Sanofi CEO Olivier Brandicourt said in a statement.

Sanofi shares dropped more than 3% in in Paris on Monday morning.

4. Friday market recap: The Dow Jones industrial average was up 0.2%, while the S&P 500 was up 0.4% and the Nasdaq was up 0.6%.

The S&P 500 and Nasdaq both ended the week at record highs, while the Dow gained 54 points to close near an all-time high.

GE (GESLX), one of America’s most iconic companies, had its worst week since March 2009 after plunging 13%. The firm will report its latest earnings on Wednesday.

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5. Coming this week:
Monday — Netflix earnings.
Tuesday — Procter & Gamble (PG), Verizon (VZ), United (BNO), Johnson & Johnson (JNJ) earnings; Davos starts; NAFTA talks resume.
Wednesday — Comcast (CCZ), Ford (F), GE (GESLX) earnings.
Thursday — American Airlines (AAL), JetBlue (JBLU), Southwest (LUV), Caterpillar (CAT), Intel (INTC), Starbucks (SBUX) earnings.
Friday — Honeywell (HON) earnings, Q4 GDP.

CNNMoney (New Delhi) First published January 22, 2018: 5:01 AM ET

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