📊 A Rough Week for Stocks, and a Trillion-dollar Drugmaker

Abbott Laboratories has reached a deal to acquire Exact Sciences, the cancer diagnostics company best known for its Cologuard colorectal cancer test and its Oncotype DX breast cancer assay. The deal values Exact Sciences at $21 billion in equity. However, after accounting $1.8 billion in net debt that Abbott plans to absorb, the total deal value is approximately $23 billion. Both boards approved the deal, which is expected to close in the second quarter of 2026, pending regulatory and shareholder approval.

Exact Sciences is forecasted to bring in more than $3 billion in revenue this year alone, and once the merger is complete, it could reportedly push Abbott's annual diagnostics sales past the $12 billion mark. For Abbott, this is a strategic pivot. With revenue from COVID-19 testing winding down, this deal provides a significant entry point into the booming markets of cancer screening and precision oncology. It is one of the biggest deals for Abbott in nearly a decade, after its 2017 acquisition of St. Jude Medical, and it signals the company's first major foray into oncology-focused diagnostics.

Analysts anticipate that the premium price will weigh on Abbott's earnings in the near term, but the company refers to Exact's tests as a long-term growth platform in a critical area of healthcare. All things considered, the acquisition signals Abbott's intent to extend beyond its traditional lab testing and device businesses and to become a much larger player in early cancer detection and other life-saving diagnostics.

Oil prices slide: Brent and West Texas Intermediate settled around 1% lower at their lowest levels in a month, as the United States efforts to broker a Russia-Ukraine peace deal, a stronger dollar and mixed Fed signals all pulled crude down by raising the prospect of more Russian supply and softer demand.

December rate-cut odds: New York Fed President John Williams said he still sees room for another near-term adjustment lower in rates, and Governor Stephen Miran reiterated his support for deeper easing. Market-implied odds of a December cut are now over 75%, from roughly 30-40%, as traders lean into a more gentle path.

Jobs report: The delayed September jobs report shows non-farm payrolls up about 119,000 while unemployment edges higher, and October's report is cancelled after the shutdown, giving investors a weaker but still positive growth signal that supports bets on further easing.

Europe selloff: The equities in Europe fell toward their worst week since March as expensive tech names retreat and a more hawkish Fed tone sours risk appetite. This lifts the regional risk premia and tightens equity financing conditions for exporters and defence names.

China data: October data show industrial output is expanding at a modest pace and manufacturing activity is hovering near contraction, telling investors that the world's second-largest economy is stabilizing but not re-accelerating and tempering expectations for global demand.

Nvidia earnings: Nvidia reported a quarterly revenue of about $57 billion from data-center AI chips, guided even higher for next quarter, but after the initial jump, a selloff in global tech occurred as investors shifted their focus to stretched valuations and uncertain AI capex payoffs that press on growth indices and funding conditions.

Meta antitrust win: Meta wins a landmark United States antitrust case that rejects claims it holds a social-media monopoly and blocks forced divestitures of Instagram and WhatsApp, removing a major break-up overhang from its cash-flow outlook and easing regulatory risk for large platforms.

Tech inflows: Bank of America flow data show tech funds are on track for a record of around $75 billion of inflows this year, even as AI leaders wobble. This suggests that still-persistent investor demand is helping support valuations and liquidity for the sector.

Euro inflation: The latest report from Eurostat shows euro-area inflation eased to just over 2%, reducing pressure on the European Central Bank to tighten further and nudging eurozone bond yields and rate expectations lower.

United States trade gap: The long-delayed August trade report showed the United States trade deficit narrowed about 23.8% to $59.6 billion as imports fell roughly 5% under broad tariffs, temporarily boosting Gross Domestic Product calculations while underscoring how tariff policy is reshaping trade flows.

Walmart earnings: Walmart posts solid third-quarter growth, raises full-year sales outlook, and announces the move of its listing to Nasdaq. This underlines resilient United States consumer demand and tees up potential shifts in index and Exchange-Traded Fund flows.

Cancer trial: Zymeworks and Jazz Pharmaceuticals moved higher following Phase 3 HERIZON-GEA-01 data for their HER2-targeted drug Ziihera, which demonstrated a statistically significant progression-free-survival benefit compared to standard trastuzumab-based therapy, boosting confidence in a potential new standard of care and future oncology revenues.

Vita Coco tariffs: Shares of Vita Coco surged after the Trump administration reversed tariffs on certain agricultural imports, cutting its effective coconut-water tariff rate from about 23% to roughly 6% and giving the company room to promise lower shelf prices and better margins.

Demand for Lithium: Lithium prices and producers rose after the chairman of Ganfeng Lithium forecast that global battery-lithium demand could rise 30-40% in 2026, prompting investors to reprice the long-term outlook for Electric Vehicle materials and supply projects.

Crypto selloff: Bitcoin and other major cryptocurrencies dropped to multi-month lows, erasing a chunk of recent gains and likely tightening financial conditions for leveraged crypto firms and listed proxies linked to token prices.

Palo Alto deal: Palo Alto Networks agreed to buy cloud observability firm Chronosphere for $3.35 billion in cash and stock, while raising full-year guidance - a sizeable AI-era bet that extends its platform, but also raises questions about price, integration risk, and capital allocation.

Intuit-OpenAI deal: Intuit announced a multiyear partnership deal worth more than $100 million with OpenAI to bring its tax and finance apps into ChatGPT. The stock gained in early trading as investors priced in stronger AI-driven user engagement and revenue growth.

Other interesting reads:

Markets visited the rabbit hole: After Thursday's wild swings saw the Dow surge 700 points and the S&P 500 rise 1.1%, as Fed's Williams hinted at the possibility of a rate cut. Traders cheered Nvidia's blowout earnings, but puzzled jobs data and questions over how long the AI boom would sustain kept caution high. Fear and volatility remain high. With Friday's sharp rebound, markets gave traders a short sigh of relief. (The Unexpected Adventure)

Lilly hits $1 trillion on weight-loss boom: Eli Lilly became the first drugmaker in the trillion-dollar club as surging demand for Mounjaro and Zepbound turned obesity care into its main growth engine. That success has given the company one of big pharma’s richest valuations and sharpened questions about how long GLP-1 momentum can keep driving its growth story. (The Weight-Loss Boom)

Uncle Sam’s portfolio beats the S&P 500: The Trump administration's move to acquire equity stakes in Intel, MP Materials, Lithium Americas, Trilogy Metals, and other strategic firms has built a government portfolio that tops the S&P 500 this year. Proponents position it as a hard-edged industrial policy for national security. Critics contend it distorts markets and puts taxpayer money on the line as a de facto stock picker. (The State Investor)

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🟩 Up this week

Medtronic (MDT) +5.90% WTD: This stock price went up after a clean quarterly earnings beat and raised full-year guidance on strength in cardiovascular and pulsed field ablation devices, supporting confidence in its medium-term cash-flow growth. (The True Confidence)

Sigma Lithium (SGML) +59.90% WTD: Lithium-related companies' stocks rose after the chairman of Ganfeng Lithium said global lithium demand could grow 30–40% in 2026, sparking a sharp rally in Sigma and peers as investors repriced long-term Electric Vehicle materials demand. (The Lithium Rally)

Amer Sports (AS) +13.04% WTD:The stock jumped after the company reported third-quarter earnings and revenue ahead of expectations, reinforcing its growth narrative in branded sports equipment and improving sentiment around margins and scale. (The Improving Sentiment)

D.R. Horton (DHI) +3.36% WTD: The homebuilder eased as markets digested still-weak builder sentiment and ongoing affordability and rate headwinds, tempering expectations for near-term orders. (The Recipe of Homes)

🟥 Down this week

Coinbase (COIN) -15.44% WTD: Shares of the crypto exchange tumbled in tandem with a broad selloff in bitcoin and ether, with risk-off flows in digital assets increasing worries about trading volumes and fee revenue. (The Digital Assets)

Jacobs Solutions (J) -15.69% WTD: The stock fell as the company posted lower quarterly profits and bigger tax expense despite adjusted earnings slightly beating estimates, raising investors' concerns about the quality of the earnings. (The Earnings Read)

Plug Power (PLUG) -13.14% WTD: Plug Power plunged after announcing a $375M private offering of convertible senior notes, a refinancing step that improves interest costs but stoked fresh worries about dilution and balance-sheet risk. (The Debt Offering)

Strategy Inc. (MSTR) -13.41% WTD: The former MicroStrategy extended its slide as bitcoin fell to new multi-month lows, sending the stock closer to the implied value of its on-balance-sheet holdings of bitcoin. (The Holdings Value)

That’s the wrap for this week’s market movements. We’ll be back next week with more updates on our live portfolio.

Until then, happy investing!
— The Investogy Team, Kätlin & Siimon

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