FDA authorizes Merck’s COVID pill, JD.com shares tank after Tencent divests, Tesla stock soars

Yahoo Finance Live takes a look at several trending stocks going into the opening bell, including Merck & Co. as the FDA authorizes its COVID-19 treatment pill, Tesla following Elon Musk's sale of shares, and JD.com as owner Tencent disinvests from multiple companies.

Video Transcript

JULIE HYMAN: I'm just getting news here that the FDA, the Food and Drug Administration here in the US as expected, has authorized Merck's COVID-19 oral antiviral pill following on the heels of Pfizer's approval earlier in the week. Again there was reporting at the beginning of the week that both of these pills would be authorized. So this adds to the tools in the arsenal to fight COVID-19, both on the vaccine front and on the treatment front. We're not seeing much movement here in the pre-market in these Merck shares, again perhaps because this was expected news but still it is welcome news as we look at the full fight here against COVID-19 and against the Omicron variant specifically. Again those Merck shares are little changed.

So let's talk about some of the other stocks that we are watching here this morning as well. We've got our eyes on some Chinese ADRs this morning, particularly, we're seeing a drop in JD.com and that's because Tencent says it's going to distribute more than $16 billion worth of JD.com shares. This is going to be a one-time dividend here and there's a little bit of back and forth over whether this was expected or not. You see those JD.com shares are off by nearly 8%. It does seem like this in particular, is an unexpected move but there were questions about whether Tencent would be divesting itself of some of its holdings, and there seem to be some questions about whether it might divest itself of more of its holdings, Sozz?

BRIAN SOZZI: Yeah, this is-- Tencent has a very large and expansive portfolio of investments. I believe before these sales, one-third of their market cap was really reflected in this portfolio of stocks. It owns lots of tech companies here. But a couple of names do come to mind here, if you are concerned that Tencent is going to be an active seller of its stock, whether that is because of regulatory concerns, catching heat from the Chinese government, whatever it is here, I think you have to start thinking about, well, does that bring pressure to some other stocks, well-known stocks in that Tencent portfolio?

And a couple of names to highlight, really first up is Spotify, Tencent owns 8.7% of Spotify and is the company's third-largest shareholder just in terms of outstanding shareholders. Next up, Warner Music Group, Tencent owns about 6.5% of Warner Music Group here as well. Again, the third-largest shareholder in Warner Music Group. Also, they are a major player in Pinduoduo, I know a Jared Blikre favorite stock right there. So again if they're dumping JD.com, perhaps they dump some of these other stocks.

JULIE HYMAN: They might. I mean, Didi Global in the portfolio, but also Meituan, the food delivery company. Bloomberg is reporting that they spoke to a person familiar with Tencent's portfolio plans and said that they're not planning to divest more but we shall indeed see here. As we saw, those Tencent shares are trading a little bit lower here this morning, along with JD.com really trading lower. So we'll keep an eye on those to see. It's been very interesting here, to say the least, in many of those Chinese shares that are listed here in the United States, and of course, among the ones that I just mentioned, Didi is going to be delisting from the United States.

Let's talk Tesla as well, as we're talking about divestments, right? Because we are getting a little bit more information on Elon Musk's plans in terms of his selling of shares in the company. We thought he was done. He wasn't quite done. He sold another chunk of Tesla shares, $928.6 million worth. He said he's almost done. He made that comment on Twitter. So we're seeing the shares sort of stabilize here this morning but we've seen kind of a recent volatility definitely in those Tesla shares, Sozz.

BRIAN SOZZI: Yeah. We've been following this stock really down the past month as these stock sales have continued and perhaps now, Julie, the market will go back to looking at the fundamentals of Tesla, which you know, you can criticize Elon Musk all you want, the past couple of quarters from Tesla have been very, very impressive. So the company has navigated the supply shortages that are impacting the auto market very well. So perhaps they put up a good quarter in a couple of weeks.

JULIE HYMAN: Perhaps they do. I mean, you know, you also have seen obviously, still a gain on the year for Tesla shares even as we have seen some rockiness as Elon Musk has been selling those shares. And you know, there's also some more competition coming into the market. So it seems like 2022 is going to be really interesting in that regard, especially a lot of the legacy automakers that are really pushing the electric vehicle situation.

Although, if you look at what they're coming out with, and the one that really comes to mind is the Lightning, right? The Ford F-150 electric version, it's not even something that competes with Tesla directly, right? Because Tesla does not currently have that kind of a product. You've got other upstarts perhaps that are more in that market. So it'll be really interesting to see what Tesla looks like at the end of 2022 in terms of market share.

BRIAN SOZZI: Now, that Lightning is impressive, Julie. I put a post out on Twitter, in addition, it could charge your home. It's pretty wild, but in addition, if you have another electric car, you could charge that up via the Lightning, what I think they call it peer-to-peer charging. It's pretty wild stuff. I can't do that with my gas-powered car right now unless I want to siphon it out with my mouth and put it in my mom's car or something, I don't know.

JULIE HYMAN: Yeah, definitely not. All right, we're about 30 seconds to the opening bell here on this Thursday before Christmas and we've got futures indicating a higher open. We got a lot of economic data earlier and we're going to get more, by the way, we're getting new home sales a little bit later on, as well as another read on consumer sentiment. And we got as I mentioned earlier this morning, personal spending up 0.6%, even as the so-called PCE core deflator--

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--rising 4.7% year over year. So traders definitely considering all of this, this morning as we watch the opening bell.

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All right, we got a SPAC listing here this morning ringing the opening bell on this Thursday. As we see, stocks open up a little bit higher. I've also been watching the bond market here this morning on the heels of all of this economic data, and there we are seeing I guess a little bit of an uptick, right? In bonds in recent days, in the 10-year in recent days, but it has not been a huge one. Look at that, not even a basis point higher. 1.46% is where we stand on the 10-year.

So this sort of situation persisting here where we are being told by the Fed that they're going to wind down their bond-buying program, they're going to start raising rates. We're getting this economic data that continues to show the economy's relatively robust and so is inflation, and yet, bond yields are still remaining kind of put where they are.