The Chinese stock market fell sharply and the U.S. and other markets around the world have followed after President Trump issued his latest trade threat, asking the USTR to draw up a list of $200B worth Chinese imports that could be subject to a 10% tariff. If China responds, Trump threatened to place tariffs on a further $200B worth of imports. With the trade tensions heating, the Dow is down for the sixth consecutive day and has wiped out all its gains for the year. ECONOMIC EVENTS: In the U.S., the report on housing starts beat estimates, with a big May gain for starts but a setback for permits. Starts were up 5.0% month-over-month to a 1.35M rate, while permits declined 4.6% from the prior month to an adjusted rate of about 1.3M. COMPANY NEWS: Shares of Sarepta Therapeutics (SRPT) are surging after the company announced positive preliminary results from its Phase 1/2a gene therapy clinical trial in individuals with Duchenne muscular dystrophy. Reacting to the R&D day announcements, Baird analyst Brian Skorney said via Twitter that the results are "a game changer," while JPMorgan analyst Anupam Rama says the micro-dystrophin data reported this morning by Sarepta beat his "grand slam scenario." Near midday, Sarepta shares are up 43%, while shares of Solid Biosciences (SLDB), which is also exploring treatments for DMD, is up 66%... On the M&A front, Roche (RHHBY) announced a deal to acquire the outstanding shares of Foundation Medicine (FMI) not already owned by Roche and its affiliates at a price of $137 per share in cash. This corresponds to a total transaction value of $2.4B on a fully diluted basis, and a total company value of $5.3B on a fully diluted basis. Also, Cotiviti Holdings (COTV) announced that Verscend Technologies, a portfolio company of Veritas Capital, has agreed to acquire Cotiviti. Shareholders will receive $44.75 in cash per share of Cotiviti common stock, and Verscend will assume all of Cotiviti's outstanding debt, resulting in an enterprise value of approximately $4.9B... The New York Times reported that President Donald Trump told Apple (AAPL) CEO Tim Cook that the U.S. government would not levy tariffs on iPhones assembled in China, though Apple still fears China will retaliate "in ways that hamstring its business," according to people close to the tech giant. MAJOR MOVERS: Among the noteworthy gainers was First Connecticut (FBNK), which rose 19% after it agreed to be acquired by People's United (PBCT) in a 100% stock transaction valued at approximately $544M. Shares of People's United are 2% lower after the news. Also higher was Acadia (ACAD), which gained 5% after Point72 Asset Management disclosed a 5.2% passive stake in the company. Among the notable losers was Snap (SNAP), which slipped 7% after Cowen analyst John Blackledge said his survey of Snap users shows usage is declining on both a monthly and year-over-year time period. Also lower was Tesla (TSLA), which fell 5% after CNBC reported that CEO Elon Musk told his company about an attempted "sabotage" by an employee and about another factory fire. INDEXES: Near midday, the Dow was down 322.12, or 1.29%, to 24,665.35, the Nasdaq was down 61.57, or 0.79%, to 7,685.45, and the S&P 500 was down 18.29, or 0.66%, to 2,755.46.
