5 Things to Know Before Markets Open

Shares of Merck fell on news it would buy biotech company Prometheus Biosciences and Treasury Secretary Janet Yellen said tighter bank lending may help end federal interest rate hikes. Here’s what investors need to know today.

1. Merck Shares Fall After Acquisition Deal

Prometheus Biosciences (RXDX) shares are up over 70% in pre-market trading and shares of Merck (MRK) are down 1.5% on news Merck will buy the biotech company for $10.8 billion. The move is Merck’s latest push into the lucrative market for immune-disease treatments.

2. Yellen Says Banks May Tighten Lending

Treasury Secretary Janet Yellen said U.S. banks may tighten lending, lowering the need for the Federal Reserve to raise interest rates. Yellen said the pullback in bank lending would not significantly change her economic outlook.

3. Banks Raise Fears Over Commercial Real Estate

Executives at some of the biggest U.S. banks singled out commercial real estate (CRE) as an area of growing concern in recent earnings calls, with property values falling and more borrowers defaulting on their loans amid rising interest rates and a slowing economy. Banks represent 54% of the overall $5.7 trillion CRE market, with small lenders holding 70% of CRE loans. More than $1.4 trillion in CRE loans will mature by 2027 with some $270 billion coming due this year.

4. Moderna, Merck Research Shows Cancer Vaccine Promise

Moderna and Merck showed some progress in their plans to develop cancer vaccines. Results from a mid-stage trial indicated the vaccine helped prevent a relapse for melanoma patients, demonstrating progress in the pursuit of shots to ward off cancer by jumpstarting the immune system.

5. Best Buy Announces Layoffs as Sales Soften

Best Buy said it will lay off hundreds of store employees as more shoppers buy online and sales of consumer electronics weaken. In a statement, Best Buy said “we are evolving our stores and the experiences we offer to better reflect the changes in customer shopping behavior.”