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Microsoft, Nuance, Alibaba and Matsuyama - 5 Things You Must Know Monday

Stock futures decline as investors pause following a third straight week of gains for equities; Microsoft confirms it will buy Nuance Communications; Alibaba is fined $2.8 billion by Chinese regulators.

Here are five things you must know for Monday, April 12:

1. -- Stock Futures Retreat After Record Highs for Dow and S&P 500

Stock futures declined Monday as investors paused following a third straight week of gains for equities and record highs for the Dow Jones Industrial Average and S&P 500.

Contracts linked to the Dow fell 51 points, S&P 500 futures declined 6 points and futures on the tech-heavy Nasdaq were down 43 points.

The yield on the 10-year U.S. Treasury note slipped Monday to 1.659%. It had been as high as 1.75% early last week on concerns about rising inflation. Traders this week will be monitoring U.S. Treasury auctions of $271 billion of new debt.

Federal Reserve Chairman Jerome Powell, in an interview on CBS's "60 Minutes,"said any increases in U.S. inflation would be temporary.

He said the central bank would consider raising interest rates when the nation was back to maximum employment and inflation was back to 2%.

"It'll be a while until we get to that place. But that's the guidance that we've offered to the public of the conditions we'd want to see before we start raising interest rates."

Powell said Sunday the U.S. economy was at a turning point, as vaccines roll out, the government provides further fiscal stimulus and more Americans land jobs. But the nation isn't yet out of the woods.

"I would say this. What we're seeing now is really an economy that seems to be at an inflection point."

2. -- Microsoft Reportedly Set to Buy Nuance Communications

Microsoft  (MSFT) - Get Microsoft Corporation Report confirmed Monday it entered an agreement to buy Nuance Communications  (NUAN) - Get Nuance Communications Incorporated Report for about $56 a share.

It was reported over the weekend that Microsoft might announce the deal Monday.

At $56 a share, the price is a 23% premium to Nuance's closing price Friday of $45.58. 

Nuance shares were jumping 22.88% to $56.01 in premarket trading Monday. Microsoft was falling slightly.

If the deal for Nuance goes through, it would be Microsoft’s second-largest acquisition since the $27 billion purchase of LinkedIn in 2016.

Bloomberg noted Microsoft has been working with Nuance for two years on AI software that helps clinicians capture patient discussions and integrate them into electronic health records. It also has been combining Nuance products into its Teams chat app for telehealth appointments.

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"We believe (Nuance) represents a unique asset on the healthcare front for Microsoft,” said Wedbush analyst Dan Ives.

Microsoft is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells MSFT? Learn more now.

3. -- This Week's Calendar: Earnings From JPMorgan, Wells Fargo, Goldman Sachs

Cannabis company Aphria  (APHA) - Get Aphria Inc Report is expected to report earnings Monday. Reports are expected later during the week from JPMorgan Chase  (JPM) - Get JP Morgan Chase & Co. Report, Wells Fargo  (WFC) - Get Wells Fargo & Company Report, Goldman Sachs  (GS) - Get Goldman Sachs Group Inc. (The) Report, Bank of America  (BAC) - Get Bank of America Corporation Report, Citigroup  (C) - Get Citigroup Inc. Report, Morgan Stanley  (MS) - Get Morgan Stanley Report, United Health  (UNH) - Get UnitedHealth Group Incorporated (DE) Report, Bed Bath & Beyond  (BBBY) - Get Bed Bath & Beyond Inc. Report, PepsiCo  (PEP) - Get PepsiCo Inc. Report, Rite Aid  (RAD) - Get Rite Aid Corporation Report, BlackRock  (BLK) - Get BlackRock Inc. Report and Delta Air Lines  (DAL) - Get Delta Air Lines Inc. Report.

Top Earnings to Watch: JPMorgan Chase, PepsiCo, Goldman Sachs

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The U.S. economic calendar for Monday is bare but the week will see data on consumer prices, retail sales, manufacturing, jobless claims, housing starts and consumer sentiment.

4. -- Alibaba Jumps as Antitrust Fine Less Than Feared

Alibaba  (BABA) - Get Alibaba Group Holding Limited American Depositary Shares each representing eight Report was fined a record $2.8 billion by Chinese regulators in an antitrust crackdown, but the stock rallied after the e-commerce giant said it doesn't expect any material impact from the penalty.

American depositary receipts of Alibaba jumped almost 6% to $236.66 in premarket trading Monday after the fine was less severe than feared and a key uncertainty for the company was lifted.

The 18.2 billion yuan penalty was based on just 4% of Alibaba's 2019 domestic revenue, regulators said, according to Bloomberg. It was far less than the maximum 10% allowed under Chinese law. 

“We’re happy to get the matter behind us,” said Joseph Tsai, co-founder and vice chairman, on an investor call Monday. “These regulatory actions are undertaken to ensure fair competition.”

The fine also came with “comprehensive rectifications” sought by regulators, one of which forces Alibaba to curtail the practice of forcing merchants to choose between it or a competing platform.

The Chinese government launched an antitrust investigation of the company last year after its founder Jack Ma publicly criticized the state-owned banking system and bank regulators.

5. -- Hideki Matsuyama Wins the Masters

Hideki Matsuyama won the Masters, becoming the first Japanese man to claim one of golf’s major titles.

The Masters win for the 29-year-old Matsuyama was his sixth victory on the PGA Tour.

Matsuyama's Methodical Masters Approach Was an Apt Path to Victory