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California Closes Down as COVID Cases Rise

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What had been another exuberant start to a new trading week, with a fresh Q2 earnings beat from PepsiCo (PEP - Free Report) and the reopening of Walt Disney’s (DIS - Free Report) Disney World in Florida, turned south in the final hour of regular trading Monday. California Governor Gavin Newsom announced the state is ordering the closure of recently opened indoor bars, restaurants, health clubs, movie theaters and places of worship, to name just a few. The most populous 30 counties in the state, accounting for 80% of California’s population, are being particularly affected.

California is home to more to 39.5 million people, making it the most populated state in the U.S., by 10+ million more than second-place Texas. The state now has a COVID-19 tally of more than 327K cases — 8700 per 1 million citizens — with over 7000 deaths in the state alone. That means California has 5.1% of the entire coronavirus fatality rate in the U.S., and 1.2% of the world’s reported deaths from the coronavirus. LA County alone has reported 3800 deaths from the disease to date.

Today’s decision will make a big dent in the overall U.S. reopening and subsequent economic growth, not just in California-based restaurants like Jack in the Box (JACK - Free Report) , down 2.3% Monday, but private companies like LA Fitness, as well. Marin County-based RH (RH - Free Report) dropped 1% in regular trading, as well. But California hosts all manner of national and international business headquartered out of state and out of country, as well. This suggests the latest shutdown will have a real impact on Q3 earnings figures, GDP and employment; we are not yet out of the woods in dealing with the coronavirus. Los Angeles and San Diego had already reported it will start the school year at home.

This morning, San Jose, CA-based Maxim Integrated (MXIM - Free Report) has risen 13% on the news that its business was merging with Massachusetts-based Analog Devices (ADI - Free Report) for $21 billion in an all-stock deal. Maxim shareholders would own 0.63 shares on ADI stock for a 31% stake in the company. Analysts consider this a solid acquisition for ADI, as Maxim’s business focuses on microchips for programmable features in autos, healthcare services, communications and manufacturing. ADI traded down 1.7% on the news.

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