The stock market has had a tough time lately, with war in Ukraine, high inflation, looming interest rate hikes, and the continuing threat of the COVID-19 pandemic. Yet after big losses in recent weeks, stocks opened the new week with fresh optimism, as investors looked for ways to get through tough times. As of 7:30 a.m. ET, futures on the Dow Jones Industrial Average (^DJI -0.11%) were up 316 points to 33,241. S&P 500 (^GSPC 0.02%) futures had gained 31 points to 4,232, while Nasdaq Composite (^IXIC 0.10%) futures had risen 57 points to 13,349.
Most stocks have already reported their quarterly earnings, which means that stock-specific strategic moves are getting more attention on Wall Street. On Monday morning, shares of Turquoise Hill Resources (TRQ) and Deutsche Bank (DB -0.12%) were among the biggest movers, as both companies made some decisions that could change their respective futures.
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Rio Tinto wants the rest of Turquoise Hill
Shares of Turquoise Hill Resources were up 28% in premarket trading on Monday morning. The international copper and gold mining company got an offer from longtime investor Rio Tinto (RIO 2.25%) that gave Turquoise Hill shareholders a nice payday.
Rio Tinto announced that it had made a nonbinding bid to acquire the portion of Turquoise Hill that it doesn't already own. Currently, Rio Tinto has a controlling 51% interest in the company, which is headquartered in Montreal but whose sole asset is a copper and gold mine in Mongolia. The offer prices the remaining 49% interest at $2.7 billion. Under the terms of the offer, shareholders would receive 34 Canadian dollars for each Turquoise Hill share they own, working out to about $26.65 in U.S. dollars.
The move comes after Rio Tinto, Turquoise Hill, and the Mongolian government came to an agreement to move the Oyu Tolgoi project forward and begin underground mining operations. Consolidating Rio Tinto's ownership would make it easier to work with Mongolia and make a firm commitment to long-term operations there.
Natural resources have gotten a lot of attention as inflationary pressures have risen. For Turquoise Hill shareholders, the big question will be whether they should reinvest the cash they receive in Rio Tinto, pick another company in the sector, or put the cash to work in a completely different area of the stock market.
Deutsche Bank withdraws from Russia
Elsewhere, shares of Deutsche Bank moved higher by 9% during the premarket session. The German banking giant has wrestled with the impact of geopolitical events, and after having gotten the sign that it had made the wrong initial decision, it changed course and got in line with where much of the rest of the Western financial industry has moved.
Deutsche Bank had announced early Friday that it would wind down its business in Russia. In doing so, it joined large U.S. banks like JPMorgan Chase and Goldman Sachs in leaving the country, which faces major sanctions from the U.S. and other Western governments.
That might not seem all that surprising, but Deutsche Bank had said just the previous day that it would not withdraw from Russia, citing the needs of its clients to take time to exit from that market. That stance drew sharp criticism from many quarters, prompting the about-face.
Deutsche Bank stock fell on Friday following the initial announcement, but consideration over the weekend suggested that the German bank had already managed to reduce its exposure to Russia substantially. European banks more broadly will face significant disruptions from the loss of Russian business, but investors on Monday were more hopeful that the severity of sanctions might bring a quicker end of the war in Ukraine than otherwise would have been the case.