Good morning. Happy Friday.
The Asian/Pacific markets leaned up. China, Hong Kong, India, Malaysia, Singapore, Thailand and the Philippines did well; New Zealand was weak. Europe, Africa and the Middle East also lean up. Denmark, Poland, Turkey, Finland, Norway, the Netherlands, Italy, Portugal and Sweden are up; the UAE, Israel and Saudi Arabia are down. Futures in the States point towards a down open for the cash market.
—————
Online Course: Mini Masterclass in Trading
—————
The dollar is flat. Oil and copper are up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Emergency lending pullback
Getting a lot of attention overnight was a decision by Treasury Secretary Steven Mnuchin to not renew some emergency Fed programs that tapped funds from the CARES Act. Those include ones that support the markets for corporate bonds and municipal debt, as well as the Main Street Lending Program to small- and medium-size businesses, which had been lightly used. “Companies don’t need more loans, and instead require more grant money, which requires action from Congress,” Mnuchin declared, adding that the programs “have clearly achieved their objectives.” While four other programs will be kept in place for an additional 90 days, the Fed responded that it “would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.” Do they need to be extended? “This is getting a lot of debate, but I’m going to make the case that whether we extend them or not may not be that material to financial markets,” St. Louis Fed President James Bullard said earlier this week. “We can always start up the liquidity programs again in the future.”
Coronavirus cases continue to surge
Not much movement was seen from futures overnight, with contracts tied to the Dow and S&P 500 dipping slightly and the Nasdaq inching up. Things have been choppy in recent days amid soaring coronavirus infections and what that will mean for the economy, while the development of an effective vaccine stokes hopes of a post-pandemic world. Many states have already rolled back reopening plans and implemented new restrictions to curb the spread of COVID-19 as the U.S. logged its highest-ever number of daily reported infections at 187,833, as well as a record amount of hospitalizations. On Thursday, California governor Gavin Newsom issued a “limited Stay at Home Order” on a majority of the state’s residents, though Joe Biden said he will not pursue a “national shutdown – period.”
Lack of fiscal stimulus
“Last night, McConnell’s folks agreed to sit down and the staffs are going to sit down today or tomorrow to try to begin to see if we can get a real good Covid relief bill,” Sen. Chuck Schumer said during a press conference on Thursday. Sound familiar? Congress has been at the table for months, but both sides want to claim a victory in the negotiations, with politics still at the center of the deadlock. Many point to the Senate runoffs in Georgia on Jan. 5 as the earliest date that we could see some action, meaning the next coronavirus aid package is at least a month away. A lack of stimulus and surging cases haven’t so far derailed the recent rally, given the crosscurrent of vaccine optimism and holiday spending.
Retail Bros. vs. Wall Street
It’s one of the topics that has been widely discussed since the sharp market drop in March, only to see a record recovery that took months instead of years. While many hedge fund managers have said retail investors were responsible for driving some U.S. stocks to “nightmare” valuations, Robinhood (RBNHD) co-CEO Vlad Tenev sees his customer base as a “market-stabilizing force during the volatility.” New entrants to the market actually played a key part in the quick recovery, taking on more risk and carrying a long-term outlook, he told Jim Cramer during a Mad Money interview. “People who are investing for the first time in their 20s or 30s have a very different outlook than people that are maybe a handful of years away from retirement. When you’re younger you know that there are decades of compound returns and decades of riding out the ups and downs of the market.”
Emergency use authorization
Pfizer (NYSE:PFE) intends to file an application to the FDA for emergency use of its coronavirus vaccine today, according to Health and Human Services Secretary Alex Azar, with Moderna (NASDAQ:MRNA) soon to follow. Earlier this week, Azar said there will be roughly 40M doses of vaccine available by the end of this year between the two companies, enough to inoculate about 20M people. Both vaccines have shown about 95% efficacy rates in late-stage trials and are seen by investors and policymakers as a solution to get the economy going again. Meanwhile, the WHO recommended against the use of Gilead’s (NASDAQ:GILD) remdesivir to treat hospitalized COVID-19 patients, saying there was no evidence that it improves survival or the need for ventilation.
CDC warns against Thanksgiving travel
“Postponing travel and staying home is the best way to protect yourself and others this year,” the CDC says in a new advisory. For Americans who do choose to travel, the CDC advised doing so as safely as possible, by following the same everyday recommendations like wearing a mask in public places, social distancing and washing hands frequently. “The reason that we made the update is that the fact that over the week we’ve seen over a million new cases in the country,” said Dr. Erin Sauber-Schatz, the CDC’s lead for Community Intervention and Critical Population Task Force.
Buzz & Huff
BuzzFeed has agreed to acquire Verizon Media’s (NYSE:VZ) HuffPost in a stock deal as tech goliaths Facebook (NASDAQ:FB) and Google (GOOG, GOOGL) continue to suck up digital ad dollars. BuzzFeed will give Verizon Media a minority stake through the transaction and draw some cash in return, while the companies will syndicate content on each other’s platforms and explore joint advertising opportunities. Many players in the sector have pursued mergers to chart a path forward amid a struggle to develop revenue from subscriptions and e-commerce. In the last year, Vice Media acquired Refinery29, Vox scooped up New York Media and Group Nine acquired PopSugar.
What else is happening…
Gaming platform Roblox files IPO prospectus.
On a tear… S&P 500 inclusion sees Tesla (NASDAQ:TSLA) shares touch $500.
General Motors (NYSE:GM) commits to EV investment, quiet on Nikola (NASDAQ:NKLA).
McAfee (NASDAQ:MCFE) breaks even in first post-IPO print.
Thursday’s Key Earnings
Macy’s (NYSE:M) +2.1% posting a smaller-than-expected loss.
Workday (NASDAQ:WDAY) -4% AH warning of coming COVID-19 effects.
Today’s Economic Calendar
9:00 Fed’s Barkin Speech
9:00 Fed’s Bostic Speech
9:30 Fed’s Kaplan Speech
1:00 PM Baker-Hughes Rig Count
—————
Good morning. Happy Thursday.
The Asian/Pacific markets leaned down. China and Indonesia are up, but Hong Kong, India, Malaysia and the Philippines are up. Europe, Africa and the Middle East are mostly down. Denmark and Turkey are up, but the UK, Poland, France, Germany, Russia, Greece, South Africa, Finland, Norway, Spain, the Netherlands, Belgium, Israel and the Czech Republic are down. Futures in the States point towards a down open for the cash market.
—————
Online Course: Mini Masterclass in Trading
—————
The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
Coronavirus concerns resurface
Vaccine euphoria that helped propel stocks to record highs is wearing off as traders focus on a surge in coronavirus transmission rates in the U.S., where deaths from the illness surpassed 250,000. According to Johns Hopkins University, the number of fatalities has remained above 1,000 a day for eight of the past nine days, a tally that was last seen in late August. Sentiment was particularly dented after New York City shut schools and switched to fully remote learning for its students because of rising cases of COVID-19. U.S. stock index futures fell 0.4% overnight on the news after bouncing around the flat line for most of Wednesday, only to turn south in the final hour of trading. Chances of stimulus from Washington are also dim as lawmakers remain deadlocked over the size of a coronavirus aid package.
Encouraging results for the elderly
Some positive news was still seen overnight after a jab from the University of Oxford, which is working in collaboration with AstraZeneca (NASDAQ:AZN), was shown to have generated a robust immune response in adults in their 60s and 70s. Preliminary results revealed that the vaccine, ChAdOx1 nCoV-19, prompted what’s known as a “T-cell response” within 14 days of the first dose, as well as an antibody response within 28 days of a booster dose.”We hope that this means our vaccine will help to protect some of the most vulnerable people in society,” said Dr. Maheshi Ramasamy, a co-author of the study at the University of Oxford. Phase three trials of the vaccine are still ongoing, with early efficacy readings possible in the coming weeks.
Deliveries before Christmas
With Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) having concluded their Phase 3 study of COVID-19 vaccine candidate, which showed a success rate of 95% and no serious adverse events, the drugmakers might be headed to securing an emergency-use approval next month. “If all goes well I could imagine that we gain approval in the second half of December and start deliveries before Christmas, but really only if all goes positively,” BioNTech CEO Ugur Sahin told Reuters TV. Storage and distribution is still complicated. Pfizer’s (NYSE:PFE) vaccine must be stored frozen at negative 94 degrees Fahrenheit (-70° C), most likely needing dry ice (-109 degrees Fahrenheit) for shipment.
Development deal with TSMC
City officials in Phoenix have unanimously voted to authorize a slate of financial incentives and government support for Taiwan Semiconductor Manufacturing’s (NYSE:TSM) planned $12B chip plant. In May, the company disclosed its intentions to build a 5-nanometer chip factory in Arizona, which would be its first advanced manufacturing facility in the U.S. American lawmakers have been pushing for high-tech manufacturing to address national security concerns over the industry supply chain, and even proposed billions of dollars in subsidies to the sector in June. Not everything has gone as planned. A heavily touted deal by Foxconn (OTC:FXCOF) in Wisconsin back in 2018 still hasn’t fully materialized, and was recently denied tax credits for failing to meet investment and hiring goals.
Virtual APEC summit
President Trump plans to attend a virtual APEC summit on Friday following a similar high-level meeting of Asia-Pacific leaders last week that saw the signing of the Regional Comprehensive Partnership Agreement. Trump’s involvement will mark his first participation in the event since 2017. The following year, a delegation from the U.S. and China failed to agree on a joint communique for the first time in the bloc’s history, given opposing stances on trade and investments. “We will not reverse course or run against the historical trend by decoupling… openness enables a country to move forward, while seclusion holds it back,” China’s Xi Jinping said ahead of the gathering. It’s unclear whether Joe Biden would roll back tariffs on China, but analysts have said the U.S. will likely continue to take a tough stance on Beijing under the new administration.
What’s a studio to do during a pandemic?
Universal (NASDAQ:CMCSA) had explored a direct-to-digital release earlier this year, but ultimately reached a deal with AMC (NYSE:AMC) that saw films hit the box office for three weekends before going online, as well as a truncated theatrical window with Cinemark (NYSE:CNK). Warner Bros. (NYSE:T) is now experimenting with its playbook, announcing that Wonder Woman 1984 would arrive on HBO MAX on Dec. 25, the same day it hits theaters. The decision to keep the coming blockbuster on the 2020 calendar will allow theater chains to make cash off ticket sales and also drive subscriber sign-ups to the streaming service. The first Wonder Woman film had a $100M opening weekend domestically and went on to notch more than $820M at the global box office.
GM gets back in the insurance game
As more vehicles are sold with built-in internet connections, automakers are branching into services that capitalize on the data produced by their systems. General Motors (NYSE:GM) is launching a car-insurance business through its OnStar connected-car service, which will set insurance rates by remotely tracking drivers’ behavior like obeying the speed limit and avoiding sudden stops. GM will begin a pilot this week for its own employees in Arizona and plans to offer it nationwide later in 2021. For much of its history, GM offered insurance to drivers, but ended the business during its 2009 bankruptcy after unloading its GMAC financial-services arm.
Ways to go for Prime Air
Amazon’s (NASDAQ:AMZN) drone project has already been seven years in the making, completing its first delivery in 2016 and receiving U.S. regulatory approval (Part 135 certification) to begin limited testing in August. Now, the unit is laying off dozens of R&D and manufacturing staff as it reached tentative component deals with two external manufacturers – Austria’s FACC Aerospace and Spain’s Aernnova Aerospace, FT reports. Keep in mind that Amazon brought in former Boeing executive David Carbon to run the unit in March, replacing Gur Kimchi, who ran the operation since 2013. According to details released in mid-2019, Prime Air will make use of a hexagon-shaped, fully-electric drone that can fly up to 15 miles and carry packages weighing under five pounds.
What else is happening…
Boeing’s (NYSE:BA) 737 MAX reinstated but will customers fly it?
Delta (NYSE:DAL) to keep middle seats empty until spring.
Starbucks (NASDAQ:SBUX) raises U.S. employee pay by at least 10%.
Apple (NASDAQ:AAPL) slashes App Store tax for smaller developers.
Thursday’s Key Earnings
L Brands (NYSE:LB) +15% AH as comparable sales popped 56%.
Lowe’s (NYSE:LOW) -8.2% on slightly weak profit guidance.
Nvidia (NASDAQ:NVDA) -1.7% AH despite record gaming, data center sales.
Target (NYSE:TGT) +2.8% revealing sizzling digital sales.
TJX Companies (NYSE:TJX) +1.9% driven by HomeGoods strength.
Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
8:30 Fed’s Mester: “Stress, Contagion, and Transmission”
10:00 Leading Indicators
10:00 Existing Home Sales
10:00 E-Commerce Retail Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
12:35 PM Fed’s Bowman: “Stress, Contagion, and Transmission”
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
—————
Good morning. Happy Wednesday.
The Asian/Pacific markets leaned up. Hong Kong, New Zealand, Taiwan, Australia, Thailand and the Philippines led while Japan and India were weak. Europe, Africa and the Middle East are currently mostly up. Poland, France, Turkey, Russia, Greece, South Africa, Finland, Hungary, Italy and the Czech Republic are up the most. Futures in the States point towards a down open for the cash market.
————-
Online Course: Mini Masterclass in Trading
—————
The dollar is flat. Oil up. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
Boeing looks to turn a page
It’s the day Boeing (NYSE:BA) has been waiting for after nearly two years of investigations, corporate upheaval and a standoff with global regulators. FAA Administrator Steve Dickson is expected to sign an order today lifting the flight ban on the 737 MAX – once Boeing’s hottest-selling jet – as well as an airworthiness directive requiring new pilot training and software upgrades. A stall-prevention system called MCAS was faulted in the 737 MAX crashes in Indonesia and Ethiopia that killed 346 people in 2018/2019 and triggered a crisis that cost Boeing some $20B and tarnished its reputation. Resuming deliveries will open up a crucial pipeline of cash for Boeing and hundreds of parts suppliers whose finances were strained because of the ban. When it does fly again, Boeing will also run a 24-hour war room to monitor all MAX flights for issues that could impact the jet’s return.
What’s next?
The role of the FAA went under the microscope during the Boeing (BA) crisis, and the House just unanimously passed a bill to reform how the FAA certifies airplanes (a Senate panel is taking up a similar bill today). The U.S. planemaker won’t be allowed to sign off on the airworthiness of some 450 already-built 737 MAXs, meaning in-person, individual inspections could take a year or more to complete. Anticipating FAA approval, American Airlines (NASDAQ:AAL) plans to relaunch commercial MAX flights on Dec. 29, while Southwest Airlines (NYSE:LUV), the world’s largest MAX operator, does not plan to fly the aircraft until Q2 of 2021. Foreign regulators in Europe, Brazil and China also must issue their own approvals after independent reviews, while Boeing still faces strong headwinds like a resurgent coronavirus pandemic and new European tariffs. BA +4.2% premarket.
Bitcoin takes out $18,000
“If you had told me three years ago the U.S. was going to print a trillion dollars in one month, I would have said 1,000 to 1 against,” said Dan Morehead, the CEO of Pantera Capital, and an early Bitcoin (BTC-USD) investor. “It just happened… I think it’s going to melt up” – meaning good times are ahead for things you can’t “quantitatively ease.” Bitcoin’s all-time high hit in 2017 was about $20K, but oft-forgotten about the 2017 mania was how little time the crypto actually spent above $10K – literally a handful of days. The distinguishing feature of this year’s move is its relative (at least until very recently) stability. Bitcoin has been above $10K since mid-summer.
Retail in focus
U.S. equities took a pause on Tuesday, retreating from record highs after an injection of vaccine optimism, though the pullback may prove temporary as futures rose 0.3% overnight. The mood had dimmed on Tuesday as investors focused on the surging number of COVID-19 infections (and possible lockdowns), while U.S. retail sales rose 0.3% during October, the smallest increase since the recovery took off in May. More retail data will be seen today as Target (NYSE:TGT), Lowe’s (NYSE:LOW) and TJX Companies (NYSE:TJX) report quarterly results before the opening bell. L Brands (NYSE:L) will report after the close, along with chipmaker Nvidia (NASDAQ:NVDA).
Shelton stays on the sidelines
Senate Republicans have failed to secure enough votes to advance the confirmation of Judy Shelton to the FOMC as the upper chamber voted 50-47 against a move that would have advanced the nomination by limiting debate. She’s a controversial pick given her long history of unorthodox economic commentary, like questioning the basic role of the Fed and advocating a return to the gold standard. While the GOP was left short of the votes needed due to senators that entered quarantine, Majority Leader Mitch McConnell switched his vote to “No” in a tactical decision that would allow him to bring the nomination up for reconsideration. Not much time remains, however, as Republicans will lose a seat in the Senate when Arizona Democrat Mark Kelly takes Martha McSally’s place after Thanksgiving.
Moderation transparency
Congress sought to put a warning label on Big Tech yesterday as lawmakers grilled Twitter’s (NYSE:TWTR) Jack Dorsey and Facebook’s (NASDAQ:FB) Mark Zuckerberg. Republican concerns centered around how the platforms moderate their content, narrowing in on censorship and the ideological makeup of their work forces, while Democrats focused on whether more moderation could help prevent the spread of hate speech and violence. What the two sides appeared to agree on was that Facebook and Twitter have enforced their policies inconsistently, and often don’t explain the steps they have taken. The two tech leaders agreed that reform around how content is moderated should be revisited, with Zuckerberg welcoming a new regulatory moderation framework and Dorsey hoping to give users more tools to control the content they see.
Some public attention
Robinhood (RBNHD) has requested IPO pitches from investment banks, according to Bloomberg, as it aims to go public as soon as the first quarter of 2021. At its most recent funding round in September, Robinhood raised $460M at an $11.7B valuation. It follows a huge year for the platform, which in many ways is a symbol of the work-from-home bull market (accounts at Robinhood are up to 13M). Its targeting of millennials and Gen-Z traders has also increasingly drawn the attention of other brokers like TD Ameritrade (NASDAQ:AMTD), Interactive Brokers (NASDAQ:IBKR), Charles Schwab (NYSE:SCHW) and E-Trade (NASDAQ:ETFC).
DIY testing
The FDA has issued an emergency use authorization to the single-use COVID-19 diagnostic test kit from Lucira Health, a privately-held manufacturer based in California. The test (prescription use only) allows users age 14 and older to swab themselves to collect a nasal sample, which is then swirled in a vial of laboratory solution that plugs into a portable device. Results are displayed in 30 minutes as lights labeled positive or negative. While the FDA did not reveal the price of the test, the company’s website said it is “intended to cost less than $50.”
#Plantbased
Unilever (UL, UN) is attempting to expand its annual sales of plant-based meat and dairy alternatives to €1B by 2027, marking a five-fold increase to what the company expects to sell this year. Sales would be driven by new products from The Vegetarian Butcher, a Dutch brand it acquired in 2018, as well as vegan and dairy-free versions of its ice cream and mayo ranges from Ben & Jerry’s, Hellmann’s, Magnum and Wall’s. If multinationals continue to push into this area, industry experts think plant-based products would get cheaper and the market would consolidate. Last month, the European Parliament also ruled that meatless products can continue to label themselves sausages, steaks or burgers, rejecting a meat lobby proposal that called the terms “cultural hijacking.”
What else is happening…
Twitter (TWTR) expands disappearing-content with new ‘Fleets’ feature.
Goldman (NYSE:GS) is plotting a second round of job cuts – Bloomberg.
Labor unrest may have GM (NYSE:GM) pull out of South Korea.
Vale (NYSE:VALE) ends meeting without dam disaster settlement.
Wednesday’s Key Earnings
Home Depot (NYSE:HD) -2.5% despite Q3 beat, U.S. comp rising 24.1%.
Kohl’s (NYSE:KSS) +11.6% on confident look, dividend plan.
NIO (NYSE:NIO) -1.9% AH in spite of record deliveries, upside outlook.
Walmart (NYSE:WMT) -2% falling back after climbing on robust e-commerce.
Today’s Markets
7:00 MBA Mortgage Applications
8:30 Housing Starts and Permits
10:00 Fed’s Evans Speech
10:00 Quarterly Services Report
10:30 EIA Petroleum Inventories
12:15 PM Fed’s Williams Speech
1:00 PM Results of $27B, 20-Year Bond Auction
1:20 PM Fed’s Bullard: U.S. Economy and Monetary Policy
6:00 PM Fed’s Kaplan Speech
6:00 PM Fed’s Bostic Speech
—————
Good morning. Happy Tuesday.
The Asian/Pacific markets leaned up. India, Malaysia, Indonesia, Singapore and the Philippines did well; China and Hong Kong were weak. Europe, Africa and the Middle East currently lean down. The UK, Turkey, Russia, Spain and Portugal are posting the biggest losses. Futures in the States point towards a moderate down open for the cash market.
—————
Online Course: Mini Masterclass in Trading
—————
The dollar is down. Oil and copper are down. Gold is flat; silver is down. Bonds are up.
Stories/News from Seeking Alpha…
Amazon expands retail empire with pharmacy
With Americans increasingly relying on getting their medicines via mail to avoid getting exposed to COVID-19, Amazon (NASDAQ:AMZN) is getting into the pharmacy business. How will it work? Doctors can send prescriptions directly to Amazon Pharmacy – which has tools to verify that a physician legitimately ordered each prescription – or patients can request a transfer from existing retailers. Amazon Prime customers will get free two-day delivery, while others can get free delivery within five days or pay $5.99 to upgrade to two-day delivery. The move had been anticipated for quite a while, given the many reported internal discussions and acquisition of PillPack in 2018, but the latest news is likely to shake CVS (NYSE:CVS), Walmart (NYSE:WMT), Rite Aid (NYSE:RAD) and Walgreens (NASDAQ:WBA).
Plenty of reasons for Musk to dance
Tesla (NASDAQ:TSLA) bulls are taking a victory lap after the EV automaker landed inclusion on the S&P 500 Index. “We believe the sustained profitability trajectory as evidenced in the September quarter was the final straw that got Musk & Co. into the S&P 500 this time around despite all the noise around tax credit boosts on the Street,” writes analyst Dan Ives, calling the development a clear positive for shares. Investors seem to agree, with TSLA shares soaring 13% AH and tacking on nearly another $50B in market capitalization. It’s massive: Due to the size of the addition, the S&P 500 Index Committee is seeking feedback on whether Tesla should be added all at once on the rebalance effective date or in two separate tranches.
Airbnb files to go public
The pandemic has been extremely damaging to Airbnb’s business, as well as the whole travel industry, but the vacation rental company still managed to eke out a profit last quarter of $219M. An S-1 filing (IPO prospectus) put an emphasis on building a community around its hosts and guests, as well as positioning that community as a differentiating factor from its competitors. COVID-19 is still going to make or break Airbnb over the next year, but the company is talking up the benefits of short-distance travel and long-term stays. It plans to trade on the Nasdaq under ticker “ABNB” and is seeking up to $1B in the listing (but that could just be a placeholder figure).
All-time highs
A minor pullback was seen overnight following a bumper session for U.S. stocks amid another set of upbeat results from Moderna’s (NASDAQ:MRNA) COVID-19 vaccine trials. Dow and S&P 500 futures dipped 0.3%, while the Nasdaq rose 0.3% as Tesla (TSLA) soared on news that it would finally be added to the S&P 500 index. “Rotation” is still a word that’s being tossed around on the Street, though it may be more like “catch-up,” with so much money sitting on the sidelines. High-flying tech companies rose yesterday along with banks, retail, energy and travel, albeit with smaller gains, while the Dow Jones Industrial Average clinched its first all-time high since February, representing the fastest rebound from a bear market low since 1991 (193 trading days).
Retail tsunami
While the Q3 earnings season is nearing an end, retail will light up the scoreboard this week, with investors keen on some figures and forecasts before the holiday season. Strong online demand is likely to have supported Walmart (WMT) when it reports results this morning, while Home Depot (NYSE:HD) is poised to see the effects of robust demand for goods as consumers spent more time at home. That story is likely to play out at Lowe’s (NYSE:LOW) and Target (NYSE:TGT) – which report tomorrow – though a decline in foot traffic at Macy’s (NYSE:M) could hit the retailer’s sales on Thursday. Don’t forget the latest U.S. retail sales report, which is also set to be published this morning. It’s expected to increase for the sixth straight month due to steady job creation, a shift toward tangible goods and early holiday promotions.
Tech vs. Congress
It’s only been three weeks since Facebook’s (NASDAQ:FB) Mark Zuckerberg and Twitter’s (NYSE:TWTR) Jack Dorsey testified in Congress, but the two executives are heading under the spotlight again this morning. In this round, the Senate Judiciary Committee will press the tech titans on “Censorship, Suppression, and the 2020 Election” in what’s likely to be another multi-hour hearing of assorted grievances. The last hearing, by the Senate Commerce Committee, was about reforming Section 230 of the Communications Decency Act, but the pressing policy issue barely came up and morphed into ongoing complaints about bias on the platforms. Things may get hotter this time around as it’s the first grilling of social media leaders since the election, with President Trump continuing to make claims of voter fraud to contest Joe Biden’s victory.
Vaccine shelf life
More vaccine hopes were seen on Monday after Moderna (MRNA) announced its COVID-19 vaccine was nearly 95% effective in preventing the disease in patients from its late-stage trials. It’s just a week after Pfizer (PFE) and BioNTech (NASDAQ:BNTX) reported similar results with their vaccine. Big difference: Moderna’s candidate remains stable at 2° to 8°C (36° to 46°F), the temperature of a standard home or medical refrigerator, for 30 days, which could help concerns expressed over storage and distribution. Pfizer’s (NYSE:PFE) vaccine must be stored frozen at negative 94 degrees Fahrenheit (-70° C), most likely needing dry ice (-109 degrees Fahrenheit) for shipment.
Tougher coronavirus restrictions
Thanksgiving turkey with the extended family may end up in the deep fryer this year as governors and local leaders across the country imposed fresh measures to slow the spread of surging coronavirus infections. In New Jersey, Governor Phil Murphy announced stricter capacity restrictions for both indoor and outdoor gatherings, while the city of Philadelphia banned “indoor gatherings of any size in any location, public or private.” Similar messages (and some mask mandates) were delivered in Michigan, Washington, North Dakota, Ohio and Iowa, while California took it a step further, ordering many non-essential businesses to close in 41 out of the state’s 58 counties. Talks on federal pandemic relief legislation have been stalled for months and still show no signs of budging in Congress.
What else is happening…
Berkshire Hathaway (BRK.A, BRK.B) loads up on pharma, trims bank holdings.
Costco (NASDAQ:COST) fires off $10 per share special dividend.
NXP (NASDAQ:NXPI) partners with Amazon (AMZN) on connected cars.
Wirecard (OTCPK:WCAGY) offloads core European business to Santander (NYSE:SAN).
Alexa (AMZN) now predicts user requests before they are even asked.
Hulu (NYSE:DIS) raises Live TV price again, up 18% to $64.99/month.
Wednesday’s Key Earnings
Baidu (NASDAQ:BIDU) +1.9% announcing deal for JOYY China streaming.
JD.com (NASDAQ:JD) -7.4% despite Q3 beats with 29% revenue growth.
Today’s Economic Calendar
8:30 Retail Sales
8:30 Import/Export Prices
8:55 Redbook Chain Store Sales
9:15 Industrial Production
10:00 Business Inventories
10:00 NAHB Housing Market Index
1:00 PM Fed’s Bostic Speech
1:25 PM Fed’s Daly Speech
2:00 PM Fed’s Williams Speech
2:35 PM Fed’s Daly Speech
2:35 PM Fed’s Bostic Speech
2:35 PM Fed’s Rosengren Speech
2:50 PM Fed’s Daly Speech
2:50 PM Fed’s Rosengren Speech
3:00 PM Fed’s Barkin Speech
4:00 PM Treasury International Capital
—————
Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets posted solid gains. Japan, China, South Korea, Hong Kong, Taiwan, Australia and Singapore all rallied 1% or more. Europe, Africa and the Middle East are currently posting big gains. The UK, Poland, France, Germany, the UAE, Russia, Greece, Finland, Norway, Spain, the Netherlands, Italy, Austria, Sweden and the Czech Republic are each up 1% or more. Futures in the States are split – S&P up, Nasdaq down.
—————
Online Course: Mini Masterclass in Trading
—————
The dollar is flat. Oil and copper are up. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
Largest trade deal ever
Fifteen countries that make up nearly a third of the world’s population and gross domestic product formed the world’s biggest trading bloc over the weekend. The Regional Comprehensive Economic Partnership, or RCEP, was signed by China, Japan, South Korea, Australia, New Zealand and the 10 ASEAN member countries, wrapping up eight years of negotiations before the next U.S. administration comes into office. The deal aims to strengthen supply chains with common rules of origin, reduce tariffs and codify new e-commerce laws. Bigger picture: Beijing has specifically looked to RCEP as an opportunity to write regional rules and diversify its avenues of trade amid declining economic relations with the U.S. after it pulled out of the Trans-Pacific Partnership in 2017 and engaged in a broader tariff war.
Analysts size up RCEP
“The diplomatic messaging of RCEP may be just as important as the economics – a coup for China,” wrote analysts from Citi Research, though others are more skeptical, saying the deal was much weaker than TPP. Tariffs among many RCEP member countries are already low given existing bilateral or smaller multilateral trade agreements. Example: More than 70% of trade among the 10 ASEAN countries are conducted with zero tariffs, while additional tariff reductions under RCEP “will only come into force gradually, and it will be years before the treaty is fully operational,” said Gareth Leather, senior Asia economist at consultancy Capital Economics.
Rally goes on
Traders are once again shaking off fears about rising coronavirus cases after Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) last week announced strong results for their COVID-19 vaccine. Dow futures are ahead by 1%, while contracts tied to the S&P 500 and Nasdaq are up 0.9% and 0.6%, respectively, building on a recent rotation into value stocks. Expectations are high that Moderna (NASDAQ:MRNA) will report a similar performance for its coronavirus vaccine, which also uses mRNA technology, perhaps as early as today. An average of nearly 150,000 new daily infections have been recorded in the U.S. over the past week, while deaths approached 250,000 as of Sunday, according to data from Johns Hopkins.
National lockdown unlikely under Biden
A clearer picture is emerging of how a Biden administration will handle the coronavirus as more advisors from his task force weigh in on the pandemic. Vivek Murthy, a former U.S. surgeon general and one of three leaders of the task force, as well as Atul Gawande, a senior adviser in the Department of Health and Human Services in the Clinton administration and medical writer, say they favor targeted local measures to stem the pandemic rather than a nationwide lockdown. Biden’s coronavirus team will also meet with leading drugmakers developing coronavirus vaccines this week to discuss the “mechanics of manufacture and distribution.”
Trump TV?
Newsmax Media is not actively looking to sell itself, CEO Christopher Ruddy told Variety, following a WSJ report that said Trump allies were targeting a buyout to rival Fox News (NASDAQ:FOX). “Newsmax would never become ‘Trump TV,'” he said during the interview. “We have always seen ourselves as an independent news agency, and we want to continue with that mission. But we are open – [Trump] is going to be a political and media force after he leaves the White House, and we would be open to talking to him about a weekly show.” Trump has tweeted his displeasure with Fox about “calling Arizona early” in the recent presidential election and has reportedly told friends he wants to “wreck” the network.
SpaceX makes history
Fresh off of receiving certification for human travel, Elon Musk’s SpaceX (SPACE) launched four astronauts into orbit Sunday evening, marking the beginning of regularly scheduled commercial flights to the International Space Station. Everything appeared to go as planned, with the first-stage rocket booster successfully landing in a sea-borne droneship and the Crew Dragon capsule expected to link up with the ISS tonight. SpaceX launches are projected to cost NASA about 40% less on a per astronaut basis than Russian Soyuz missions, freeing up agency funds to explore deeper into the solar system.
Bringing batteries in-house
Some jolting news has arrived out of Detroit after Ford (NYSE:F) CEO Jim Farley made it clear the company is now interested in making its own electric batteries, instead of relying on third-party suppliers. “Absolutely, we’re discussing it as a team… We think that it’s a natural time now because our volume is really growing,” Farley declared, nearly two months after Tesla (NASDAQ:TSLA) held its Battery Day with promises of new breakthroughs. Ford is set to release its all-electric Mustang Mach-E very shortly, to be followed by the electric Transit commercial van next year and an all-electric version of its flagship F-150 pickup in 2022.
Walmart throws in the towel on Japan
Walmart (NYSE:WMT) first entered the Japanese market in 2002 by buying a 6% stake in Japanese supermarket chain Seiyu, and gradually built up its stake before a full takeover in 2008, but things didn’t go exactly as planned. The retailer has had a tough time in the country like foreign entrants such as Tesco (OTCQX:TSCDY) and Carrefour (OTCPK:CRRFY), which were lured by the high spending power of the Japanese consumers but were hit by stiff competition. Struggling to make money, Walmart is selling a majority stake (65%) in Seiyu to investment firm KKR (NYSE:KKR) and (20% stake) to e-commerce company Rakuten (OTCPK:RKUNF) for a total of $1B. The deal is the latest divestiture of underperforming assets by Walmart, following its exits in Britain, Argentina and Brazil.
Algos to maintain meat output
Back in April, widespread coronavirus outbreaks among employees in the U.S. meatpacking industry forced companies and others to shut dozens of plants across the country. More than 16,000 workers were infected and 86 died, according to the CDC, while farmers had to euthanize tens of thousands of animals and some supermarkets had to ration meat purchases. The response: Besides spending heavily on protective gear and redesigning workstations, companies like Tyson (NYSE:TSN) are using infection-tracking algorithms and ongoing employee testing. The system compares positive employee tests with where they work in the plants, along with publicly reported infection rates in the counties and towns around its 241 U.S. processing facilities. “We can dial up the algorithm when we sense there’s something going on in the community, and we’re much more prepared for a second wave,” said CEO Dean Banks.
What else is happening…
Walmart (WMT) resumes metering customers in stores.
Wall Street bonuses likely to be smaller this year.
PNC (NYSE:PNC) to acquire U.S. arm of Spain’s BBVA for $11.6B.
Mall owners Simon (NYSE:SPG) and Taubman (NYSE:TCO) revise merger terms.
Ant valuation likely cut in half, IPO at least six months away – China ETF issuer
Today’s Economic Calendar
8:30 Empire State Mfg Survey
1:45 PM Fed’s Daly Speech
2:00 PM Fed’s Clarida: U.S. Economy and Monetary Policy
—————