Daily Market Report | Jan. 12, 2021

S&P 500, Dow Industrials Wobble – Wall Street Journal, 1/12/2021

  • U.S. stocks wobbled between small gains and losses Tuesday, while Treasury yields rose for a seventh consecutive session on expectations of increased government spending.
  • Investors broadly expect stocks to rally this year as the rollout of vaccines and fresh government spending help the economy recover from the disruption caused by the pandemic.
  • Still, some are bracing for volatility in the coming months amid risks stemming from high valuations in parts of the stock market, still-elevated coronavirus case rates and political uncertainty following last week’s attack on the Capitol.
  • In the coming days, money managers will parse quarterly results as earnings season gets under way among U.S. companies. Home builder KB Home is due to report after markets close.
  • Other companies set to report results later this week include Delta Air Lines and JPMorgan Chase.
  • In Washington, Congress careened toward a fresh showdown with President Trump. House Democrats said they plan to vote on impeaching him Wednesday over accusations he incited supporters to storm the U.S. Capitol.
  • Expectations of higher government spending and more bond sales continued to drive a selloff in U.S. government bonds, pushing the yield on 10-year Treasury notes up to 1.172%, from 1.131% Monday.
  • The move put yields on course to rise for a seventh consecutive trading session.
  • Yields move in the opposite direction of bond prices.
  • Overseas, the Stoxx Europe 600 index gained 0.1%. Most major Asian equity benchmarks ended the day higher. The Shanghai Composite gained 2.2%, while Hong Kong’s Hang Seng advanced 1.3%.

Coronavirus Live Updates: U.S. Daily Cases Dip but Stay Above 200,000 – Wall Street Journal, 1/12/2021

  • The number of newly reported coronavirus cases in the U.S. edged down, but remained above 200,000 for the seventh day in a row.
  • The U.S. reported more than 204,000 new coronavirus cases for Monday, according to data compiled by Johns Hopkins University, a decline of more than 10,000 cases from the previous day and sharply lower than the daily totals at the end of last week.
  • The number of people hospitalized in the U.S. due to Covid-19 was slightly higher than the total a day earlier, with 129,748 patients in hospitals, according to the Covid Tracking Project.
  • The number of patients in ICUs across the country topped 23,000 for the 13th day in a row Monday, according to the Covid Tracking Project.
  • The nation’s death toll from Covid-19 surpassed 376,000, as the country reported more than 1,700 deaths due to the disease on Monday, according to Johns Hopkins data.
  • Governments across Europe are weighing stricter Covid-19 lockdown measures, with police in London warning that rule-breakers are now more likely to be fined to deter people from gathering in parks or other public spaces.
  • In Germany, anticipation is growing that Chancellor Angela Merkel and state leaders may agree to extend a lockdown which was imposed over the Christmas and New Year period. It has already been extended until the end of January to buy time for the country’s vaccination program, over concerns that the more-easily transmissible variant of the virus first detected in Britain may lead to a spike in cases in Germany too.
  • The latest figures from the Robert Koch Institute for infectious diseases Tuesday reported nearly 13,000 new infections and 891 additional deaths.

AstraZeneca Applies for European Clearance of Covid-19 Vaccine – Wall Street Journal, 1/12/2021

  • AstraZeneca has applied for emergency-use authorization in Europe of the Covid-19 vaccine it developed with the University of Oxford, a step toward the rollout of more shots across the region as infections and hospitalizations rise.
  • The European Union’s drug regulator said Tuesday it could authorize the vaccine as soon as Jan. 29 after completing a review of clinical-trial data.
  • That timeline eventually could add 400 million doses to Europe’s vaccine arsenal as the region battles a deadly winter surge of the virus, exacerbated by the spread of a variant first discovered in the U.K.
  • The EU has preordered 300 million doses of the Oxford-AstraZeneca vaccine, with an option for 100 million more.
  • The U.K.’s medicines regulator has said the Oxford-AstraZeneca vaccine is about 70% effective at three weeks after the first dose and stretching to the time of the second dose, even if that is around about 12 weeks later.

Albertsons Reports Strong Grocery Sales Growth Amid Pandemic – Wall Street Journal, 1/12/2021

  • Albertsons reported stronger sales growth than some rival food sellers as consumers continue to buy more groceries than usual during the coronavirus pandemic.
  • Boise, Idaho-based Albertsons said sales at stores open at least 15 months, excluding fuel, rose 12.3% for the quarter ended Dec. 5.
  • While the sales growth reflected a slight decline from the prior quarter, when the company posted a 13.8% increase, it beat expectations and was higher than sales growth at other grocers such as Kroger and Walmart.
  • Albertsons said digital sales more than tripled and that it has accelerated its rollout of pickup services.
  • Albertsons, the nation’s second-biggest grocer, generated $124 million in profit, partly as costs associated with the pandemic continued to rise, and missed expectations.
  • The company updated its outlook for fiscal 2020. It is expecting same-store sales growth of 16.5% and adjusted earnings of $3.05 to $3.15 a share. The company also announced a dividend payment.

Zoom Aims to Raise $1.5 Billion Through Stock Offering – Wall Street Journal, 1/12/2021

  • Zoom plans to raise $1.5 billion through what would be its largest stock offering since its trading debut in 2019.
  • The San Jose, Calif.-based company, whose videoconferencing platform has become a pandemic essential, on Tuesday said it expects to grant its underwriter a 30-day option to buy up to an additional $225 million of Class A shares at the public offering price, less underwriting discounts and commissions.
  • Zoom’s global boost in popularity has put it at the center of a rivalry among technology companies pushing their services for managing daily life during the pandemic, pitting it against far larger rivals such as Microsoft and Facebook.

Google Sued by YouTube Rival Over Search Rankings – Wall Street Journal, 1/12/2021

  • Video-sharing site Rumble accused Google in a lawsuit of abusing the power of its search engine and mobile operating system to boost its YouTube video service over rivals, the latest allegation of anticompetitive conduct against the Alphabet unit.
  • Toronto-based Rumble, which has become popular among conservative pundits, on Monday filed an antitrust suit in federal court in California arguing that Google is “unfairly rigging its search algorithms” to place YouTube above Rumble in its search results.
  • The lawsuit also argues that Google’s deals to pre-install a YouTube app on mobile devices running Google’s Android operating system have unfairly deprived Rumble of viewers.
  • Rumble’s lawsuit cites the findings of a Wall Street Journal investigation from July that found Google’s search results gave a preference to YouTube links over those from video rivals.

Parler Sues Amazon After Tech Giant Kicks Site Off Its Servers – Wall Street Journal, 1/12/2021

  • Social-media platform Parler has sued Amazon.com after the tech giant abruptly ended web-hosting services to the company, effectively halting its operation.
  • In a complaint filed Monday in Seattle federal court, Parler alleged that Amazon Web Services kicked the company off its cloud servers for political and anti-competitive reasons.
  • “AWS’s decision to effectively terminate Parler’s account is apparently motivated by political animus.
  • It is also apparently designed to reduce competition in the microblogging services market to the benefit of Twitter,” according to the complaint, which also accused Amazon of breaching a contract between the parties.
  • Amazon said Saturday that it would cut off Parler because it wasn’t confident in its ability to sufficiently police content on its platform that incites violence.

PC Sales Notch Strongest Growth in a Decade – Wall Street Journal, 1/12/2021

  • Personal computer sales last year registered their strongest growth in a decade, underscoring a shift to computers from mobile devices during the coronavirus pandemic, according to industry data.
  • IDC counted 302.6 million units sold globally last year, up 13% from the previous year.
  • Research firm Gartner said PC shipments reached 275 million units in 2020, up 4.8% on the year.
  • Similarly, Canalys pegged the increase at 11% to 297 million units, the highest annual growth since 2010 and the highest shipment volume since 2014.
  • IDC said fourth-quarter sales rose 26% to 91.6 million units; Gartner said sales rose nearly 11% to 79.4 million units; and Canalys pegged growth at 25% to 90.3 million units.
  • Chromebook shipments reached 11.7 million units in the fourth quarter alone, according to preliminary data from Gartner.
  • For the year, the firm said Chromebook shipments increased by more than 80% to nearly 30 million units, driven by the North American education market.

GM to launch BrightDrop electric delivery vehicle business – Reuters, 1/12/2021

  • General Motors staked its claim in the growing electric delivery vehicle business on Tuesday, with Chief Executive Mary Barra outlining plans for its first BrightDrop commercial vans to be delivered to FedEx by year-end.
  • The move will put GM squarely in competition in the commercial sector with cross-town rival Ford Motor, as well as startups such as Rivian, Arrival and Canoo that are developing electric commercial vehicles for customers ranging from Amazon to Hyundai Motor.
  • Fueled in part by the COVID-19 pandemic, GM estimates the U.S. market for parcel and food delivery will climb to more than $850 billion by 2025. It is one sector that EV sales leader Tesla has yet to crack.
  • Barra said BrightDrop will offer delivery and logistics customers such as FedEx a range of products and services that leverage the automaker’s expertise in electrification and fleet management.

Airline traffic and bookings stall despite vaccine promise – Reuters, 1/12/2021

  • Airlines face a challenging wait for COVID-19 vaccines to end travel lockdowns, global industry body IATA said, as a recovery in traffic stalls and bookings dry up amid a resurgence of virus outbreaks and restrictions.
  • “We’ve seen some deterioration in bookings globally from the fourth quarter which was already looking weak,” Brian Pearce, chief economist at the International Air Transport Association, said during an online presentation on Tuesday.

US ECONOMY & POLITICS

U.S. job openings fall in November; layoffs rise – Reuters, 1/12/2021

  • U.S. job openings fell in November, while layoffs mounted at restaurants and hotels amid rampant COVID-19 infections, supporting views that the labor market recovery from the pandemic was stalling.
  • Job openings, a measure of labor demand, dropped 105,000 to 6.527 million on the last day of November, the Labor Department said on Tuesday in its monthly Job Openings and Labor Turnover Survey, or JOLTS.
  • Vacancies have dropped from as high as 7.012 million in January.
  • The job openings rate slipped to 4.4% from 4.5% in October.
  • Layoffs increased 295,000 to nearly 2.0 million.
  • That lifted the layoffs rate to 1.4% from 1.2% in October

U.S. Job Postings End 2020 Well Below Pre-Pandemic Levels – Wall Street Journal, 1/12/2021

  • The number of help-wanted ads increased more slowly in December, evidence the labor market is losing momentum amid rising coronavirus cases.
  • Available jobs posted online were down 10.6% at the end of December from a year earlier, according to job search site Indeed’s measure of job posting trends.
  • Postings rose from the end of November, when the number of available jobs were 11.8% below 2019’s trend, but the pace of improvement has eased since the summer, when businesses started to reopen after spring lockdowns.
  • Openings in hospitality and tourism fell at the end of last month and were down about 47% year-over-year.

Republicans Weigh Trump Censure, Impeachment – Wall Street Journal, 1/12/2021

  • House Republicans wrestled with how to respond to accusations that President Trump incited last week’s violence at the U.S. Capitol, with some proposing censure and others open to Democrats’ move to impeach the president for the second time.
  • The first test of GOP sentiment will come Tuesday night, when a handful of Republicans who have said Mr. Trump is no longer fit to serve could join Democrats in supporting a resolution demanding that Vice President Mike Pence and the cabinet invoke the 25th Amendment to remove Mr. Trump from office.
  • If Mr. Pence doesn’t act, Democrats have said they would move forward with an impeachment vote Wednesday, and would have enough votes even without GOP support.
  • Facing these pressures, House Minority Leader Kevin McCarthy (R., Calif.) outlined a slate of options under consideration by House Republicans on Monday that included a resolution of censure for the president.
  • In addition to censure, Republicans have discussed a bipartisan commission investigating the circumstances of last Wednesday’s violence and changes to the process of certifying states’ electoral votes, said Mr. McCarthy, long a close ally of the president.

EUROPE & WORLD

U.K. Hospitals Brace for Covid-19 Pandemic’s Worst Weeks – Wall Street Journal, 1/12/2021

  • Britain’s National Health Service is bracing for the worst weeks of the pandemic as a new, more-contagious form of the coronavirus rips through the country and places hospitals under more extreme stress than in the spring.
  • There are now more people in the hospital than in any phase of the pandemic last April, with 32,300 Covid-19 patients hospitalized at present compared with around 21,700 in the spring.
  • The situation is particularly dire in London, where one in 30 people were estimated to have the virus this month.
  • A combination of a more infectious version of the virus, less compliance with social-distancing restrictions and changing hospital procedures have created a storm for the state-run health service as it tries to weather a surge of Covid-19 infections.

BMW sales fall 8.4% in 2020 as coronavirus takes toll – Reuters, 1/12/2021

  • BMW said it saw an 8.4% drop in vehicles sales in 2020 as the outbreak of coronavirus took its toll and many retail outlets around the world were closed for months.
  • However, customer demand picked up in the fourth quarter, rising 3.2% year-on-year, BMW said on Tuesday.
  • In total, the Munich-headquartered company sold 2,324,809 vehicles last year.
  • In Europe, 2020 sales were down 15.7% and in the United States 18%.
  • In China, where the pandemic started and where it was brought under control faster than elsewhere, 2020 sales bucked the trend and increased 7.4%.

Volkswagen brand 2020 sales drop but recovery seen in December – Reuters, 1/12/2021

  • German carmaker Volkswagen said on Tuesday that sales of its core brand dropped by 15% to 5.3 million vehicles in 2020 as the outbreak of coronavirus and lockdowns imposed to restrict infections hit car dealerships around the world.
  • Volkswagen said it had seen sales recovering in December compared to previous months, rising by 19.5% in western Europe and 14.7% in North America.
  • It added that demand for its electric models jumped by 158% on the year, to 212,000 vehicles.
  • For the year as a whole, Volkswagen brand sales fell by 23.4% in western Europe and by 17.1% in North America, while the smallest drop was in China, at 9.9%.

Lamborghini 2020 deliveries drop 9% on COVID hit, order book “robust” – Reuters, 1/12/2021

  • Automobili Lamborghini deliveries dropped 9% to 7,430 cars in 2020, the Italian sportscar maker said in a statement on Tuesday, after a 70-day coronavirus-related production shutdown dented shipments in the first half of the year.
  • The United States remain the company’s top market, with 2,224 Lamborghinis delivered there last year, while the Urus SUV was its most successful model, with 4,391 cars shipped.
  • Lamborghini, owned by Germany’s Volkswagen, said sales in the later part of the year rebounded to mark the best second half in the company’s history in terms of deliveries to customers.
  • The luxury carmaker added its order portfolio was “robust”, covering more than half of the company’s production capacity planned for 2021.

VW’s Skoda says deliveries fell 19% in 2020, biggest hit in China – Reuters, 1/12/2021

  • Global deliveries by Volkswagen’s Skoda Auto fell 19.1% to 1.005 million vehicles in 2020, hit by the COVID-19 pandemic which caused production outages and closures of dealerships, the Czech carmaker said on Tuesday.
  • The carmaker delivered more than 1 million vehicles for the seventh year running but suffered like many peers as the pandemic hit output and sales, largely in the second quarter.
  • The company saw its biggest drop in China, its largest single market, where deliveries fell 38.7% in 2020, shrinking for a second straight year.
  • In Europe, Skoda said its market share increased to 5.4%.

Renault says sales fell 21% in 2020, but turnaround on track – Reuters, 1/12/2021

  • French automaker Renault said on Tuesday its worldwide sales fell by 21.3% last year, underperforming a decline in the global automotive market triggered by the COVID-19 pandemic and a slowdown in world economies.
  • The company said global total sales last year stood at 2.949 million vehicles. The fall in Renault sales in Europe was 25.8 %, slightly under-performing the wider European auto market.
  • But sales of electric vehicles in the region were strong, rising 101.4% from 2019 to 115,888.

Factmonster – TODAY in HISTORY

  • The U.S. House of Representatives rejected a proposal to give women the right to vote. (1915)
  • One month after Zanzibar became independent, the ruling Zanzibar Nationalist Party was overthrown in a violent coup. (1964)
  • A divided Congress gave President Bush the go-ahead on the Persian Gulf War. (1991)

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