Stocks, Bond Yields Rise to End Week – Wall Street Journal, 2/19/2021

• An increasingly optimistic outlook on the U.S. economy led investors to dump government bonds and pile into economically sensitive sectors of the stock market on Friday.
• JPMorgan Chase strategists said Friday that they expect consumers to shatter expectations for the rest of the year given expected fiscal stimulus and economic reopening as the pandemic eases.
• Meanwhile, Federal Reserve Bank of Boston President Eric Rosengren said he expects the economy to pick up steam this year as vaccines as distributed.
• This optimistic outlook led investors to ditch Treasurys and pile into economically sensitive sectors like financials and energy on Friday, leading those sectors to outperform their peers.
• The Russell 2000 index of small stocks advanced 1.6%, surpassing the slim gains of other major indexes.
• Oil prices pulled back after U.S. diplomats said Thursday evening that they may meet with Iran officials for nuclear talks in the coming weeks, prompting speculation that a deal could allow Iran to begin exporting more crude.
• Brent crude declined 1.5% to $62.99 a barrel and the U.S. benchmark, West Texas Intermediate, fell 1.9% to $59.36.
• In Asia, major stock benchmarks were mixed. The Shanghai Composite Index closed up 0.6%, while Japan’s Nikkei 225 retreated 0.7%.

Covid-19 Live Updates: U.S. Hospitalizations Continue to Fall – Wall Street Journal, 2/19/2021

• Hospitalizations in the U.S. due to Covid-19 continued to decline and newly reported cases were at levels last seen in late October, though weather conditions are affecting vaccination efforts in some parts of the country.
• The U.S. reported more than 69,000 new coronavirus cases for Thursday, according to data compiled by Johns Hopkins University that was published early Friday.
• Thursday’s tally was similar to the previous day’s revised total of 70,188, which, while still elevated, is well off peak levels of earlier this year.
• A total of 62,300 Covid-19 patients were hospitalized in the U.S. as of Thursday, the sixth day in a row the figure has been under 70,000, according to the Covid Tracking Project.
• The number of people needing treatment in intensive-care units because of the disease also declined, to 13,045, the lowest level since Nov. 12.
• The nation’s death toll rose by more than 2,500 for Thursday, as the total exceeded 493,000, according to Johns Hopkins data.
• The 5,672 reported coronavirus infections among nursing-home residents in the week ended Feb. 7 marked the seventh straight week of decline, from 33,601 in the week ended Dec. 20, according to the data.

Covid-19 Was Spreading in China Before First Confirmed Cases, Fresh Evidence Suggests – Wall Street Journal, 2/19/2021

• New evidence from China is affirming what epidemiologists have long suspected: The coronavirus likely began spreading unnoticed around the Wuhan area in November 2019, before it exploded in multiple different locations throughout the city in December.
• Chinese authorities have identified 174 confirmed Covid-19 cases around the city from December 2019, said World Health Organization researchers, enough to suggest there were many more mild, asymptomatic or otherwise undetected cases than previously thought.
• Many of the 174 cases had no known connection to the market that was initially considered the source of the outbreak, according to information gathered by WHO investigators during the four-week mission to China to examine the origins of the virus.
• Chinese authorities declined to give the WHO team raw data on these cases and potential earlier ones, team members said.
• In examining 13 genetic sequences of the virus from December, Chinese authorities found similar sequences among those linked to the market, but slight differences in those of people without any link to it, according to the WHO investigators. The two sets likely began to diverge between mid-November and early December, but could possibly indicate infections as far back as September, said Marion Koopmans, a Dutch virologist on the WHO team.

Roku’s Revenue Surges 58% on Pandemic-Fueled Streaming Boom – Wall Street Journal, 2/19/2021

• Roku reported a 58% increase in revenue during the holiday quarter, as the streaming-media service continued to benefit from customers watching more entertainment while stuck at home during the Covid-19 pandemic.
• The company’s total revenue rose to $649.9 million in the fourth quarter, up from $411.2 million a year earlier.
• Revenue at Roku’s platform business, which includes ad sales, jumped 82% to $471.2 million.
• Roku’s player unit hit 51.2 million active accounts at year-end.
• Those accounts streamed an average of 3.8 hours a day in the fourth quarter, an increase of 10% year-over-year.
• Average revenue per user hit $28.76 for the quarter, up 24%.
• Overall, the streaming-media hub swung to a profit of $67.3 million, or 49 cents a share, from a loss of $15.7 million, or 13 cents a share.
• For the current first quarter, Roku projected revenue of $485 million, a 51% increase over a year earlier.
• Roku declined to provide guidance for the full year, citing uncertainty because of the pandemic.

Dropbox to sublease some offices in transition to remote working – Reuters, 2/19/2021

• Dropbox said it would sublease some of its office spaces as the file hosting service transitions to a remote working model.
• The beat was helped by the company’s quarterly revenue crossing the half billion mark for the first time on over a million new paying user additions and higher average revenue from each of them.
• Dropbox, which had only three profitable quarters as a public company, posted a bigger loss for the fourth quarter, hit by a one-time impairment charge of nearly $400 million related to its real estate assets.
• The company’s net loss widened to $345.8 million in the three months ended Dec. 31, from $6.6 million last year.
• However, on an adjusted basis, the company earned 28 cents per share, above the average analyst estimate of 24 cents, according to Refinitiv IBES.

Applied Materials forecast beats estimate as demand for chipmaking tools surges – Reuters, 2/19/2021

• Applied Materials on Thursday forecast second-quarter revenue above market expectations, as demand for its semiconductor manufacturing tools picked up during a global shortage of semiconductors.
• For the fiscal first quarter ended Jan. 31, Applied’s quarterly net sales rose 24% to $5.16 billion, above analysts’ average estimate of $4.97 billion, according to IBES data from Refinitiv.
• Excluding items, the company earned $1.39 per share in the fiscal first quarter, above Wall Street’s estimates of $1.28, according to Refinitiv data.
• The company expects fiscal second-quarter revenue of $5.39 billion, plus or minus $200 million, which would exceed above analysts’ expectations of $4.96 billion.
• The forecast calls for adjusted profits to be $1.44 to $1.56 per share, above estimates of $1.28.

Barrick beats profit estimates on higher gold prices – Reuters, 2/19/2021

• Canadian miner Barrick Gold reported a quarterly profit on Thursday that beat analysts’ estimates, helped by a jump in gold prices due to coronavirus-induced economic uncertainty.
• Quarterly net income nearly halved to $685 million as the company had gains related to some assets and acquisitions in the year-earlier quarter.
• On an adjusted basis, profit rose to $616 million, or 35 cents per share, in the fourth quarter ended Dec. 31, from $300 million, or 17 cents per share, a year earlier.
• Barrick said its all-in sustaining costs (AISC) for the reported quarter, an important metric for miners, rose to $929 per ounce from $923 last year.
• For 2021, the company expects AISC to be between $970 and $1,020 per ounce, compared with $967 in 2020.
• Barrick said it expects full-year production to be between 4.4 million ounces and 4.7 million ounces, compared with its 2020 production of 4.8 million ounces.
• The miner expects copper production in the range of 410 million to 460 million pounds this year, compared with production of 457 million pounds last year.

Deere upgrades 2021 earnings outlook on improved farm equipment demand – Reuters, 2/19/2021

• Deere on Friday upgraded its fiscal 2021 earnings forecast after profit more than doubled in the first quarter on improved demand for farm and construction machines and a higher adoption rate for its technology offerings.
• Equipment sales rose 23% year-on-year to $8.05 billion.
• Improved equipment demand has boosted Deere’s pricing power, which together with cost control measures led to a 196% year-on-year increase in operating profit in the latest quarter.
• Earnings for the first quarter came in at $3.87 per share compared with $1.63 per share last year. Analysts surveyed by Refinitiv, on average, had expected quarterly earnings of $2.14 per share.
• Deere expects large tractors, combines and sprayers to drive up its worldwide farm machine sales by 26% to 28% in 2021.
• Industry sales of large agricultural equipment in the United States and Canada – the company’s biggest combined market – are forecast to grow by 15% to 20% this year.
• The world’s largest farm equipment producer expects annual net income in the range of $4.6 billion to $5.0 billion, higher than the $3.6 billion to $4.0 billion forecast earlier.

Uber Loses U.K. Court Battle Over Worker Rights – Wall Street Journal, 2/19/2021

• The U.K.’s top court ruled that a group of former drivers for Uber Technologies were entitled to a minimum wage and other benefits while working for the company, dealing a setback to Uber and other gig-economy firms in world-wide battles over their employment model.
• The U.K.’s Supreme Court, in a unanimous decision issued Friday, upheld lower court decisions that granted the group of 25 drivers a type of U.K. employment status at Uber. The company had appealed those rulings, maintaining that its car-service and food-delivery drivers are independent contractors, without employee rights.
• While Friday’s decision directly applies only to the former Uber drivers involved, labor activists say it sets a potential precedent for others in the U.K. who work for companies in the gig economy, where apps distribute individual tasks to a pool of people that the app makers regard as independent contractors.
• Uber said that the decision doesn’t automatically reclassify all of its U.K. drivers, and that it is unrelated to its Uber Eats food-delivery business. The company said that since the case was filed it has added driver benefits such as insurance for sickness and injury.

IBM Explores Sale of IBM Watson Health – Wall Street Journal, 2/19/2021

• International Business Machines is exploring a potential sale of its IBM Watson Health business, according to people familiar with the matter, as the technology giant’s new chief executive moves to streamline the company and become more competitive in cloud computing.
• IBM is studying alternatives for the unit that could include a sale to a private-equity firm or industry player or a merger with a blank-check company, the people said.
• The unit, which employs artificial intelligence to help hospitals, insurers and drugmakers manage their data, has roughly $1 billion in annual revenue and isn’t currently profitable, the people said.
• It isn’t clear how much the business might fetch in a sale, and there may not be one.

Lawmakers in U.K., Canada Slam Facebook After Australia News Blackout – Wall Street Journal, 2/19/2021

• Lawmakers from the U.K. and Canada criticized Facebook’s ban on Australian users sharing news articles, and they said the tech giant could attract more scrutiny around the world as authorities grow increasingly concerned about its market power.
• Facebook removed news from its platform in Australia in response to legislation that would effectively compel it to pay traditional media companies for content. The Australian legislation, supported by media companies including News, owner of The Wall Street Journal publisher Dow Jones, has been widely watched globally and could offer a model for other countries that want to require big tech companies to pay publishers for their content.
• In the U.K., Julian Knight, the lawmaker who chairs the digital, culture, media and sport committee, tweeted that Facebook’s move to restrict news was deeply irresponsible. The news blackout also called into question Facebook’s commitment to be a good global citizen, he said in the tweet.
• In Canada, the country’s heritage minister, Steven Guilbeault, also called Facebook’s actions irresponsible, and he said his government would move forward on legislation to fairly govern the relationship between news media and tech companies.

After roller coaster year, Six Flags prepares theme park hiring spree – Reuters, 2/19/2021

• Six Flags Entertainment will hire thousands of workers this year as it prepares to reopen its theme parks after pandemic-induced shutdowns, thanks to COVID-19 vaccine rollouts.
• The company, known for roller coaster rides such as the El Toro, Batman the Ride and Bizarro, said on Friday it was planning on reopening all of its 26 theme parks in North America and that it would hire workers for its parks virtually.
• Six Flags Entertainment said it was working with state and government officials to set reopening dates for parks in California, Illinois, Massachusetts, Mexico City and Canada.