Stocks Slip, Yields Climb After Jobs Report – Wall Street Journal, 3/5/2021

• U.S. stocks wobbled Friday after February’s stronger-than-expected employment report helped government bond yields extend their recent surge.
• The S&P 500 slipped 0.5%, while the Dow Jones Industrial Average edged down 0.1%, or about 35 points.
• The technology-heavy Nasdaq Composite, meanwhile, dropped 1.6%.
• The S&P 500 was on pace to end the week with a modest loss, while the Nasdaq was on course to fall about 4% for the week. It would be the third consecutive week of declines for both stock gauges.
• Technology stocks have borne the brunt of the shift in sentiment in recent weeks. The Nasdaq Composite Index, a closely watched barometer for the sector, on Thursday fell to its lowest level since Jan. 4.
• The index ended the day down 9.7% from its Feb. 12 high, putting it just short of correction territory.
• The February report showed the economy added 379,000 new jobs last month, ahead of estimates of 210,000.
• The unemployment rate was 6.2%, versus the consensus of 6.3%.
• Stocks have stumbled in recent weeks as a climb in bond yields has called into question whether low interest rates, which propelled valuations higher for much of the past year, can continue for much longer. Yields, which rise as bond prices fall, have rallied in response to expectations of a quickening pace of growth and inflation as the economy reopens from the coronavirus pandemic.
• Overseas, the pan-continental Stoxx Europe 600 ticked down 0.2%. Major Asian indexes declined. Japan’s Nikkei 225 ticked 0.2% lower, while Hong Kong’s Hang Seng Index dropped 0.5%.

Covid-19 Live Updates: New U.S. Cases, Deaths Fall – Wall Street Journal, 3/5/2021

• Newly reported coronavirus infections ticked down slightly and deaths declined, as the number of cases each day appeared to plateau after a recent drop.
• There were more than 65,000 new Covid-19 cases reported in the U.S. for Thursday, according to data compiled by Johns Hopkins University and published early Friday morning Eastern time.
• That was down slightly from the 66,460 reported for Wednesday, and the latest number could update later in the morning.
• While most states continue to see declines, some states are seeing an uptick. The Journal’s analysis showed that in more than 15 states as of Wednesday, the average number of new cases over the past seven days was greater than the average number of cases over the past 14 days, a sign cases are on the rise.
• Those states include Texas, Arkansas, New Jersey and Mississippi.
• The U.S. reported more than 1,700 deaths for Thursday, down from Wednesday’s 2,468.

WHO Investigators to Scrap Plans for Interim Report on Probe of Covid-19 Origins – Wall Street Journal, 3/5/2021

• A World Health Organization team investigating the origins of Covid-19 is planning to scrap an interim report on its recent mission to China amid mounting tensions between Beijing and Washington over the investigation and an appeal from one international group of scientists for a new probe.
• The group of two dozen scientists is calling in an open letter on Thursday for a new international inquiry. They say the WHO team that last month completed a mission to Wuhan—the Chinese city where the first known cases were found—had insufficient access to adequately investigate possible sources of the new coronavirus, including whether it slipped from a laboratory.
• Beijing, meanwhile, is pressing for similar WHO-led missions to other countries, including the U.S., to investigate whether the virus could have originated outside China and spread to Wuhan via frozen food packaging.
• According to an advance copy of the open letter, the group of 26 scientists and other experts in areas including virology, zoology and microbiology said that it was “all but impossible” for the WHO team to conduct a full investigation, and that any report was likely to involve political compromises as it had to be approved by the Chinese side.

Costco Sales Rise 15% in Latest Quarter – Wall Street Journal, 3/4/2021

• Costco Wholesale’s sales climbed again in the latest quarter as Americans continue to shop for food and goods for the home during the pandemic.
• The wholesale retail chain’s revenue rose to $44.77 billion in the quarter ended Feb. 14, a 15% increase from the year-earlier period, driven by strong demand for fresh food and household goods and topping analysts’ projections of $43.7 billion.
• Comparable sales, at stores or digital channels operating for at least 12 months, increased 12.9% during the February quarter, excluding the impact of gasoline sales and currency movements.
• The retailer’s e-commerce sales rose 74.8% from the prior year as adjusted.
• The average ticket size increased 11.9% company-wide.
• Costco recorded a profit of $951 million, or $2.14 a share, for the quarter, up from $931 million, or $2.10 a share, in the comparable period last year. Analysts were targeting $2.45 a share.
• This included $246 million in pretax costs primarily related to premium wages paid during the Covid-19 pandemic.

Broadcom shares fall as chip sales disappoint – Reuters, 3/4/2021

• Shares of Broadcom fell on Thursday after the company reported chip sales slightly below Wall Street estimates, joining a growing list of chip industry peers hit by the global semiconductor shortage.
• Strong software revenue helped overall sales rise to $6.66 billion in the fiscal first quarter from $5.86 billion a year earlier.
• Overall first-quarter sales beat analyst expectations of $6.62 billion, according to IBES data from Refinitiv.
• Broadcom reported semiconductor solutions revenue of $4.90 billion for its fiscal first quarter ended Jan. 31, slightly below analyst estimates of $4.95 billion, according to IBES data from Refinitiv.
• For the fiscal first quarter, Broadcom’s infrastructure software business had sales of $1.74 billion, beating Wall Street estimates of $1.64 billion, according to Refinitiv data.
• Excluding items, the company earned $6.61 per share in the fiscal first quarter, beating analysts’ estimate of $6.56 per share.
• Broadcom forecast second-quarter revenue of about $6.5 billion, compared with analysts’ estimates of $6.33 billion, according to IBES data from Refinitiv.

Gap forecasts return to sales growth on Athleta boost, vaccine roll-out – Reuters, 3/4/2021

• Apparel retailer Gap on Thursday forecast a return to sales growth this year, as it expects sales at its Athleta brand to double in the next two years and the roll-out of COVID-19 vaccines to drive traffic at its stores.
• Athleta’s sales surged 29% to more than a billion dollars in the fourth quarter and that is expected to reach $2 billion by 2023, Chief Executive Officer Sonia Syngal told analysts in a post-earnings conference call.
• Online sales surged 49% in the quarter.
• On a per share basis, Gap earned 28 cents per share in the fourth quarter, 10 cents more than expectations, according to IBES data from Refinitiv.
• Fiscal year 2021 net sales are expected to reflect mid- to high-teens growth, and Gap forecast earnings to be in the range of $1.20 per share to $1.35 per share.

30-Year Mortgage Rate Tops 3% for First Time Since July – Wall Street Journal, 3/5/2021

• Americans who purchased new homes or refinanced their mortgages over the past few months may have done so at just the right moment.
• The average rate on a 30-year fixed-rate mortgage rose to 3.02%, mortgage-finance giant Freddie Mac said Thursday. It is the first time the rate on America’s most popular home loan has risen above 3% since July and the fifth consecutive week it has increased or held steady.
• Even before the recent climb in rates, surging U.S. home prices had begun to outweigh the savings afforded by historically low borrowing rates. The typical monthly mortgage payment in the fourth quarter rose to $1,040 from $1,020 a year earlier even as mortgage rates declined, according to the National Association of Realtors.
• Rising rates can also put the brakes on refinancings, which accounted for about 60% of mortgage originations in 2020, according to the Mortgage Bankers Association.
• With a 30-year rate of 2.75%, about 18 million U.S. homeowners could reduce their monthly payments through a refinance, according to mortgage-data firm Black Knight.
• When the rate rises to 3.25%, the pool of eligible homeowners shrinks to about 11 million.

Treasury Rout Pushes Bond Funds Into Riskier Assets – Wall Street Journal, 3/5/2021

• Optimism about economic recovery has triggered a selloff in U.S. Treasurys that is pushing fixed-income investors to run for cover in some unlikely havens.
• Fund managers are bulking up on junk bonds, corporate loans, equity-linked bonds and even stocks, analysts and investors said, while selling assets that trade more in line with government debt, including mortgage-backed and investment-grade corporate bonds.
• Sales of new CLOs hit $58 billion in the first two months of 2021, the biggest start to any year since at least 2013, according to data compiled by Barclays PLC.

Just 12% of Americans plan spring break travel – industry – Reuters, 3/5/2021

• U.S. travel demand remains low even as tens of millions of Americans get vaccinated for COVID-19, with just 12% planning a spring break trip this year, the industry said on Thursday.
• The industry said the number planning to travel for spring break fell from 16% in a poll a week earlier.
• The U.S. Travel Association said polling that it commissioned suggested Americans remained wary about travel and that it was “far from clear when demand for travel will rebound on its own.”
• The group believes travel demand will see a significant rebound by Memorial Day on May 31. President Joe Biden said this week the United States would have enough COVID-19 vaccine for every American adult by the end of May.

U.S. Senate mulls $30 billion in funding to boost chipmaking sector, source says – Reuters, 3/5/2021

• The U.S. Senate is considering including in a new bill to boost competitiveness against China $30 billion in funding for previously-approved measures to supercharge the country’s chipmaking industry, a congressional source said on Thursday.
• Lawmakers aim to bring the package, which would include other elements to boost the U.S. tech sector, to a full vote in April, the person said, declining to be named because the legislation has not been finalized.
• The source, who is involved in the effort, said that the Schumer-led package is likely to have provisions curbing China’s access to U.S. capital markets, a focus of the Trump administration’s crackdown on Beijing.
• Schumer said last month he had directed lawmakers to craft a new bill to boost U.S. competitiveness against China, based on legislation he and Republican Senator Todd Young proposed last year to provide funding of $100 billion to spur research in key tech areas, from artificial intelligence to quantum computing and semiconductors.