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Daily Market Report | Mar. 11, 2021

Stocks Rise After Dow Record – Wall Street Journal, 3/11/2021

  • U.S. stocks jumped Thursday, as investors piled back into technology stocks that have lagged behind in recent weeks amid a sharp uptick in bond yields.
  • Investors’ demand for stocks has revived as bond markets have calmed.
  • The yield on 10-year Treasury notes, which moves inversely to the price, ticked up to 1.526% from 1.520% Wednesday.
  • Yields climbed as high as 1.594% earlier this week after starting 2021 below 1%.
  • Muted inflation data for the start of the year have calmed nerves about the outlook for rates.
  • U.S. investors have also been closely watching the labor market for signals about how quickly the economy is improving as Covid-19 vaccines continue to rollout. On Thursday, fresh data showed that jobless claims continued to ease.
  • Filings for unemployment benefits dropped to 712,000 last week, Thursday’s data showed, slightly below economists’ estimates.
  • Investors’ appetite for U.S. government debt will face another test Thursday with the planned auction of $24 billion in 30-year bonds. The Treasury sold $58 billion of three-year notes on Tuesday and $38 billion of 10-year notes Wednesday.
  • China’s Shanghai Composite Index jumped 2.4% in its biggest one-day rise since October. Markets rose elsewhere in Asia, with Japan’s Nikkei 225 and South Korea’s Kospi gaining 0.6% and 1.9%, respectively.
  • Shares of videogame retailer and online-trading sensation GameStop dropped about 8.1%. Volatility has returned in recent sessions to the meme stocks that are the darlings of individual investors who gather on internet forums.

Covid-19 Live Updates: U.S. Cases Top 50,000 for Second Day – Wall Street Journal, 3/11/2021

  • Newly reported U.S. coronavirus cases rose slightly, as vaccinations continued to make progress and the Biden administration sought to bolster the nation’s supply of Covid-19 shots.
  • The U.S. reported 58,611 new cases for Wednesday, according to the latest data compiled by Johns Hopkins University. Wednesday’s tally edged up from Tuesday’s revised total of 57,417, but was sharply lower than the peak levels reached in January, when daily totals often topped 200,000.
  • The country reported 1,564 fatalities for Wednesday, pushing the total death toll to more than 529,200.
  • Nearly 10% of the U.S. population is now fully vaccinated against Covid-19 and an average of 2.2 million doses have been administered daily in the past week, according to a Wall Street Journal Analysis of data from the Centers for Disease Control and Prevention.
  • A continuing worry is the spread of new variants. An estimated half of current Covid-19 cases in New York City have been linked to variants first identified in New York City and the U.K., health officials said Wednesday.
  • Germany has seen a jump in coronavirus cases as health officials warn that a third wave of infections has begun in Europe’s largest country.
  • The Robert Koch Institute for Infectious diseases Thursday recorded over 14,300 new cases in the past 24 hours, up more than 2,400 from the same day last week.
  • New infections are also rising in France, where more than 30,000 cases were reported Wednesday—the highest in two weeks. More than 3,900 people are currently being treated in intensive care units, the most in over three months.
  • Hungary is also seeing a surge of new cases, reporting over 8,300 infections Thursday compared with 5,600 the day before. The country introduced new lockdown measures earlier this week, closing most stores for the next two weeks.

J&J’s Single-Dose Covid-19 Vaccine Approved by EU Drug Regulator – Wall Street Journal, 3/11/2021

  • The single-shot Covid-19 vaccine from Johnson & Johnson was cleared for use by the European Union’s drug agency on Thursday, but the regulator’s approval appears unlikely to immediately accelerate Europe’s lagging vaccine rollout.
  • The European Medicines Agency said that the J&J vaccine is safe and effective against Covid-19, paving the way for EU authorities to formally authorize its use later Thursday. Distribution is set to begin in the second quarter.
  • Trials found J&J’s vaccine had a high impact in preventing serious illness but was 67% effective overall when moderate cases were included. Side effects were usually mild or moderate, the EMA said.
  • In a statement, J&J said the data also showed 85% efficacy in preventing cases of serious disease.

Oracle cloud revenue misses as competition intensifies – Reuters, 3/11/2021

  • Business software maker Oracle’s cloud division reported quarterly revenue that missed analysts’ estimates, on increased competition from Amazon.com and Microsoft for cloud services due to remote working.
  • The company’s revenue rose 3% to $10.09 billion for the third quarter ended Feb. 28, edging past analysts’ estimates of $10.07 billion.
  • Revenue from Oracle’s cloud services and licenses support unit, its largest by revenue, rose 5% to $7.25 billion in the reported quarter, compared with analysts’ estimates of $7.27 billion.
  • On an adjusted basis, Oracle earned $1.16 per share, beating estimates of $1.11.
  • Oracle said it expects fourth-quarter revenue to increase between 1% and 3% on a constant currency basis, the midpoint of which implies a revenue of $10.65 billion, according to Reuters calculations.
  • Analysts had expected current-quarter revenue of $10.84 billion, according to IBES data from Refinitiv.

Bumble Revenue Jumped 31% in Latest Quarter – Wall Street Journal, 3/10/2021

  • Bumble’s sales climbed in the latest quarter, driven by an increase in paying users for its dating apps as people spend more time online due to the pandemic.
  • The Austin, Texas, company said fourth-quarter revenue surged 31% to $165.6 million, ahead of analysts’ consensus estimates of $163.3 million.
  • Revenue from the Bumble app increased 47% to $105.8 million while revenue from Badoo, a dating-focused social network popular in Europe and Latin America, rose 11% to $59.8 million.
  • Total paying users across its dating apps increased to 2.7 million, up about 33% from the prior year, the company said.
  • Average revenue per paying user, a key metric, was $20.02, up from $19.99 in the same period last year.
  • Bumble swung to a loss of $26.1 million for the fourth quarter, compared with a profit of $17.2 million in the comparable period a year earlier.
  • The company expects revenue this year of around $716 million to $726 million. In 2020, it made $542.2 million in revenue.

AMC Reopening More Theaters Closed by Covid-19 – Wall Street Journal, 3/10/2021

  • AMC Entertainment Holdings has reopened many of its theaters in recent weeks after a winter surge of coronavirus cases prompted the company to re-close several cinemas at the end of 2020 when sales fell 89%.
  • AMC on Wednesday reported a loss of $946.1 million for the fourth quarter, bringing its annual loss for 2020 to $4.59 billion.
  • The company generated $162.5 million in revenue to close out 2020.
  • The world’s largest movie theater chain said roughly 527 out of its 589 domestic theaters were open as of Friday, including those in New York City. Cinemas in Los Angeles are expected to open shortly, Chief Executive Adam Aron said Wednesday.
  • Internationally, only around 78 out of its 356 theaters were open, according to the company.

Fiscal Stimulus, Vaccine Rollouts Brighten OPEC’s Oil Demand Forecasts – Wall Street Journal, 3/11/2021

  • A growing wave of fiscal stimulus and the continuing rollout of coronavirus vaccinations are helping to brighten this year’s outlooks for economic growth and oil demand, the Organization of the Petroleum Exporting Countries said Thursday.
  • In its closely-scrutinized monthly market report, OPEC increased its global oil demand forecast by as much as 200,000 barrels a day and its forecast for global economic growth by 0.3 percentage points to 5.1%.
  • The cartel cited the U.S.’s latest $1.9 trillion fiscal stimulus bill and “the continuing recovery in Asian economies” in its move.
  • Oil prices rose Thursday, with Brent crude oil—the global benchmark—up 1.6% at $68.95 a barrel and West Texas Intermediate futures, the U.S. benchmark, climbing 1.5% to $65.42 a barrel.
  • The Vienna-based organization expects demand for its own crude in 2021 to be 4.9 million barrels a day higher than last year.
  • While that still doesn’t reverse last year’s 6.9 million barrel a day drop in demand for OPEC crude, it may reassure ministers about the production cuts they last week chose to relax by a smaller amount than the market had expected.

Facebook Seeks to Dismiss Antitrust Suits, Saying It Hasn’t Harmed Consumers – Wall Street Journal, 3/11/2021

  • Facebook on Wednesday asked a federal judge to dismiss antitrust lawsuits by the Federal Trade Commission and state attorneys general, arguing that government enforcers have no valid basis for alleging the social media giant is suppressing competition.
  • The FTC “utterly ignores the reality of the dynamic, intensely competitive high-tech industry in which Facebook operates,” the company said in seeking to dismiss the commission’s case.
  • In a second motion, Facebook argued the states’ case “does not and cannot assert that their citizens paid higher prices, that output was reduced, or that any objective measure of quality declined as a result of Facebook’s challenged actions.”
  • Facebook will have to meet a high legal standard to convince a federal judge to throw out the cases before trial.
  • In order to prevail on a motion to dismiss, the company must show that the plaintiffs’ factual allegations about the nature of the marketplace, even if accepted as true, don’t establish a valid legal claim.

U.S. weekly jobless claims drop to four-month low – Reuters, 3/11/2021

  • The number of Americans filing new claims for jobless benefits dropped to a four-month low last week as an improving public health environment allows more segments of the economy to reopen, putting the labor market recovery back on track.
  • Still, a full recovery from the deep scars inflicted by the COVID-19 pandemic will probably take years, with the weekly unemployment claims report from the Labor Department on Thursday also showing a whopping 20.1 million Americans collecting unemployment checks in late February.
  • Initial claims for state unemployment benefits decreased 42,000 to a seasonally adjusted 712,000 for the week ended March 6, the lowest level since early November.
  • Including a government-funded program for the self-employed, gig workers and others who do not qualify for the regular state programs, 1.2 million people filed claims last week.
  • The claims report also showed the number of people receiving benefits after an initial week of aid declined 193,000 to 4.144 million during the week ended Feb 27.
  • The decrease largely reflected people exhausting their eligibility for benefits, limited to 26 weeks in most states.
  • About 5.455 million people were on the government-funded extended benefits program during the week ended Feb. 20, up 986,351 from the prior week.
  • There number of people on unemployment benefits under all programs during that period increased by 2.087 million.

House Passes $1.9 Trillion Covid-19 Stimulus Bill; Biden to Sign Friday – Wall Street Journal, 3/11/2021

  • The House narrowly passed a $1.9 trillion coronavirus-aid bill, after Democrats used their slim majorities to muscle the latest economic stimulus package through Congress, just as the nation begins to emerge from a year of pandemic-related shutdowns.
  • Unlike previous rounds of aid, the vote was largely along party lines.
  • The vote was 220 to 211, with all GOP lawmakers and one Democrat, Rep. Jared Golden of Maine, voting against the bill.
  • The House had earlier passed legislation but had to vote again to reconcile it with the Senate version.
  • Mr. Biden plans to give a prime-time speech on Thursday about the pandemic response and sign the bill on Friday.

Top U.S., China Officials to Meet Next Week in Alaska on Range of Issues – Wall Street Journal, 3/11/2021

  • Top U.S. and Chinese officials are set to hold talks next week in the first high-level in-person meeting between the two powers since President Biden took office, after months of deteriorating ties.
  • The meeting between Secretary of State Antony Blinken, national security adviser Jake Sullivan and their Chinese counterparts will be held in Alaska, is tentatively set for March 18 and 19, and will give each side time to lay out their priorities and cover a range of divisive issues, U.S. officials said Wednesday.
  • Topics will include the Covid-19 pandemic, climate change, and issues of disagreement including China’s stance on Hong Kong and pressure on Taiwan, and the “undeclared economic embargoes” China has placed on Australia, a senior administration official said.
  • The U.S. will also discuss Chinese practices seen as damaging to American workers and farmers, as well as intellectual property theft, forced technology transfer and human rights, the official said.

Cash-Out Refinancings Hit Highest Level Since Financial Crisis – Wall Street Journal, 3/11/2021

  • Americans extracted more cash from their homes through cash-out refinancings in 2020 than in any year since the financial crisis.
  • U.S. homeowners cashed out $152.7 billion in home equity last year, a 42% increase from 2019 and the most since 2007, according to mortgage-finance giant Freddie Mac.
  • The median existing-home price rose to about $310,000 in December, an increase of almost 13% from December 2019.
  • The acceleration in price growth has spread past cities to suburban and rural areas as Americans re-evaluate where they want to live during and after the pandemic.
  • Still, borrowers who did major cash-out refis withdrew an average of $50,000 last year, down from $59,000 the year before, according to the New York Fed.

EUROPE & WORLD

China All but Ends Hong Kong Democracy With ‘Patriots Only’ Rule – Wall Street Journal, 3/11/2021

  • China drew the curtain on decades of adversarial politics in Hong Kong as the national legislature approved electoral changes that would put pro-Beijing loyalists firmly in charge of the city and squeeze opposition groups from elected office.
  • Thursday’s near-unanimous vote by the National People’s Congress paves the way for China’s top lawmaking body to revamp as soon as next month how the former British colony picks its leader and legislators.
  • The overhaul will give Beijing much greater control over local elections that were meant to be partly democratic—thanks to an effective veto against candidates deemed unpatriotic.
  • Chinese officials say the changes are meant to close legal loopholes that had allowed anti-China forces to impede governance and incite unrest in Hong Kong, which was rocked by mass antigovernment protests in 2019.
  • “It’s the biggest regression of the system since the handover,” said Lo Kin-hei, chairman of Hong Kong’s Democratic Party, who is out on bail after his arrest last year for allegedly participating in an unauthorized assembly in late 2019.
  • “What we’ve seen over the past year is that authorities will do whatever they want, whenever they want, in a way that was unimaginable before.”

ECB to Speed Up Bond Purchases to Prop Up Sluggish Economy – Wall Street Journal, 3/11/2021

  • The European Central Bank said it would accelerate its purchases of eurozone debt after a recent rise in borrowing costs, a surprise decision that diverges from the Federal Reserve as it seeks to shore up the region’s flagging economy.
  • In a statement after its policy meeting Thursday, the ECB said it expects to conduct purchases under a €1.85 trillion bond-buying program, equivalent to $2.2 trillion, at a significantly higher pace over the next three months than earlier this year.
  • It also left its key interest rates unchanged.
  • At a news conference Thursday, President Christine Lagarde said the ECB was acting to counter an undesirable increase in bond yields, part of which was due to higher growth expectations in the U.S.
  • “We are moving into action as early as tomorrow,” she said of the ECB’s accelerated bond purchases.

China’s JD.com cashes in on steady online demand, beats market expectations – US News & World Report, 3/11/2021

  • JD.com’s fourth-quarter revenue beat expectations on Thursday as more shoppers flocked to its website on the back of a broader shift to online shopping triggered by the COVID-19 pandemic.
  • The company’s net revenue rose 31.4% to 224.3 billion yuan in the quarter ended Dec. 31, beating analysts’ estimate of 219.73 billion yuan, according to IBES data from Refinitiv.
  • The Beijing-based company posted revenue of 745.8 billion yuan ($114.97 billion) for the year, beating analysts’ estimate of 740.81 billion yuan.
  • JD.com raked in 110 million new active customer accounts during the year. Meanwhile, Jack Ma’s Alibaba added about 68 million active buyers in the same period.

‘As long as it lasts’ – Rolls-Royce says can weather crisis despite record loss – Reuters, 3/11/2021

  • Rolls-Royce has enough funding to weather the crisis in the aviation industry caused by the pandemic, its chief executive said on Thursday, after the engine maker plunged to a record 4 billion pound ($5.6 billion) underlying loss for 2020.
  • The British company said its cash burn should halve this year, and turn positive in the second half as vaccinations kick in and travelers return to the skies.
  • Last year’s cash burn of 4.2 billion pounds was in line with analysts’ expectations, and Rolls guided that would reduce this year to 2 billion pounds.
  • The company axed 15% of staff in 2020, and earmarked 2 billion pounds of assets for sale to repair its balance sheet.

BMW says wind is at its back after pandemic dents 2020 profit – Reuters, 3/11/2021

  • BMW said on Thursday that it was back on a profitable track in 2021 after recovering from shutdowns and a serious dent to sales due to the COVID-19 pandemic in the first half of last year.
  • The premium carmaker posted a full-year 2020 pre-tax profit of 5.2 billion euros ($6.22 billion), down nearly 27% from 7.2 billion euros in the prior year.
  • BMW sales in China rose 7.4% in 2020 versus 2019, mostly offsetting declines in other regions.
  • BMW ended the year with free cash flow of 3.4 billion euros, up from 2.6 billion euros in 2019 despite widespread lockdowns.
  • Investments in electrification, self-driving technology and connectivity meant that research and development costs remained high at 5.7 billion euros ($6.8 billion), though more than 4% below the nearly 6 billion euros the company spent in 2019.

Factmonster – TODAY in HISTORY

  • The Confederate States of America adopted its constitution. (186)
  • A torrential rainstorm hit the East Coast. The rain turned to snow the next day and it became the Blizzard of 1888, the most famous snowstorm in American history. It caused more than 400 deaths. (1888)
  • William Howard Taft became the first U.S. president to be buried in the National Cemetery in Arlington, Virginia. (1930)
  • President Roosevelt signs the Lend-Lease Bill. (1941)
  • Mikhail Gorbachev became head of the Soviet Union following the death of Konstantin Chernenko. At 54, he was the youngest member of the ruling Politburo. (1985)
  • A newly elected parliament in Lithuania declared its independence from the Soviet Union. (1990)
  • Janet Reno won unanimous Senate confirmation to be the first female U.S. Attorney General. (1993)
  • Japan is hit by an enormous earthquake that triggers a deadly 23-foot tsunami in the country’s north, about 230 miles northeast of Tokyo. Cooling systems in one of the reactors at the Fukushima Daiichi Nuclear Power Station fail shortly after the earthquake, causing a nuclear crisis. (2011)

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