Daily Market Report | Apr. 09, 2021
S&P 500 on Track for Third Straight Week of Gains – Wall Street Journal, 4/9/2021
- The S&P 500 wobbled Friday but remained on track to notch a big weekly gain, continuing its longest winning streak since October.
- The broad stock market index rose about 0.1% early Friday after closing Thursday at its 19th all-time high for 2021.
- The benchmark is on track to notch gains for a third straight week for the first time in nearly six months.
- The Nasdaq Composite slipped 0.4%. The Dow Jones Industrial Average gained 114 points, or 0.3%.
- The S&P 500 and Nasdaq are on track to gain about 2% a piece this week, while the Dow is on track for a 1.4% weekly rise.
- In bond markets, the yield on the 10-year Treasury note ticked up to 1.673%, from 1.632% Thursday.
- It remains below the 1.749% it hit at the end of last month.
- Overseas, the pan-continental Stoxx Europe 600 edged up 0.1%.
- In Asia, most major benchmarks closed lower. The Shanghai Composite Index shed 0.9%, and Hong Kong’s Hang Seng Index declined 1.1%. South Korea’s Kospi edged down 0.4%.
Covid-19 Live Updates: Newly Reported U.S. Cases Rise – Wall Street Journal, 4/9/2021
- Newly reported coronavirus cases in the U.S. edged up and immunizations continued to gain steam, with nearly a fifth of the population now fully vaccinated against Covid-19.
- The U.S. reported 79,878 new cases for Thursday, according to the latest data compiled by Johns Hopkins University.
- Thursday’s figure was higher than the 75,038 reported for Wednesday and was similar to levels last seen in February, after the peak in daily caseloads reached in January, according to Johns Hopkins data.
- The seven-day average, which smooths out differences in data reporting, was 66,057 on Thursday, while the 14-day average was 65,872, according to a Wall Street Journal analysis of Johns Hopkins data.
- When the seven-day average is higher than the 14-day average, it indicates cases are rising
- Covid-19 hospitalizations have also edged higher, to more than 43,000, according to the latest data posted by the U.S. Department of Health and Human Services.
- Nearly 20% of U.S. residents are now fully vaccinated and an average of 3 million doses were administered each day over the past week, according to a Wall Street Journal analysis of Centers for Disease Control and Prevention data.
Levi Strauss raises sales outlook on vaccine hopes, shares jump – Reuters, 4/8/2021
- Levi Strauss on Thursday raised its half-year revenue growth forecast, banking on COVID-19 vaccine rollouts to spur a return to normalcy, after the denim maker beat estimates for quarterly results on a pandemic-led e-commerce boost.
- Net revenue fell about 13% to $1.31 billion for the first quarter ended Feb. 28, but came in above analysts’ expectations of $1.25 billion.
- Digital revenue, which includes sales from Levi’s wholesale partners, rose about 41% and more than made up for a drop in physical store visits due to pandemic.
- On an adjusted basis, Levi earned 34 cents per share, above analysts’ estimates of 25 cents.
- The jeans maker said it expected its revenue to increase 24% to 25%, up from a prior range of 18% to 20%, for the first half of its fiscal 2021.
- Levi also said it expected adjusted per-share profit for the period to be 41 cents to 42 cents. Analysts on average expect a profit of 30 cents per share for the first and second quarter, according to IBES data from Refinitiv.
Amazon Is Ahead in Union Vote as Tallying Set to Resume – Wall Street Journal, 4/9/2021
- Federal officials will resume counting votes Friday morning in a closely watched union election in which a large margin of Alabama warehouse workers for Amazon.com have so far sided against unionization.
- After about half the ballots were counted by federal officials as of Thursday, roughly 70% of the Amazon employees had voted not to unionize, according to a Wall Street Journal tally.
- The National Labor Relations Board is set to continue counting votes in a broadcast Friday, when the final outcome could become clear. A total of 3,215 ballots were submitted.
- As the tally swung in Amazon’s favor Thursday, the union criticized the company’s tactics, including mandatory meetings that the company held to discourage workers from voting for unionization and its move to have the U.S. Postal Service install a mailbox outside the Bessemer facility.
- The union, which said the mailbox could have intimidated workers who might have incorrectly thought that Amazon was conducting the election, is expected to accuse the company of unfair labor practices after the election ends.
- Netflix has reached a multiyear agreement with Sony Pictures Entertainment for domestic streaming rights to the studio’s theatrical movies, the companies said Thursday.
- The deal will start with Sony Pictures’ 2022 movie slate. As part of the pact, Netflix will have a first-look option to pick up movies Sony is making or licensing specifically for streaming platforms.
- Netflix has committed to ordering an undisclosed number of those films, the streaming giant said.
- Terms of the five-year deal weren’t disclosed. People familiar with the deal said it would be worth several hundred million dollars annually and more than $1 billion over the course of the agreement.
Boeing 737 MAX Faces Fresh Inspections – Wall Street Journal, 4/9/2021
- Boeing said on Friday it had told some 737 MAX operators to inspect planes for potential electrical problems, prompting airlines to remove the aircraft from service.
- The company said aircraft flown by 16 airlines were affected by the issue discovered during production of an undelivered jet in Seattle. The MAX re-entered service in December having been grounded since March 2019 following two fatal accidents.
- Boeing didn’t disclose how many planes were affected and said it was too early to know how long it would take to inspect the planes, ensure that the affected part is correctly installed and make any required fixes.
- The electrical issue relates to a component unrelated to the automated flight-control system malfunction that led to the crashes of planes flown by Indonesia’s Lion Air in October 2018 and Ethiopian Airlines in March 2019, according to a Boeing spokesperson.
GM, Ford cutting more North American production due to chip shortage – Reuters, 4/9/2021
- General Motors and Ford Motor both said on Thursday they will cut more vehicle production due to a semiconductor chip shortage that has roiled the global automotive industry.
- The largest U.S. automaker said it will cut production for two weeks at its Spring Hill assembly plant that makes popular SUVs starting on Monday, and cut a week of Chevrolet Blazer production at its Ramos plant in Mexico and its Lansing Delta Township factory in Michigan.
- Ford, the second-largest U.S automaker, said it will cancel production next week at its Chicago Assembly Plant, its Flat Rock Assembly Plant and part of its Kansas City Assembly Plant. It will also operate its Ohio Assembly Plant on a reduced schedule.
- The White House plans a summit on the chip shortage issue next Monday that is expected to include GM Chief Executive Mary Barra and Ford Chief Executive Jim Farley and top technology firm executives.
Some early Ford Mustang Mach-E owners suffer dead batteries – Reuters, 4/9/2021
- Early owners of Ford Motor’s newest electric vehicle, the Mustang Mach-E crossover, have experienced a battery problem that leaves their vehicles unable to start after charging, according to a service bulletin filed by Ford with the National Highway Traffic Safety Administration.
- Ford said a software glitch can cause the vehicle’s smaller 12-volt battery to discharge while the larger high-voltage battery pack is charging.
- Ford said only “a small number” of Mach-Es built before Feb. 3 were affected, and dealers are able to correct the issue by reprogramming several of the electronic control modules on the vehicle.
- Ford said it sold 6,614 Mach-Es in the first quarter.
- Tesla, the industry’s electric vehicle leader, said it delivered a record 184,800 cars worldwide in the quarter.
McDonald’s to hire 25,000 staff in Texas this month – Reuters, 4/9/2021
- McDonald’s said on Thursday it would hire 25,000 people in its restaurants across Texas, United States in April.
- The burger chain said it will hire for crew and management positions in a three-day event from April 13-15.
- Last year, McDonald’s hired around 260,000 restaurant staff in the United States when stores reopened for diners after serving them through delivery, drive-thru and takeaway for weeks due to the COVID-19 pandemic.
U.S. Producer Prices Increased by More Than Forecast in March – Bloomberg, 4/9/2021
- U.S. producer prices climbed more than forecast last month in a broad advance, indicating inflationary pressures continue to build across the nation’s economy.
- The producer price index for final demand increased 1% in March from the prior month after a 0.5% gain in February, the Labor Department said on Friday. The gain was twice the median projection in a Bloomberg survey of economists as cost increases for goods and services accelerated.
- The monthly advance in the index led to a 4.2% increase in the overall PPI from March 2020, when the pandemic caused prices to retreat. That was the sharpest annual gain since 2011.
- Excluding volatile food and energy components, the so-called core PPI increased 0.7% from a month earlier.
- Producer prices excluding food, energy, and trade services — a measure often preferred by economists because it strips out the most volatile components — rose 0.6% in March from a month earlier and increased 3.1% from the same period last year.
- The Biden administration offered new proposals on taxing multinational companies in a bid to secure an international agreement aimed at reducing tax avoidance, particularly by big pharmaceutical and technology companies.
- The administration’s proposal runs parallel to one for a global minimum corporate tax rate and the two are closely linked in the talks.
- The U.S., is pitching its approach as a simpler, more workable solution than the alternatives floated over the past few years.
- In the presentation, the administration says it hopes its new proposal will bring stability to the international taxation of company profits, following a period in which a number of European and other governments have introduced new taxes on the profits of mostly U.S. technology companies.
U.S. Blacklists Chinese Entities It Says Are Aiding Weapons Program – Wall Street Journal, 4/9/2021
- The Biden administration on Thursday barred U.S. companies from supplying Chinese entities it said were building supercomputers to help Beijing develop new weapons of mass destruction, including nuclear devices.
- The action, which will block sales of advanced U.S. semiconductors among other products, represents a further toughening of U.S. technology trade restrictions amid an increasingly adversarial relationship with China.
- The U.S. “will use the full extent of its authorities to prevent China from leveraging U.S. technologies to support these destabilizing military modernization efforts,” U.S. Secretary of Commerce Gina Raimondo said in a written statement.
- The Chinese companies and computing centers targeted Thursday were added to a so-called entities list that restricts the export, re-export and transfer of items to entities involved in activities contrary to the national-security or foreign-policy interests of the U.S.
- The entities added were Tianjin Phytium Information Technology, Shanghai High-Performance Integrated Circuit Design Center, Sunway Microelectronics, the National Supercomputing Center Jinan, the National Supercomputing Center Shenzhen, the National Supercomputing Center Wuxi and the National Supercomputing Center Zhengzhou.
EUROPE & WORLD
China Flags Deeper Clampdown on Debt Growth at Local Banks – Bloomberg, 4/9/2021
- China’s government told smaller, local financial institutions to step up risk management and avoid “excessive” growth, stepping up a campaign to clamp down on a buildup in debt as the economy stabilizes.
- At a meeting of the Financial Stability and Development Committee on Thursday, Vice Premier Liu He called for “zero tolerance” on illicit activities, telling regulators to strengthen supervision of shareholders and owners of financial institutions, risk concentration, connected transactions and data authenticity, according to an official statement.
- The central bank has also told the nation’s major lenders to curtail loan growth for the rest of this year after a surge in the first two months stoked bubble risks, people familiar with the matter have said.
- At a meeting with the People’s Bank of China on March 22, banks were told to keep new advances in 2021 at roughly the same level as last year.
Airbus deliveries surge in March, sending shares higher – Reuters, 4/9/2021
- A rebound in air travel in China and the United States helped to drive a surge in March deliveries for Airbus, sending the planemaker’s shares higher.
- Airbus reported slightly higher deliveries for the first quarter and posted 39 gross orders, including a new deal for 20 A220s to an unidentified buyer.
- But the company’s net orders – which are adjusted for cancellations – remained in negative territory for the first quarter, with a total of minus 61 net orders dominated by a Norwegian cancellation unveiled in the previous month.
- Internally, the planemaker is aiming for more than 600 deliveries, suppliers say.
- Data issued late on Thursday highlighted a trend of buyers upgrading orders for the 150-seat A320neo to the larger A321neo, which can seat more than 200 passengers – a segment in which Airbus has been strongly outselling U.S. rival Boeing.
China halts new enrollments at business school backed by Jack Ma: FT – Reuters, 4/9/2021
- Beijing authorities have forced an elite business school backed by Alibaba founder Jack Ma to halt enrollments, the Financial Times said on Friday, citing sources familiar with the matter.
- The clampdown on the school, founded in 2015 by Ma to train China’s next generation of entrepreneurs, comes as his business empire faces government scrutiny.
- The enrollment halt comes amid Beijing’s crackdown on Ma’s businesses. Late last year Ant Group, a financial affiliate of Alibaba, abruptly suspended a planned $37 billion IPO in Shanghai following pressure from the authorities.
- The botched listing came after Ma made comments in public criticizing China’s financial regulators. He has yet to make a public appearance since, save for a brief 50-second video clip broadcast to a group of teachers.
- China’s antitrust regulator is ready to clear tech giant Tencent Holdings’s plan to take the country’s no.3 search engine Sogou private, three people with knowledge of the matter told Reuters, a move that signals the watchdog is willing to wave some deals through even as it ratchets up sector scrutiny.
- The regulator, State Administration of Market Regulation (SAMR), has no objection to the $3.5 billion deal for the 60% of U.S.-listed Sogou that Tencent doesn’t already own, the people said, as long as Tencent is willing to set up a special mechanism to ensure data security – a first for SAMR deal approvals.
- Tencent must also pay a comparatively small fine – 500,000 yuan ($76,000) – for not reporting deals properly for antitrust reviews, two of the people said, in line with past cases for similar violations.
Factmonster – TODAY in HISTORY
- Robert E. Lee surrendered to Gen. Ulysses S. Grant at Appomattox Court House. (1865)
- American and Philippine troops on Bataan were overwhelmed by Japanese forces during World War II. The “Bataan Death March” began soon after. (1942)
- American Marines pulled down Saddam Hussein’s statue in Baghdad after U.S. commanders declared his rule ended. (2003)
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