Stocks Climb to Start May – Wall Street Journal, 5/3/2021

• U.S. stocks rose Monday to kick off the first trading day of May, with shares of economically sensitive companies taking the lead.
• The S&P 500 advanced 0.6% in recent trading, on pace for further gains after closing out its best month since November.
• The Dow Jones Industrial Average surged about 315 points, or 0.9%.
• The technology-heavy Nasdaq Composite added about 0.2%.
• New data released Monday morning by the Institute for Supply Management (ISM) showed that a key gauge of the health of the U.S. manufacturing sector missed expectations but remained in growth mode.
• Demand expanded, the data showed. But wide-scale shortages of basic materials, rising commodities prices and difficulties in transporting products continued to affect the industry, the report showed.
• Federal Reserve Chairman Jerome Powell is scheduled to speak at 2:20 p.m. ET at a virtual conference.
• Investors are likely to be watching for any fresh insights from Mr. Powell on how the economy is faring.
• In bond markets, the yield on the 10-year Treasury note ticked down to 1.599%.
• It ended last week at 1.632%, posting its biggest weekly rise since mid March.
• Overseas, the pan-continental Stoxx Europe 600 rose 0.5%.
• Hong Kong’s Hang Seng Index fell 1.3%. India’s Sensex index declined 0.6%, after losing 1.5% last month.
• Markets in Japan and China were closed for a holiday.

Covid-19 Live Updates: Nearly a Third of Americans Fully Vaccinated – Wall Street Journal, 5/3/2021

• Nearly a third of all Americans have been fully vaccinated against the coronavirus, and newly reported cases of Covid-19 in the U.S. have been trending downward for more than two weeks.
• The U.S. reported more than 29,000 new cases for Sunday, according to data compiled by Johns Hopkins University and published early Monday morning Eastern time. The data may update later in the morning. Sunday’s figure was down from a day-earlier 45,303 and a week-earlier 32,065.
• Covid-19-related deaths were also down from a day earlier, with the nation reporting 325 for Sunday, according to Johns Hopkins. That number might also update later Monday morning.
• The U.S. death toll is now at more than 577,000, Johns Hopkins data show.
• An average of 2.4 million doses a day have been administered over the past week, according to a Wall Street Journal analysis of data provided by the Centers for Disease Control and Prevention, down from 2.8 million a week earlier.
• Some 31.6% of all Americans are now fully vaccinated, and 44.3% have been given at least one dose.

Estee Lauder sales miss estimates as makeup demand slumps – Reuters, 5/3/2021

• Estee Lauder missed analysts’ estimates for quarterly sales on Monday, as weak demand for its makeup products offset growth at the cosmetics maker’s skincare brands, with people continuing to work from home.
• Total net sales rose 16% to $3.86 billion for the third quarter ended March 31. Analysts had expected sales of $3.94 billion.
• Sales at the company’s skin care segment jumped 31% to $2.26 billion, while those at its makeup segment fell 11% to $1.02 billion.
• Estee Lauder forecast full-year sales to grow between 9% and 10%, excluding currency fluctuations.
• Analysts had expected sales to rise 11.8% to $15.99 billion, according to Refinitiv IBES data.

Bombardier sees first-quarter business jet revenue ahead of Street estimates – Reuters, 5/3/2021

• Bombardier said on Monday it expects first-quarter business jet revenue to come in ahead of analysts’ estimates, as rising vaccinations encourage wealthy travelers to return to flying.
• Bombardier, the maker of Global aircraft, said it expects first-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations of $123 million, above analysts’ average estimate of $89 million, according to IBES data from Refinitiv.
• The company expects business jet revenue to rise by 18% to $1.3 billion in the first quarter, from a year ago, beating Wall Street’s estimate of $1.18 billion.
• Bombardier said it remains on track to deliver between 110-120 business aircraft in 2021.
• The company’s full-year deliveries fell 20% to 114 jets in 2020.

Record Share of Companies Are Beating Earnings Estimates – Wall Street Journal, 5/3/2021

• With the earnings season more than halfway over, most companies in the S&P 500 have surpassed analysts’ profit expectations.
• As of Friday, results from 87% of those that have reported were better than expected, according to Refinitiv.
• That is above the historical average of 65% and on pace for the highest share since Refinitiv began tracking the metric in 1994.
• Going back to 1994, companies have beat earnings estimates by an average of 3.6%, according to Refinitiv.
• But this earnings season, companies have posted profits that have been 22.8% above expectations.
• The problem is that investors aren’t sure how much of the good news already has been baked into share prices. A number of companies that handily beat estimates have met with lackluster reactions in the stock market following their reports.

Fidelity Halves Its Ant Group Valuation After Beijing’s Clampdown – Wall Street Journal, 5/3/2021

• U.S. mutual-fund giant Fidelity Investments has drastically changed its view of what Jack Ma’s Ant Group is worth after China’s regulatory crackdown on the financial-technology giant severely dented its growth prospects.
• The Boston-based asset manager, which was among an elite group of global investors that bought into Ant three years ago, marked Ant shares in several of its funds at prices that implied a $144 billion valuation for the company at the end of February, according to regulatory filings.
• The prices were below what Fidelity originally paid for Ant’s shares, suggesting the firm believes it could incur a loss on the investment. They also reflect a big comedown from last August, when Fidelity’s marks pinned the company’s valuation at $295 billion, the filings showed.

Lumber Prices Break New Records, Adding Heat to Home Prices – Wall Street Journal, 5/3/2021

• The frenzied climb in lumber prices is generating superlative profits for sawmill owners.
• Home buyers, renters and do-it-yourselfers are footing the bill.
• Lumber futures for May delivery ended Friday at $1,500.50 per thousand board feet, an all-time high and roughly four times the typical price this time of year.
• Futures have risen by the daily maximum allowed by the Chicago Mercantile Exchange during nine of the last 17 trading sessions.
• Waiting for wood may not help. Mill owners say they are backed up with orders into June.
• Boards for July delivery, the most actively traded futures contract, ended Friday at $1,376.50. September lumber cost $1,235.

Apple and ‘Fortnite’ Maker Epic Games to Square Off in Court – Wall Street Journal, 5/3/2021

• A trial is slated to begin Monday between the maker of the popular videogame “Fortnite” and Apple that could help determine the future of how apps generate revenue through mobile devices.
• Epic Games sued both Apple and Alphabet’s Google in August after the companies removed “Fortnite” from their mobile app stores.
• The companies say their moves were justified because Epic broke their rules by inserting its own system for processing payments made inside the game, a move that would potentially circumvent the 30% slice of revenue they collect from in-app purchases.
• Epic, a closely held company valued at nearly $29 billion as of last month, has asserted that Apple charges exorbitant fees to mobile software developers and runs the App Store in a way that stifles smaller businesses and prohibits fair competition. A trial date hasn’t been set in Epic’s lawsuit against Google.

Verizon to Sell Yahoo, AOL to Apollo for $5 Billion – Wall Street Journal, 5/3/2021

• Apollo Global Management agreed to pay about $5 billion to acquire Yahoo and AOL from Verizon Communications as the wireless company exits its ill-fated foray into the media business.
• The private-equity firm is paying $4.25 billion in cash for a majority stake in the media assets and providing Verizon with interests in the businesses totaling $750 million.
• In addition, Verizon will keep a 10% stake in a new company, called Yahoo, that will be formed to operate the business.
• Other suitors previously showed interest in buying off certain pieces of the media unit, which includes websites such as TechCrunch and Yahoo Finance, but weren’t willing to make an offer for the whole portfolio, according to a person familiar with the matter.

Online share of retail sales jumps to 19% amid lockdowns – UN – Reuters, 5/3/2021

• Online sales accounted for nearly a fifth of total retail turnover last year as lockdowns to combat the spread of the coronavirus pandemic fueled a boom in e-commerce, a United Nations study released on Monday showed.
• Online sales accounted for 19% of overall retail sales in 2020, up from 16% a year earlier, according to estimates from the UN Conference on Trade and Development (UNCTAD) based on national statistical offices in major economies.
• South Korea reported the highest share at 25.9%, up from 20.8% the year before.
• China had a 24.9% share, Britain 23.3% and the United States 14.0%.
• Global e-commerce sales rose 4% to $26.7 trillion in 2019, according to the latest estimates available, UNCTAD said.
• This included business-to-business (B2B) and business-to-consumer (B2C) sales, and was equivalent to 30% of global economic output that year.

Ford, BMW lead $130 mln investing round in solid-state battery startup – Reuters, 5/3/2021

• Ford Motor and BMW are leading a $130 million funding round in a solid-state battery startup, Solid Power, as carmakers push to lower the cost of electric vehicles by investing in the development of affordable but powerful rechargeable batteries, the companies said on Monday.
• The Series B investment round, which includes venture capital firm Volta Energy Technologies, allows Solid Power to expand in-house manufacturing capabilities and positions the battery maker to eventually supply future EVs, possibly by the end of the decade according to BMW battery cell technology chief Peter Lamp.
• Solid Power declined to say at what level the funding round values the company.
• Solid-state battery technology involves a high-capacity energy storage device that improves on lithium-ion batteries, replacing the liquid or gel-form electrolyte with a solid, conductive material.
• Among other benefits, the new technology offers more energy density and better safety due to a lack of flammable components. Solid Power has said its technology can deliver 50% more energy density than current lithium-ion batteries.

Ford cuts production at two German plants due to chip shortage – Reuters, 5/3/2021

• U.S automaker Ford Motor said on Monday it was scaling back production at its plants in Cologne and Saarlouis for the next few weeks due to a semiconductor chip shortage.
• “The situation on the global semiconductor market remains tense and, according to all estimates, will continue to be so in the coming months, resulting in supply bottlenecks,” a spokeswoman for Ford said in a statement.
• The carmaker said it planned to make up for lost production “as best we can” and would prioritize vehicles already ordered by customers.