Daily Market Report | Nov. 12, 2020

US FINANCIAL MARKET

U.S. Stocks Slip on Covid-19 Concerns – Wall Street Journal, 11/12/20

  • Major U.S. stock indexes slid Thursday amid a pickup in Covid-19 hospitalizations and renewed talks of lockdowns and restrictions to curb the virus’s spread.
  • Optimism about a Covid-19 vaccine powered markets higher at the start of the week, but has since been waning as investors and health experts raise questions about when it may become available for widespread use.
  • At the same time, the U.S. recorded its highest number of hospitalizations due to the coronavirus since the start of the pandemic.
  • Markets are growing jittery about economic activity being hobbled in the coming months by fresh restrictions.
  • New York Gov. Andrew Cuomo on Wednesday said most bars, restaurants and gyms would have to close at 10 p.m. and cautioned that rising infection levels may prompt more restrictions.
  • Fresh data showed that U.S. jobless claims remained high last week, but slipped to their lowest level since March, suggesting some workers are finding jobs even as virus cases climb.
  • Consumer prices were flat in October, according to new data out Thursday, as higher costs for dining out and groceries were offset by declines for items such as apparel and household furnishings.
  • On the business front, Walt Disney and Cisco Systems are expected to report earnings after the close of markets. Their results will be closely scrutinized for insight into the strength of companies that benefit as people stay at home during the pandemic.

Coronavirus Live Updates: U.S. Cases Top 100,000 for Ninth Day Running – Wall Street Journal, 11/12/20

  • New coronavirus cases in the U.S. climbed to another record, topping 100,000 for the ninth day in a row, as hospitals faced increasing numbers of Covid-19 patients.
  • The U.S. reported more than 144,000 new cases for Wednesday, up about 4,000 from the day before, according to data compiled by Johns Hopkins University.
  • Indiana’s single day number was above 5,000 for the first time, according to Johns Hopkins. Other states recording all-time highs included Illinois, North Carolina, Colorado, Kentucky, Arkansas, Idaho, New Mexico and West Virginia.
  • As the virus spreads, hospitals face a surge of Covid-19 patients. Hospitalizations due to the illness rose to a record 65,368 for Wednesday, according to the Covid Tracking Project.
  • As of Wednesday, there were 12,518 Covid-19 patients in ICUs, the highest number since May 5. The U.S. death toll approached 242,000 as nearly 2,000 new fatalities were reported—the most since May 6, according to Johns Hopkins.

New York Sets Curfew for Bars, Restaurants, Gyms as Covid-19 Cases Rise – Wall Street Journal, 11/12/20

  • New York will set a 10 p.m. curfew for most bars and restaurants and will limit gatherings at private residences to 10 people, Gov. Andrew Cuomo said Wednesday, as the number of novel coronavirus cases and hospitalizations continued to rise around the state.
  • The new restrictions take effect on Friday, and come two weeks before Thanksgiving, possibly throwing a wrench in some families’ holiday plans.
  • In the entire state, officials identified another 4,820 coronavirus infections—representing 2.93% of the tests processed on Tuesday, state officials said.

Biden Covid advisor says U.S. lockdown of 4 to 6 weeks could control pandemic and revive economy – CNBC, 11/12/20

  • Shutting down businesses and paying people for lost wages for four to six weeks could help keep the coronavirus pandemic in check and get the economy on track until a vaccine is approved and distributed, said Dr. Michael Osterholm, a coronavirus advisor to President-elect Joe Biden.
  • A nationwide lockdown would drive the number of new cases and hospitalizations down to manageable levels while the world awaits a vaccine, he told Yahoo Finance on Wednesday.
  • “We could pay for a package right now to cover all of the wages, lost wages for individual workers, for losses to small companies, to medium-sized companies or city, state, county governments. We could do all of that,” he said. “If we did that, then we could lock down for four to six weeks.”
  • Osterholm was appointed to Biden’s 12-member Covid “advisory board” on Monday.

Boeing raises 20-year forecast for China aircraft demand despite pandemic – Reuters, 11/12/20

  • Boeing on Thursday raised its rolling forecast for China’s aircraft demand for the next 20 years, making the country a bright spot in the aviation market even as COVID-19 decimates global deliveries over the next few years.
  • Chinese airlines will need 8,600 new airplanes through 2039, 6.3% higher than Boeing’s previous prediction of 8,090 planes last year. Those would be worth $1.4 trillion based on list prices, the U.S. planemaker said in a statement.
  • Boeing projected a need for 6,450 new single-aisle airplanes over the next 20 years, while China’s widebody fleet will require 1,590 new planes, accounting for 18% of the total deliveries, which fell from a year ago due to anticipation of a slower recovery in global long-haul traffic.
  • China’s domestic aviation market has rebounded to pre-COVID levels but as international travel remains effectively shut down, Chinese airlines have been pushing back deliveries.

Facebook and Google Extend Bans on Political Ads – Wall Street Journal, 11/12/20

  • Facebook and Alphabet’s Google plan to continue banning political ads on their platforms for the next several weeks to prevent confusion about election results, according to people familiar with the matter and an email reviewed by The Wall Street Journal.
  • Facebook told advertisers in an email on Wednesday it plans to continue its postelection ban on political ads for “another month.” Google representatives have told some advertisers it is unlikely to lift its ban in November or December, the people said.
  • “While multiple sources have projected a presidential winner, we still believe it’s important to help prevent confusion or abuse on our platform,” according to the email Facebook sent on Wednesday.

TikTok Asks Court to Put Off U.S. Order to Divest – Wall Street Journal, 11/12/20

  • TikTok and its Chinese parent company are asking a federal appeals court in Washington, D.C., for additional time to work out a potential divestiture of the popular video-sharing app, in the midst of signs that the company is settling in for a longer fight with the U.S. government.
  • With the Trump administration’s Thursday deadline looming for a restructuring or shutdown of TikTok, it appeared the government was losing at least some of its leverage over the app’s owner.
  • Already, a federal district court judge in Philadelphia has enjoined enforcement of the shutdown option, taking away the government’s main weapon in forcing a divestiture.
  • The new suit, if it succeeds, broadens the legal assault by TikTok and parent company ByteDance Ltd. by asking the courts to overturn the government’s legal basis for ordering the divestiture as well.

EV maker Rivian reveals pricing, details for electric pickup, SUV – Reuters, 11/11/20

  • Electric vehicle startup Rivian on Wednesday revealed pricing and product details for its electric pickup truck and SUV, with deliveries for both EVs scheduled for next year.
  • The launch editions of the electric R1T pickup and R1S SUV were priced at $75,000 and $77,500, with a 300-mile driving range on both vehicles.
  • Pre-order holders will get early access on Nov. 16 to configure their vehicle color, battery range as well as wheels and tires.
  • Rivian, which is backed by Amazon.com and Ford Motor, said U.S. deliveries for R1T would start in June 2021, while the R1S deliveries would begin in August.

US ECONOMY & POLITICS

U.S. Unemployment Claims Slip but Hold at High Levels – Wall Street Journal, 11/12/20

  • New applications for unemployment benefits fell sharply last week, suggesting layoffs are easing as the broader economy flashes signs of improvement.
  • Initial claims for jobless benefits, a proxy for layoffs, declined to 709,000 last week from 757,000 a week earlier, the Labor Department said Thursday.
  • The number of people collecting unemployment benefits through regular state programs, which cover most workers, dropped to 6.8 million for the week ended Oct. 31 from 7.2 million a week earlier.
  • Thursday’s report from the Labor Department provides data on unemployment claims filed through regular state programs, as well as details from two pandemic-specific programs first implemented in March.
  • The larger of those programs—available to the self-employed, gig workers and others not typically eligible for unemployment aid—paid benefits to 9.4 million workers in the week ended Oct. 24, according to the Labor Department.
  • A second pandemic program pays 13 additional weeks of benefits to individuals who have exhausted regular unemployment benefits.
  • The number of workers claiming benefits through this program increased to 4.1 million in late October, the highest level since the program started this spring.

U.S. Consumer Prices Unchanged in October – Wall Street Journal, 11/12/20

  • U.S. consumer prices were flat in October following four straight months of gains, a sign of subdued inflation as coronavirus cases again climbed across the U.S.
  • The consumer-price index—which measures what consumers pay for everyday items including groceries, clothing and vehicles—was unchanged in October from September, the Labor Department said Thursday.
  • Excluding the often-volatile categories of food and energy, so-called core prices were also flat.

President-Elect Joe Biden Selects Ron Klain as His White House Chief of Staff – Wall Street Journal, 11/11/20

  • President-elect Joe Biden has chosen Ron Klain as his White House chief of staff, turning to a longtime adviser and Ebola czar under President Obama as he prepares his incoming administration’s response to the coronavirus pandemic.
  • Mr. Klain, 59, served as chief of staff to then-Vice President Biden from 2009 to 2011 and previously worked as chief of staff to Vice President Al Gore. During the Obama administration, he played a behind-the-scenes role in the administration’s economic-recovery efforts and the passage of the Affordable Care Act.
  • Mr. Klain’s work with Mr. Biden has spanned more than three decades, beginning with roles in the 1980s on the Senate Judiciary Committee while Mr. Biden served as chairman and on Mr. Biden’s first presidential campaign in 1987.

Georgia to Recount All Votes in Presidential Race by Hand – Wall Street Journal, 11/11/20

  • Georgia officials said Wednesday they would hold a rare, by-hand recount of the state’s 5 million votes for president, a move that comes amid a close margin as other states are winding down their official counts.
  • Georgia Secretary of State Brad Raffensperger, a Republican, said that state law requires him to certify the election results by Nov. 20.
  • Reached Wednesday evening, Mr. Raffensperger said he didn’t believe the recount would change the vote tally in Georgia.
  • “I have faith in the accuracy of the electronic voting machines,” he said, adding, “I believe the results are accurate.”
  • The Republican president and his allies have said they would wait for all the votes in key states to be counted and certified before they accept the results, a process that they may try to slow with their legal challenges.

GOP Keeps Alaska Senate Seat as Attention Turns to Georgia – Wall Street Journal, 11/11/20

  • Republicans notched another Senate win on Wednesday, putting their majority at 50-48 ahead of two runoff elections set for Georgia in January.
  • Alaska Sen. Dan Sullivan defeated independent Al Gross, the Associated Press said Wednesday, after Mr. Gross didn’t significantly cut into Mr. Sullivan’s large lead as absentee votes were tallied.
  • The AP also called President Trump as the winner in his race, where he led 57% to 39% over Democrat Joe Biden.
  • Two runoff races in Georgia in January will determine which party controls the chamber. If Democrats win both seats and make it 50-50, Vice President-elect Kamala Harris, in her role as president of the Senate, could cast any tiebreaking votes.

Smaller House Majority Poses Headaches for Democrats – Wall Street Journal, 11/11/20

  • Democrats’ majority in the House is set to be their tightest since World War II, limiting their room to maneuver on legislation with President-elect Joe Biden and possibly raising tensions between centrist and progressive lawmakers.
  • Heading into the election, Democrats had a majority of 232 to 197, with one Libertarian and five open seats. That balance is now at 218 Democrats to 202 Republicans, with the Associated Press calling the majority for Democrats when they hit 218 late Tuesday.
  • Republicans are leading in several undecided races, meaning the parties could end up separated by less than 10 seats.
  • Democrats’ thin majority could force party leaders to walk a fine line on legislating and force them to pull in Republican votes on must-pass items, such as spending or defense bills, if leadership is unable to bring the party’s left flank on board.
  • The last time Democrats had this small an expected majority was during the 1943-1945 session, according to House records.

EUROPE & WORLD

U.K. on Course for Weakest Performance Among Advanced Economies – Wall Street Journal, 11/12/20

  • The British economy expanded at a weaker pace than its European peers in the third quarter, highlighting the outsize toll the coronavirus pandemic is taking on the U.K.
  • The U.K. economy grew 15.5% in the three months through September, the country’s Office for National Statistics said Thursday, as consumers and businesses emerged from the nationwide lockdowns imposed in the spring to halt the spread of the virus.
  • The result is the U.K. is trailing its peers in its recovery. U.K. economic output at the end of the third quarter was 9.7% lower than it was at the end of 2019 before the virus emerged out of China and spread around the globe.
  • That shortfall is twice that recorded in France, Germany and Italy, and almost three times that reported in the U.S.

Gaming boom plays into Tencent’s hands with 89% profit rise – Reuters, 11/12/20

  • Tencent’s blockbuster game and solid advertising drove an 89% rise in quarterly profit at the Chinese gaming and social media group, helping it to beat forecasts on Thursday.
  • Revenue rose 29% to 125.4 billion yuan.
  • Tencent said revenue from its cloud and other business services, a potential future growth engine, grew more slowly as a result of the lingering impact of the pandemic, with delays in areas such as project deployment and new contract sign-ups.
  • Tencent reported a return to normal in advertising activity after the outbreak of the COVID-19 pandemic, with rapid growth in sectors such as education, internet services and e-commerce.
  • With its flagship game Honour of Kings reporting a record 100 million daily active users in the first 10 months of 2020, Tencent, the world’s largest gaming firm by revenue, has benefited from growth of paying users for video games.
  • Tencent said on Thursday its profit was 38.5 billion yuan ($5.8 billion) for the three months through September.
  • That was ahead of an analyst average estimate of 30.81 billion yuan, data from Refinitiv showed.

Foxconn sees strong iPhone 12 demand, reiterates U.S. investment – Reuters, 11/11/20

  • Apple supplier Foxconn forecast strong demand for the new iPhone 12 in the holiday quarter and stressed that it would continue investing in the United States as scheduled and is looking at making new products there.
  • Chief Financial Officer David Huang said third-quarter revenue fell 7% due to clients delaying product launches.
  • It booked July-September net profit of T$30.8 billion ($1.08 billion), Reuters calculations showed based on nine-month figures, versus T$30.7 billion a year earlier.
  • That compared with the T$28.61 billion average of 13 analyst estimates compiled by Refinitiv.
  • Still, Liu said Foxconn saw “stronger than expected” demand for both smartphones and servers, with strong shipments of Apple’s new iPhone 12 supporting revenue.

Merck KGaA lifts earnings guidance on demand for lab tools – Reuters, 11/12/20

  • Healthcare and chemicals group Merck lifted its guidance for full year earnings after the scramble to ready treatments and vaccines against the coronavirus bolstered demand for its supplies for biotech labs.
  • In the third quarter, adjusted core profit for the group, or earnings before interest, taxes, depreciation and amortization (EBITDA), jumped more than 50% to 1.7 billion euros, beating the average estimate of 1.6 billion in an analyst poll posted on its website.
  • Core earnings before special items in 2020 will likely be between 5.05 billion euro ($5.94 billion) and 5.25 billion euros, The German group said in a statement on Thursday, also citing the release of provisions worth 365 million after winning a legal dispute with Biogen BIIB.O.
  • Merck previously predicted a range for 2020 of 4.45 billion to 4.85 billion euros, up from 4.39 billion a year earlier.

Alibaba Sets ‘Singles Day’ Sales Record – Wall Street Journal, 11/11/12

  • Chinese consumers stayed glued to their phones Wednesday, spending billions of dollars on items such as Taylor Swift-branded jackets, Apple iPhones and prepaid beach vacations, in a test of Chinese consumer confidence after the disruptions of the coronavirus pandemic.
  • By the end of Nov. 11, also known as Singles Day, Alibaba, the Chinese technology giant, said it had raked in the equivalent of a record $75.1 billion.
  • China boasts roughly 749 million online shoppers, according to state agency China Internet Network Information Center, more than twice the total population of the U.S.

Factmonster – TODAY in HISTORY

  • Leon Trotsky was expelled from the Communist Party and Joseph Stalin became the ruler of the Soviet Union. (1927)
  • The World War II battle of Guadalcanal begins. (1942)
  • Ellis Island stopped serving as the chief immigration station for the United States. Twenty million immigrants went through Ellis Island in its 62 years of operation. (1954)

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Historical performance is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

All investing involves risk including loss of principal. No strategy assures success or protects against loss. Any economic forecasts set forth may not develop as predicted.

All company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Material presented is excerpts derived from third party content and you may need a subscription to access the full the content. The views and opinions expressed are those of the authors and do not necessarily reflect the views of Pence Wealth Management or LPL Financial.

Prior to making any investment decision please consult your financial advisor regarding your specific situation.

Recent Tweets

Categories

Tags