Daily Market Report | Nov. 13, 2020


Wall Street climbs as Cisco, Disney jump after results – Reuters, 11/13/20

  • Wall Street gained on Friday as Disney and Cisco’s upbeat results brought the focus back to corporate earnings at the end of a volatile trading week that saw record surges in coronavirus cases and increased hopes of a working vaccine.
  • Cisco Systems and Walt Disney were the top gainers among 30 Dow components, helping the blue-chip index rise 0.8%.
  • The network gear maker jumped 6.3% as it gained from a work-from-home driven surge in demand, while Disney rose 2.2% as its rapidly growing streaming video business, and a partial recovery at its theme parks limited its quarterly loss.
  • The third-quarter earnings season is in its final stretch with about 90% of S&P 500 companies having reported so far, according to Refinitiv IBES data.
  • Overall profit is expected to fall 7.8% from last year, a significant improvement from a 21.4% slump forecast on Oct. 1.
  • Wall Street’s major indexes broadly fell on Thursday as U.S. coronavirus cases jumped and investors weighed how fast an effective vaccine would be rolled out.
  • More than a dozen U.S. states reported a doubling of new COVID-19 cases in the last two weeks, with Chicago’s mayor issuing a month-long stay-at-home advisory on Thursday.

Coronavirus Live Updates: U.S. Cases Top 150,000 for First Time – Wall Street Journal, 11/13/20

  • The U.S. for the first time reported more than 150,000 new coronavirus cases in a single day, driven by record infection counts in more than a dozen states.
  • More than 153,000 new cases were recorded in the U.S. and the nation’s total topped 10.5 million, according to data compiled by Johns Hopkins University. California became the second state in the country after Texas to surpass one million total cases.
  • Illinois reported a record number of infections for the second day in a row. Ohio and Minnesota each topped 7,000 daily cases for the first time since the pandemic began, while Pennsylvania and Indiana reported more than 6,000 cases in a day, according to Johns Hopkins.
  • Other states recording all-time highs included Colorado, Utah, New Mexico, South Dakota, North Dakota, Oregon, New Hampshire and Vermont.
  • The number of people hospitalized due to Covid-19 rose to a record 67,096 for Thursday, according to the Covid Tracking Project.
  • Intensive-care units continued to face pressure.
  • As of Wednesday, there were 12,796 Covid-19 patients in ICUs, the highest number since May 2.
  • The U.S. death toll, meanwhile, surpassed 242,000 as more than 900 new fatalities were reported, according to Johns Hopkins.

Some Grocers Bring Back Purchase Limits as Covid-19 Cases Rise – Wall Street Journal, 11/13/20

  • Grocery stores are reinstating purchase limits on items like paper towels or soap for the first time since the spring, as consumers stock up on staples amid rising Covid-19 cases.
  • Kroger, the nation’s largest grocer, and Publix Super Markets, a chain of more than 1,200 stores in the Southeast, reinstated limits on bath tissue and paper towels last week. Kroger also brought back limits on hand soap and disinfectant wipes.
  • Even as outdoor dining becomes less available, retailers say hoarding levels won’t come close to where they were in the spring partly because consumers have already loaded their pantries.
  • Grocers expect cleaning wipes to remain scarce into 2021, and some anticipate a potential resurgence in sales of bleach.
  • Face masks and immunity-boosting products have started to sell more, too.

Has Disney put the worst of the pandemic behind it? – Reuters, 11/12/20

  • Walt Disney’s rapidly growing streaming video business and a partial recovery at its theme parks gave investors fresh hope on Thursday that the entertainment company had made it through the worst of the coronavirus pandemic.
  • Overall revenue fell 23% to $14.71 billion in the quarter, above analysts’ average estimate of about $14.2 billion.
  • One year after it launched the Disney+ online subscription to compete with Netflix, Disney said the service had signed up 73.7 million subscribers. Hulu had 36.6 million customers and ESPN+ had 10.3 million.
  • For the just-ended quarter, the streaming division lost $580 million, less than the $1.0 billion that analysts expected.
  • The parks and consumer products business lost $1.1 billion in operating income, less than analysts expected.
  • Movie studio profit slumped 61% to $419 million, as the company delayed major films until 2021 and many theaters remained closed.
  • At the media networks segment, the resumption of major sports helped boost ESPN.
  • The unit reported $1.9 billion in operating income, up 5% from a year earlier.
  • Disney’s adjusted loss per share, excluding one-time items, of 20 cents, also beat Wall Street expectations of a more drastic 70 cents per share loss.

Palantir results beat estimates in first quarter as public company – Reuters, 11/12/20

  • Palantir Technologies beat market expectations in its first quarter as a public company and raised its 2020 revenue forecast on Thursday, as it shored up large government and aerospace contracts.
  • Revenue rose 52% to $289.4 million in the quarter ended Sept. 30, exceeding analysts’ estimates of $279.4 million, Refinitiv IBES data showed.
  • Palantir said on Thursday it won 15 new deals in the third quarter, including those from the U.S. Army and National Institutes of Health, as well as a $300 million contract renewal with one of the world’s largest aerospace companies.
  • Net loss widened to $853.3 million, from a loss of $139.9 million a year earlier, hit by more than $800 million in costs, including expenses related to its direct listing.
  • The company, co-founded in 2003 by billionaire Peter Thiel, raised its 2020 revenue forecast to about $1.07 billion, from $1.05 billion to $1.06 billion.
  • It also said it expects annual adjusted operating income to be between $130 million and $136 million.

Cisco posts smaller-than-expected drop in quarterly revenue, shares rise – Reuters, 11/12/20

  • Cisco Systems on Thursday reported a smaller-than-expected drop in first-quarter revenue as more people working from home during the COVID-19 pandemic drove demand for its teleconferencing tools, networking equipment and cybersecurity products.
  • The company’s revenue fell 9% to $11.93 billion in the quarter ended Oct. 24.
  • The fall was slowed by the strength in its services segment, helping it beat analysts’ estimates of $11.85 billion, according to IBES data from Refinitiv.
  • Excluding items, Cisco earned 76 cents per share while analysts expected profit of 70 cents per share.

DraftKings stock jumps after reporting third-quarter beat, surge in users – CNBC, 11/13/20

  • Shares of sports betting company DraftKings jumped around 7% Friday after the company reported better-than-expected third quarter results and a surge in users.
  • Revenue: $133 million, vs $132 million expected, according to Refinitiv
  • The company said its monthly unique payers surpassed 1 million, a 64% increase compared to the same quarter a year ago.
  • Loss per share: 57 cents, vs 61 cents expected, according to a Refinitiv survey of analysts
  • The company also raised its fiscal year 2020 guidance to a range of $540 to $560 million, from a range of $500 to $540 million. DraftKings said it expects $750 million to $850 million in revenue for 2021.

WeWork losses mount but sees ‘seismic shift’ in office leasing to its favor – Reuters, 11/13/20

  • WeWork’s revenue declined but its cash burn slowed in the third quarter, a company memo showed on Thursday, as management expressed confidence the shared-workplace provider can weather the hit to the global office sector from COVID-19.
  • Quarterly revenue slid 8% from the second quarter to $811 million, while the company posted negative free cash flow of $517 million, less than $671 million of cash burn a quarter ago, WeWork said in the memo to employees seen by Reuters.
  • WeWork said member retention improved and renewal rates stabilized with the loss of desks in September at its lowest level since March when COVID-19 shut down businesses around the world and left office buildings vacant.


Consumer Sentiment Fell in First Half of November – Wall Street Journal, 11/12/20

  • The University of Michigan’s index of consumer sentiment dropped to 77.0 in the two weeks ended Nov. 10, from 81.8 in October.
  • Economists surveyed by The Wall Street Journal had expected a reading of 81.5.
  • The index of expectations drove the decline, falling to 71.3 from 79.2 in October.

Vegetables lift U.S. producer prices; trend remains moderate – Reuters, 11/13/20

  • U.S. producer prices increased for a sixth straight month in October amid more expensive food and gasoline, but the trend remained moderate, supporting views of tame inflation given labor market slack and a resurgence in new coronavirus cases.
  • The producer price index for final demand climbed 0.3% last month after rising 0.4% in September. A 0.5% increase in the price of goods accounted for nearly 60% of the rise in the PPI last month. Goods gained 0.4% in September.
  • In the 12 months through October, the PPI advanced 0.5% after rebounding 0.4% in September.
  • Excluding the volatile food, energy and trade services components, producer prices gained 0.2% in October.
  • In the 12 months through October, the core PPI increased 0.8%.

Home Prices Are Rising Everywhere in the U.S. – Wall Street Journal, 11/12/20

  • Home prices rose in every corner of the U.S. during the third quarter, as the pandemic boosted activity in a way not seen in recent history.
  • The median price for existing homes in each of the 181 metro areas tracked by the National Association of Realtors was higher in the third quarter from a year earlier, the association said Thursday.
  • This broad-based rally for single-family homes marked the first time since 1980 that every metro area tracked by NAR posted an annual price increase in the same quarter, NAR said.
  • Nationwide, the median single-family home price rose 12% from a year earlier to $313,500, NAR said.

Monthly U.S. Budget Gap More Than Doubled in October – Wall Street Journal, 11/12/20

  • The federal government ran a $284 billion budget deficit in the first month of the fiscal year, more than double the monthly shortfall a year ago, the Treasury Department said Thursday.
  • The U.S. budget gap rose 111% in October, due to higher federal spending last month on health-care and safety-net programs, and lower federal tax collection, according to monthly Treasury data.
  • Government outlays rose 37% to $522 billion, while revenue declined 3.2% to $238 billion.
  • The 12-month budget gap totaled $3.3 trillion last month, about 15.5% of gross domestic product.

More Outlets Give Biden Arizona Win – Wall Street Journal, 11/13/20

  • Major news outlets joined the Associated Press and Fox News in calling Arizona for Joe Biden late Thursday, with the president-elect ahead of President Trump by slightly less than 11,500 votes.
  • CNN, The New York Times and The Washington Post were some of the media outlets projecting Mr. Biden’s victory in the state, the first time a Democrat has won there since President Clinton in 1996.
  • Unlike some other battleground states where Mr. Biden’s lead grew as mail-in ballots were counted, in Arizona, the former vice president saw his margin of victory shrink since Election Day.
  • However, with just more than 10,000 ballots left to tabulate, according to the Secretary of State’s office, it would be impossible for Mr. Trump to overtake Mr. Biden. Arizona has 11 electoral votes.
  • Arizona voters also voted for Democrat Mark Kelly, a former astronaut, to replace GOP Sen. Martha McSally.

Trump Campaign Presses Election Claims in Pennsylvania, Arizona – Wall Street Journal, 11/12/20

  • The Trump campaign pressed ahead with its courtroom fight to contest election results, seeking to invalidate more than 10,000 votes in the Philadelphia area and asking an Arizona judge to block certification of the ballot count there.
  • President Trump’s legal effort also scored a largely symbolic victory Thursday, when a Pennsylvania judge ordered state election officials not to count ballots of certain voters whose proof of identification was received after Nov. 9.
  • The ruling affects a small subset of absentee and mail-in ballots that doesn’t begin to approach the roughly 53,000-vote lead in Pennsylvania held by President-elect Joe Biden.
  • Separately, in Georgia, Wisconsin and Michigan, groups of voters represented by a prominent conservative attorney have filed federal lawsuits in each of those states seeking to exclude several large and Democratic-heavy counties from each state’s final presidential-vote tally.
  • On Friday, a Pennsylvania judge is set to hear the Trump campaign’s challenge to more than 8,000 Philadelphia ballots with minor errors, part of an effort by the campaign to throw out mail-in and absentee ballots throughout the state.
  • In Arizona, a state court judge heard evidence Thursday in a Trump campaign lawsuit alleging some in-person votes cast in Maricopa County were improperly rejected.

Runoffs in Georgia Draw Flood of GOP Cash – Wall Street Journal, 11/12/20

  • The National Republican Senatorial Committee has combined with the campaigns of Georgia Sens. David Perdue and Kelly Loeffler to raise $32 million over the past six days, as they prepare for two runoff elections that will determine which party controls the U.S. Senate.
  • The Democratic Senatorial Campaign Committee declined Thursday to share its fundraising numbers, but the group has said it would commit to spending millions to register Georgians for the Jan. 5 runoffs and to get out the vote.
  • Georgia Democrat Stacey Abrams’s voting-rights group, Fair Fight, said Tuesday that GASenate.com had raised about $9.8 million for the runoffs since 7 p.m. last Friday.
  • The partisan breakdown in the postelection Senate is 50 Republicans and 48 Democrats. Democrats would need to win both Georgia races to achieve majority control of the chamber, since Vice President-elect Kamala Harris, in her role as president of the Senate, could cast tiebreaking votes.

Biden Labor Department to Focus on Executive Actions If GOP Keeps Senate – Wall Street Journal, 11/13/20

  • President-elect Joe Biden ran on an agenda he said would empower American workers, committing to raise the federal minimum wage and ease the path to join labor unions, but his ability to fully execute that vision is doubtful if Republicans retain control of the Senate.
  • Even without help from Congress, Mr. Biden could change circumstances for federal employees and contractors, allowing them to receive pay increases, and making it easier for them to get diversity training or join unions.
  • He has said he would seek to undo Trump administration regulations that made it easier for businesses to count workers as independent contractors who often aren’t eligible for certain worker protections and benefits.
  • Mr. Biden also could raise the minimum wage for federal contractors to $15 an hour, from $10.10 an hour, and scrap orders that restricted diversity training and pledges to hire minority candidates by contractors.


Asia-Pacific Countries Push to Sign China-Backed Trade Megadeal – Wall Street Journal, 11/13/20

  • China and 14 other Asia-Pacific nations seek to sign a trade deal this weekend that will knit their economies closer together—the second pact covering large swaths of the region whose signatories don’t include the U.S.
  • The agreement, the Regional Comprehensive Economic Partnership, or RCEP, could be signed Sunday. It would give a further boost to China’s economy, already benefiting from the country’s having controlled the coronavirus within its borders.
  • Mr. Biden said last year he would try to renegotiate the TPP. At best that won’t be fast or easy: Trading partners like Japan may require concessions, and many in the U.S. remain skeptical of big free-trade pacts.
  • Even before President Trump triumphantly withdrew from the TPP as one of his first official acts, it was effectively dead in the U.S.

Trump Bars Americans From Investing in Firms That Help China’s Military – Wall Street Journal, 11/12/20

  • President Trump signed an executive order prohibiting Americans from investing in a group of Chinese companies the U.S. says supply and otherwise support China’s military, intelligence and security services.
  • The order blocks American companies and individuals from owning shares directly or through funds that include any of 31 companies identified by the U.S. as aiding the modernization of the People’s Liberation Army, or PLA, and China’s intelligence and security services.
  • The order, which administration officials said has been under review for months, prohibits the purchase or investment in stocks, funds or other financial products that include the firms, starting Jan. 11. The order gives investors until November 2021 to divest themselves of any investments containing any of the Chinese securities.

Beijing Attacks America’s New Investment Blacklist -= Wall Street Journal, 11/13/20

  • Beijing condemned a move by President Trump to block American investments in some key Chinese companies, following a steep selloff in shares of several of the targets.
  • China’s government called the measures malicious, abusive and unreasonable. “This will seriously damage not only the legitimate rights and interests of Chinese enterprises, but also the interests of investors from other countries, including those from the U.S.,” said Wang Wenbin, a spokesman for the Ministry of Foreign Affairs.
  • The executive order rippled through markets on Friday, with shares in the listed subsidiaries of China’s three major phone and internet providers tumbling in Hong Kong trading, while bonds in affected companies also fell.

Factmonster – TODAY in HISTORY

  • Walt Disney’s Fantasia debuted. (1940)
  • The Supreme Court struck down laws calling for racial segregation on buses. (1956)

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