US FINANCIAL MARKET

Dow Edges Higher on Vaccine Optimism – Wall Street Journal, 11/18/20

• U.S. stocks edged higher Wednesday amid a mixed streak of earnings.
• Pfizer shares rose 2.7% early in the session. The drugmaker said Wednesday that final results from its joint clinical trial with BioNTech showed its coronavirus inoculation was 95% effective, and that it plans to seek authorization for the vaccine within days.
• Boeing jumped 4.7% after the U.S. cleared the plane maker’s 737 MAX for passenger flights, helping to resolve the plane maker’s biggest pre-pandemic crisis.
• Shares in Lowe’s dropped over 4.4% after the home-improvement retailer said it expects fourth-quarter adjusted operating income as a percentage of sales to be about flat compared with the prior-year period due to Covid-19-related operating expenses.
• Rival Target’s shares rose 2.3% after the retailer said sales rose steadily in its most recent quarter as demand for household goods and home-office supplies continued to grow during the pandemic.
• Federal Reserve Chairman Jerome Powell on Tuesday cautioned that the economy faces significant challenges and uncertainty because of the increased spread of the coronavirus.
• He also said it was too soon to say how a potential vaccine would change the outlook, with the possibility of widespread vaccination still many months away.

Coronavirus Live Updates: U.S. Cases Continue to Climb as States Restrict Activity – Wall Street Journal, 11/18/20

• The number of newly reported Covid-19 cases climbed to nearly 162,000, and hospitalizations set yet another record, as more states and municipalities imposed new restrictions.
• The U.S. reported 161,934 new cases on Tuesday, according to a Wall Street Journal analysis of data compiled by Johns Hopkins University, the 11th day in a row that newly reported cases have been above 130,000.
• Three states—California, Texas and Illinois—recorded more than 10,000 new infections.
• With cases on the rise, more states are implementing new restrictions on people’s activity. Ohio imposed on Tuesday a statewide curfew, requiring residents to stay at home from 10 p.m. to 5 a.m. Governors in Maryland, Delaware, Iowa and California have also announced new mitigation measures this week.
• Hospitalizations continue to surge, straining health-care systems in some places. There were 76,823 people admitted as of Tuesday, according to the Covid Tracking Project, a record and the eighth consecutive day above 60,000.
• Deaths, another lagging indicator of the virus’s spread, are also rising. The U.S. recorded 1,707 fatalities on Tuesday, the most single-day deaths since May 14, as the death toll from the pandemic approaches 250,000.

Pfizer Says Vaccine Is 95% Effective in Final Data, Will Seek Authorization – Wall Street Journal, 11/18/20

• An experimental Covid-19 vaccine from Pfizer and BioNTech was 95% effective in final results from a pivotal study and is showing signs of being safe, key pieces of data as the companies prepare to ask health regulators to authorize use.
• Out of 170 adult volunteers in the nearly 44,000-subject trial who developed Covid-19 with at least one symptom, 162 received a placebo, while eight got the vaccine, Pfizer and BioNTech said.
• Researchers haven’t found any serious safety issues, the companies said. The vaccine appeared to be well tolerated following a review of data from 8,000 study subjects, the companies said.

Target beats estimates as same-day delivery boosts online demand – Reuters, 11/18/20

• Target blew past analyst expectations for quarterly profit and sales on Wednesday as more Americans used the retailer’s quick-delivery services to buy everything from electronics to home goods during the COVID-19 pandemic.
• Total revenue surged 21.3% to $22.63 billion, beating estimates for $20.93 billion.
• Comparable sales, which include online and store sales, rose 20.7% in the third quarter ended Oct.31, trouncing expectations for an 11.31% increase, according to IBES data from Refinitiv.
• Comparable digital sales rose 155% in the third quarter, the company said, driven largely by same-day services like Drive up, Shipt or straight in-store pick ups, with more than 95% of sales being fulfilled through stores.
• Target’s net earnings rose to $1.01 billion, from $714 million a year earlier.
• On an adjusted basis, the company earned $2.79 per share, beating estimates for $1.60.

Lowe’s shares tumble as earnings fall short despite robust sales gains – CNBC, 11/18/20

• Lowe’s shares fell Wednesday after the home improvement retailer reported third-quarter earnings and a profit outlook slightly short of estimates, weighed down by higher labor costs and investments in its e-commerce business.
• Sales rose to $22.31 billion from $17.39 billion a year earlier, beating expectations for $21.25 billion.
• Same-store sales, which track sales online and at Lowe’s stores open for at least 12 months, surged 30.1%, topping estimates for 22.8% growth. Online sales rose 106%.
• For the quarter ended Oct. 30, net income fell to $692 million, or 91 cents a share, from $1.05 billion, or $1.36 per share, a year earlier.
• Lowe’s said it expects to earn between $1.10 and $1.20 per share during its fiscal fourth quarter, while analysts had been calling for earnings of $1.17 a share. It forecasts same-store sales to grow about 15% to 20%.

TJX beats estimates on HomeGoods strength, shares rise – Reuters, 11/18/20

• Discount store operator TJX Cos beat estimates for quarterly results on Wednesday, boosted by strong demand for home improvement products at its HomeGoods chain as well as activewear and beauty products during the COVID-19 pandemic.
• TJX’s overall third-quarter net sales fell about 3% to $10.12 billion, but they were above the Refinitiv estimate of $9.36 billion.
• U.S. same-store sales at its reopened HomeGoods stores rose 15% in the third quarter ended Oct. 31, cushioning the declines in its other units.
• Net income rose about 5% to $866.7 million, or 71 cents per share. Analysts had expected a profit of 40 cents.
• The chain also said same-store sales at its reopened stores in the first two weeks of the holiday quarter were down 7%, with about 470 stores – most of them in Europe — temporarily closed due to government mandates.
• TJX also said it expects to reinstate a quarterly dividend of 26 cents per share in the fourth quarter, representing a 13% increase from the amount it paid in March.

Boeing 737 MAX Cleared to Fly Again, but Covid-19 Has Sapped Demand – Wall Street Journal, 11/18/20

• The U.S. on Wednesday approved Boeing’s 737 MAX jets for passenger flights again after dual crashes took 346 lives, issuing a set of long-anticipated safety directives and notices to airlines globally that will help resolve the plane maker’s biggest pre-pandemic crisis.
• The FAA’s order for ungrounding allows Boeing to resume delivering the jets to airlines and lets them carry passengers, pending completion of certain mandatory fixes and additional pilot training requirements spelled out in related documents also released by the agency.
• But the pandemic has sapped demand for air travel, prompting airlines and aircraft-leasing firms to cancel about 10% of Boeing’s outstanding MAX orders this year. Boeing has said it believes hundreds more of its remaining 4,102 orders could be in jeopardy because of the financial health of some customers.
• The FAA, as expected, also set new requirements that FAA specialists—rather than Boeing officials—will need to sign off on the condition of each MAX before the manufacturer hands them over to customers.
• The manufacturer has estimated the crashes and the aftermath had cost it about $20 billion, which includes financial hits related to halting production earlier this year.

Apple Slashes App Store Fees for Smaller Developers – Wall Street Journal, 11/18/20

• Apple is halving the commission it charges smaller developers that sell software through its App Store, a partial concession in its battle with critics over how it wields power in its digital ecosystem.
• Starting next year, the iPhone maker said Wednesday, it will collect 15% rather than 30% of App Store sales from companies that generate no more than $1 million in revenue through the software platform, including in-app purchases.
• The fee will remain 30% for developers whose sales through the App Store, excluding commission payments, exceed $1 million—meaning the reduction won’t affect such vocal Apple opponents as videogame company Epic Games Inc.

Global debt to hit record $277 trillion by year end on pandemic spending splurge: IIF – Reuters, 11/18/20

• Global debt is expected to soar to a record $277 trillion by the end of the year as governments and companies continue to spend in response to the COVID-19 pandemic, the Institute of International Finance said in a report on Wednesday.
• The IIF, whose members include over 400 banks and financial institutions across the globe, said debt ballooned already by $15 trillion this year to $272 trillion through September.
• Governments – mostly from developed markets – accounted for nearly half of the increase.
• Developed markets’ overall debt jumped to 432% of GDP in the third quarter, from a ratio of about 380% at the end of 2019.
• Emerging market debt-to-GDP hit nearly 250% in the third quarter, with China reaching 335%, and for the year the ratio is expected to reach about 365% of global GDP.
• Total U.S. debt is on track to hit $80 trillion in 2020, the IIF report said, up from $71 trillion in 2019.
• In the Euro area, debt rose by $1.5 trillion to $53 trillion through September.