US FINANCIAL MARKET
Dow on Track to Finish Best Month in Over Three Decades – Wall Street Journal, 11/30/20
- U.S. stocks are on track to complete a banner November, giving the Dow Jones Industrial Average its best month in more than 33 years, as investors cheer the prospect of Covid-19 vaccines halting the pandemic and fresh stimulus spending to bolster the economy.
- Two main factors have fueled the latest leg up in markets, according to investors.
- The development of three vaccines in the West has opened up the possibility that the economic disruption caused by the coronavirus will end in 2021.
- Signs that President-elect Joe Biden will make a relatively smooth transition into the White House have doused some of the political uncertainty that had fed into heightened market volatility in the fall.
- Shares of drugmaker Moderna jumped 16% Monday after saying it would ask U.S. and European health regulators on Monday to authorize use of the company’s Covid-19 vaccine.
- IHS Markit rose 6.3% after the data provider said it would combine with S&P Global in a deal that values IHS Markit at $44 billion, including debt. The all-stock deal is the largest of the year.
Coronavirus Live Updates: U.S. Cases Fall, but Officials Warn of Dire Weeks to Come – Wall Street Journal, 11/30/20
- The U.S. added fewer newly reported Covid-19 cases Sunday than in previous days, following a Thanksgiving holiday that was the busiest travel period in the U.S. since the pandemic began.
- The nation reported 138,903 new cases for Sunday, according to data compiled by Johns Hopkins University.
- That is down from 155,596 a day before and the record-high 205,557 reported on Friday.
- Sunday’s figure was also a week-over-week decline, down from 142,734 on Nov. 22.
- The number of coronavirus-related hospitalizations nationwide again hit a record high, according to the Covid Tracking Project, with more than 93,000 admitted as of Sunday.
- Officials on Sunday warned that the situation would worsen over the next few weeks, with what Dr. Anthony Fauci, the Trump administration’s top infectious-disease expert, called a “surge upon a surge” of new cases.
Moderna to Ask Health Regulators to Authorize Its Covid-19 Vaccine – Wall Street Journal, 11/30/20
- Moderna said it will on Monday ask U.S. and European health regulators to authorize use of the company’s Covid-19 vaccine, after it was shown to be 94.1% effective in a full analysis of a pivotal study.
- The timing keeps the vaccine on track to become possibly the second to go into use in the U.S. by year’s end—after one already under regulatory review from Pfizer and BioNTech —with inoculation available to the general public likely in spring or summer.
- If the U.S. Food and Drug Administration clears the shot, distribution could start within weeks.
- Moderna expects a panel of outside experts advising the FDA to meet Dec. 17 to review the evidence for the company’s vaccine and vote on whether to recommend that the agency authorize its emergency use.
Black Friday Was a Bust for Many Stores, Better for Online – Wall Street Journal, 11/29/20
- U.S. shoppers went online to purchase holiday gifts and score Black Friday deals they once crowded into malls to grab, as the coronavirus pandemic accelerated the yearslong remaking of the U.S. retail landscape.
- Roughly half as many people visited stores on Black Friday as they did last year, according to research firms that track foot traffic.
- Meanwhile, online spending jumped 22% from a year ago, making it the second-best online shopping day ever measured by Adobe Analytics.
- On Black Friday online sales hit $9 billion, up 22% from last year, according to Adobe Analytics, which measures 80 of the top 100 U.S. e-commerce sites.
- The gain was near the low end of Adobe’s forecast, which had projected growth of between 20% and 42% from last year.
- Meanwhile, foot traffic to stores on Black Friday fell 48% this year from last year, said RetailNext, which provides cameras, software and analytics to thousands of U.S. stores and shopping centers.
- Sensormatic Solutions, another tracking firm with cameras in stores, said in-store traffic fell 52% on Black Friday compared with last year.
Cyber Monday set to be biggest online shopping day in U.S. history – Reuters, 11/30/20
- Cyber Monday is on track to bring in a record of as much as $12.7 billion in online sales, according to latest industry estimates, surpassing Black Friday’s digital numbers as U.S. retailers reached the last leg of an extended holiday selling season caused by the COVID-19 pandemic.
- Shoppers have seen nearly two months of offers from retailers looking to recover sales lost due to mall and store closures, while Amazon.com pushed back its annual summer promotional event to October, creating a longer than ever season.
- Estimates from Adobe Analytics, however, showed this year’s conclusion to Thanksgiving weekend promotions would still be the largest online sales day in history, with spending between $10.8 billion and $12.7 billion.
Thanksgiving Draws Travel to a Pandemic Peak – Wall Street Journal, 11/30/20
- The weekend after Thanksgiving met expectations that it would be the busiest travel period in the U.S. since the coronavirus pandemic began, aided by clement weather and lower gas prices that encouraged some to drive rather than fly.
- Almost 50 million people were expected to have made a journey during the Thanksgiving holidays, said AAA, despite tightening local clampdowns and warnings from federal health officials.
- The Transportation Security Administration said that its workers screened more than 964,000 people on Saturday, down 37% from a year earlier, and more than a million on Nov. 25, the busiest flying day since March.
- TSA said that it expected screenings on Sunday to be higher than that.
- The AAA forecast road journeys would be down around 4% from last year, even as gas prices fell to their lowest level since 2015, averaging $2.13 a gallon for regular on Nov. 29.
Facebook, Google to Face New Antitrust Suits in U.S. – Wall Street Journal, 11/30/20
- Big Tech’s legal woes are expected to worsen in the coming weeks as federal and state antitrust authorities prepare to file new lawsuits against Facebook and Alphabet’s Google, people familiar with the matter said.
- The authorities are readying as many as four more cases targeting Google or Facebook by the end of January, these people said, following the Justice Department’s antitrust lawsuit against Google last month.
- If Facebook were to be sued, it would mark the first government antitrust action against the social-media titan in the U.S.
- Facebook has come under particular criticism from Republicans and Democrats in Congress as well as President-elect Joe Biden over its content-moderation policies.
- Democrats generally contend the company has been too lax in policing misleading speech, while Republicans say Facebook has sometimes suppressed conservatives.
- Facebook has said it aims to support free speech while limiting hate speech and other harmful content.
Facebook Nears Purchase of Startup in Deal That Values It at $1 Billion – Wall Street Journal, 11/30/20
- Facebook is nearing a deal to buy Kustomer, a startup that specializes in customer-service platforms and chatbots, according to people familiar with the matter.
- The deal, which could be completed as soon as Monday afternoon assuming talks don’t fall apart, would value New York-based Kustomer at a little over $1 billion, the people said.
- Closely held Kustomer was valued at $710 million in a private funding round roughly a year ago, according to PitchBook.
S&P Global Agrees to Buy IHS Markit for About $44 Billion – Wall Street Journal, 11/30/20
- S&P Global agreed to acquire IHS Markit for about $44 billion, the companies said Monday, a landmark deal that would combine two of the largest providers of data to Wall Street.
- The all-stock deal, whose price tag includes $4.8 billion of net debt, is the largest of the year by that measure.
- The companies said IHS Markit shareholders will receive 0.2838 share of S&P Global stock for each IHS share under the agreement reached. S&P Global shareholders will own approximately 68% of the combined company.
- The transaction carries a relatively small premium of less than 5% over IHS Markit’s closing price Friday, but its investors cheered nonetheless, sending the stock up more than 7% in early trading Monday.
General Motors Will No Longer Take a Stake in Nikola – Wall Street Journal, 11/30/20
- General Motors will no longer take an equity stake in electric-truck maker Nikola under a stripped-down agreement revealed Monday by the two companies.
- GM still intends to provide Nikola with fuel-cell technology but the Detroit auto maker has scrapped plans to build an electric pickup truck named the Badger for the Phoenix-based startup—a key part of an earlier agreement outlined in September.
- Nikola shares were down about 21% in Monday morning trading after releasing details about the nonbinding memorandum of understanding with GM.
- Under their original deal, GM was to take an 11% equity stake in the startup in exchange for supplying engineering work and other services.
- GM also was to engineer and build the electric pickup truck for retail customers, using the auto maker’s proprietary technology for battery-powered vehicles.
OPEC meets over whether to extend oil cuts as virus hits demand – Reuters, 11/30/20
- OPEC held talks on Monday on whether to extend existing oil cuts for three to four months or lift output gradually from January, as the coronavirus crisis continues to pummel fuel demand.
- Officials from the Organization of the Petroleum Exporting Countries, Russia and others, a group known as OPEC+, held informal talks on Sunday before two days of formal meetings began on Monday. But they failed to agree on policy for 2021.
- OPEC+ had been due to ease existing production cuts by 2 million barrels per day (bpd) from January 2021, but a second coronavirus wave has reduced demand for fuel around the world, prompting a rethink among members of the group.
- OPEC+ is considering extending existing cuts of 7.7 million bpd, about 8% of global demand, into the first months of 2021, a position backed by OPEC’s de-facto leader Saudi Arabia and other major producers, OPEC+ sources told Reuters.
US ECONOMY & POLITICS
October pending home sales fall unexpectedly, as high prices take their toll on buyers – CNBC, 11/30/20
- Strong, pandemic-induced demand for housing is still there, but buyers may now be hitting an affordability wall.
- Pending home sales fell 1.1% month-to-month in October but were 20.2% higher compared with October 2019.
- The growing imbalance has prompted bidding wars and caused the median price of an existing home to jump to the highest level ever in October, according to the Realtors. At $313,000, it was up 16% annually.
- Supply is especially lean on the low end of the market.
- The number of homes for sale at the end of October was down nearly 20% annually and represented just a 2.7-month supply at the current sales pace.
Joe Biden Fills Out His Economic Team – Wall Street Journal, 11/29/20
- President-elect Joe Biden intends to nominate a team of liberal and centrist economic advisers to serve alongside planned Treasury Secretary nominee Janet Yellen, people familiar with his plans said Sunday, as he prepares to confront the economic fallout from the coronavirus pandemic.
- Mr. Biden has chosen Neera Tanden, head of the Center for American Progress, a center-left think tank, to serve as director of the Office of Management and Budget.
- The former vice president has picked Cecilia Rouse, a Princeton University labor economist, to be chairwoman of the Council of Economic Advisers, these people said.
- The president-elect has selected Adewale “Wally” Adeyemo, a former senior international economic adviser during the Obama administration, to serve as Ms. Yellen’s top deputy at the Treasury Department.
- And he will turn to two campaign economic advisers, Jared Bernstein and Heather Boushey, to serve as members of the CEA alongside Ms. Rouse, the people said.
Federal Reserve Extends Four Emergency Lending Programs – Wall Street Journal, 11/30/20
- The Federal Reserve on Monday said it had extended through next March four backstop lending programs that helped to stabilize short-term funding markets when the coronavirus pandemic hit this past spring.
- The extensions were widely expected and don’t apply to any of the lending programs that the Treasury Department earlier this month said it would not renew.
- Treasury Secretary Steven Mnuchin on Nov. 19 told Fed Chairman Jerome Powell that he would not grant extensions for five lending programs that have backstopped markets for corporate and municipal debt and to purchase loans made to small businesses and nonprofits when those programs expire on Dec. 31.
Exclusive: Trump to add China’s SMIC and CNOOC to defense blacklist – sources – Reuters, 11/29/20
- The Trump administration is poised to add China’s top chipmaker SMIC and national offshore oil and gas producer CNOOC to a blacklist of alleged Chinese military companies, according to a document and sources, curbing their access to U.S. investors and escalating tensions with Beijing weeks before President-elect Joe Biden takes office.
- It was not immediately clear when the new tranche would be published in the Federal Register.
- But the list comprises China Construction Technology Co and China International Engineering Consulting Corp, in addition to Semiconductor Manufacturing International Corp (SMIC) and China National Offshore Oil Corp (CNOOC), according to the document and three sources.
- The upcoming move, coupled with similar policies, is seen as seeking to cement outgoing Republican President Donald Trump’s tough-on-China legacy and to box incoming Democrat Biden into hardline positions on Beijing amid bipartisan anti-China sentiment in Congress. The Biden campaign declined to comment.
EUROPE & WORLD
Measures of Chinese Economic Activity Signal Widening Recovery – Wall Street Journal, 11/30/20
- Gauges of China’s manufacturing and nonmanufacturing activity climbed to their highest levels in three and eight years, respectively, signaling a broadening recovery in the world’s second-largest economy nearly a year after the coronavirus began its spread.
- The official manufacturing purchasing managers index, a key measure of factory activity, rose to 52.1 in November from 51.4 in October, according to data released Monday by the National Bureau of Statistics.
- The subindex measuring production increased to 54.7 from 53.9 in October while total new orders, the gauge’s main driver, rose to 53.9 after remaining unchanged for two months at 52.8.
- And the export-orders component increased to 51.5 in November, up from 51.0, remaining above the 50 mark for three straight months.
- Meanwhile, China’s nonmanufacturing PMI, which includes services and construction activity, rose in November to 56.4, its highest level since June 2012, from a previous reading of 56.2 in October, the statistics bureau said.
UK shopper numbers down 56.9% as English lockdown takes toll – Reuters, 11/30/20
- Total shopper numbers across British retail destinations were down 56.9% in the week to Nov. 28 year-on-year, reflecting the impact of a third full week of England’s national COVID-19 lockdown, market researcher Springboard said on Monday.
- It said that on a week-on-week basis shopper numbers, or footfall, rose by 4.8%.
- The fossilized remains of a female human ancestor named Lucy (after the Beatles song Lucy in the Sky with Diamonds) were found in Ethiopia. (1974)
- The Brady Bill, requiring a five-day waiting period for handgun purchases, is signed. (1993)