US FINANCIAL MARKET

U.S. Stocks Climb as Investors Bet on Stimulus – Wall Street Journal, 12/4/20

• U.S. stocks rose Friday as investors hoped new data showing a slowdown in the labor market’s recovery would fuel prospects for additional fiscal stimulus.
• Investors this week have closely followed the revival of negotiations in Washington over a new coronavirus aid package.
• They are also monitoring data on Covid-19 infections and deaths, as well as reports about progress toward vaccine approval and distribution.
• Figures released Friday by the Bureau of Labor Statistics showed that employers added 245,000 jobs last month, down from the 638,000 jobs added in October and below economists’ expectations. The unemployment rate declined to 6.7% from 6.9% in October.
• Newly reported Covid-19 cases in the U.S. hit a record high Thursday, as did deaths reported in a day, as the global death toll from the coronavirus pandemic passed 1.5 million.
• Hospitalizations also hit a record, with 100,667 people in the U.S. admitted as of Thursday, according to the Covid Tracking Project.
• Investors are increasingly optimistic about momentum for a roughly $900 billion compromise Covid-19 relief plan to be pushed through Congress before the Christmas holiday, though differences remain over parts of the proposal.
• In bond markets, the yield on the 10-year U.S. Treasury note ticked up to 0.969%, from 0.919% on Thursday.

Coronavirus Live Updates: U.S. Infections, Deaths, Hospitalizations All Hit Record Highs – Wall Street Journal, 12/4/20

• Newly reported Covid-19 cases in the U.S. hit a record high, as did deaths reported in a day, as the global death toll from the coronavirus pandemic passed 1.5 million.
• Hospitalizations also hit a record, with 100,667 people in the U.S. admitted as of Thursday, according to the Covid Tracking Project. Of those, a record 19,442 people were in intensive care.
• The country reported 217,664 new cases on Thursday, according to data compiled by Johns Hopkins University, up from 200,055 on Wednesday, and surpassing the previous record of 205,557 set Friday last week.
• Newly reported deaths also surged Thursday, to 2,879, according to Johns Hopkins data, the second daily record in a row.
• The U.S. reported 2,804 deaths on Wednesday.
• California, which leads the U.S. in total cases, set another record for newly reported cases in a day on Thursday, with 21,368, according to Johns Hopkins data.
• Gov. Gavin Newsom has said the state would issue new stay-at-home orders in regions where hospital intensive-care unit availability drops below 15%.
• Illinois and Texas led the nation in new fatalities, reporting more than 200 deaths each on Thursday, just as they did Wednesday, Johns Hopkins data show.
• A number of other states—including Colorado, Iowa and Nevada—all recorded their highest number of daily deaths since the pandemic began.
• The seven-day average of new deaths in the U.S. nearly doubled to 1,603 on Wednesday from 828 on Nov. 1, reaching its highest level since May 11, according to a Wall Street Journal analysis of data from Johns Hopkins.

California governor issues regional lockdown plans as ICUs near capacity – Reuters, 12/3/20

• California’s governor on Thursday announced plans to impose COVID-19 stay-at-home orders on a regional basis, with tougher social and economic restrictions to be triggered when intensive care units near maximum capacity at a region’s hospitals.
• The latest constraints, unveiled as infections and hospitalizations soared further, will take effect after 48 hours in any of five designated geographic regions where available ICU space falls to 15% of capacity or less, Governor Gavin Newsom said.
• Newsom said he expects all portions of the state outside the San Francisco Bay Area to reach their respective 15% thresholds this week. The Bay area is expected to follow by mid- to late-December.
• Each region is to remain under its stay-at-home order for at least three weeks once they are imposed.
• The latest order will direct residents to remain at home and avoid travel except as necessary for permitted activities, such as grocery shopping, medical appointments, dog walks and individual outdoor exercise.
• Restaurants will be limited to takeout and pickup service, while bars, breweries and distilleries will be shuttered, along with fitness centers, hair salons, barber shops, casinos and nail parlors.
• Retail establishments may remain in business while limited to 20% of capacity, with hotels permitted to stay open to support “critical infrastructure” only.
• Office workplaces will be closed except for essential sectors where remote working is impossible.
• Public schools with in-classroom instruction already in place may remain open.

Pfizer Slashed Its Original Covid-19 Vaccine Rollout Target After Supply-Chain Obstacles – Wall Street Journal, 12/4/20

• When Pfizer said last month it expects to ship half the Covid-19 vaccines it had originally planned for this year, the decision highlighted the challenges drug makers face in rapidly building supply chains to meet the high demand.
• Pfizer and Germany-based partner BioNTech had hoped to roll out 100 million vaccines world-wide by the end of this year, a plan that has now been reduced to 50 million.
• Pfizer had its 100-million dose goal in place until mid-November, when it became clear the supply-chain hurdles were too great for the end-of-the-year timeline.

American Airlines sees fourth-quarter cash burn at high end of guidance – Reuters, 12/4/20

• American Airlines said on Friday it expects its fourth-quarter average daily cash burn to be at the high end of its previously forecasted range of between $25 million and $30 million.
• The U.S. airline industry is still losing billions of dollars every month as travel demand remains weak and recent coronavirus travel advisories have discouraged holiday travel.
• The U.S. airline now expects to end the fourth quarter with about $14 billion in total available liquidity.
• Delta Air Lines warned on Thursday it would lose about $2 million more than forecast each day in the fourth quarter, but kept a target to halt its cash burn next spring.

Boeing again cutting widebody production rate – Reuters, 12/4/20

• Boeing is reducing its 787 widebody production to five jets monthly in mid-2021 from six, and delivered zero 787s to customers in November, as longer-haul travel demand remains weakened by the coronavirus pandemic, the U.S. planemaker’s Chief Financial Officer said on Friday.
• Boeing’s Greg Smith also told a conference that there is no “normal profile” currently for jet pre-delivery payments or PDPs, which are tied to production rates. Boeing has been forced to cut production due to the 20-month grounding of its cash cow 737 MAX after fatal crashes and the pandemic downturn.
• “I think we’ve got a couple years here where PDPs will be a little bumpy,” Smith said.

Investors Circle Largest Corporate Cash Hoard Ever – Wall Street Journal, 12/4/20

• U.S. companies are sitting on the largest pile of cash ever. Investors are trying to gauge how they are going to use it.
• Cash holdings at nonfinancial companies grew to a record $2.1 trillion at the end of June, according to a recent report from Moody’s Investors Service.
• That is up 30% from that time last year and higher than the previous peak of nearly $2 trillion in 2017.
• As of Nov. 30, companies had sold more than $2 trillion of investment-grade and high-yield bonds—the most on record in data going back to 2006—according to LCD, a unit of S&P Global Market Intelligence.

Warner Bros. to Release All 2021 Films on HBO Max and in Theaters Simultaneously – Wall Street Journal, 12/3/20

• Warner Bros., the Hollywood studio founded as a Pennsylvania nickelodeon in 1903 and responsible for classics like “Casablanca,” signaled Thursday that the entertainment industry’s future isn’t in the theater, but in the living room.
• The AT&T -owned studio said it would release its entire 2021 slate of theatrical films simultaneously in theaters and on its HBO Max streaming service, the most drastic step yet taken by a major studio as the coronavirus pandemic continued to move Hollywood’s focus away from movie theaters and toward in-house streaming services.
• The strategy covers all 17 movies scheduled for release by the studio next year, including big-budget films such as the science-fiction adaptation “Dune” and a new installment in the “Matrix” franchise.
• HBO Max will host the movies for only their first month of theatrical release before the films follow their usual distribution pattern.
• Warner Bros. executives emphasized that the changes announced Thursday only applied to 2021 films.
• Outside the U.S., the films will be released exclusively in movie theaters and later move to streaming.

More than 400 lawmakers from 34 countries back ‘Make Amazon Pay’ campaign – Reuters, 12/4/20

• More than 400 lawmakers from 34 countries have signed a letter to Amazon.com boss Jeff Bezos backing a campaign that claims the tech giant has “dodged and dismissed … debts to workers, societies, and the planet,” organizers said.
• The “Make Amazon Pay” campaign was launched on Nov. 27 – the annual Black Friday shopping bonanza – by a coalition of over 50 organizations, with demands including improvements to working conditions and full tax transparency.
• The letter’s signatories include U.S. Congresswomen Ilhan Omar and Rashida Tlaib, former UK Labour Party leader Jeremy Corbyn and Vice President of the European Parliament Heidi Hautala, co-convenors Progressive International and UNI Global Union said.
• Amazon, the world’s biggest retailer, has faced criticism for its tax practices before, including in the UK and the EU.
• It says its profits remain low given retail is a highly competitive, low margin business and it invests heavily.