Daily Market Report | Dec. 09, 2020
U.S. Stocks Waver Amid Stimulus Bets – Wall Street Journal, 12/9/20
- U.S. stocks edged slightly lower Wednesday, suggesting that the major indexes may grind toward new all-time highs, as investors bet on fresh fiscal stimulus spending.
- Investors are optimistic Congress will pass another coronavirus relief package to bolster the economic recovery as rising infections prompt restrictions on social and business activity.
- The Trump administration proposed a $916 billion package on Tuesday after Democrats rejected an effort by Senate Majority Leader Mitch McConnell to narrow the scope of the bill.
- Lawmakers appear to be facing pressure to offer aid to those who have been hardest hit by the pandemic as infection levels and hospitalizations rise across the country. The U.S. reported more than 215,000 new cases for Tuesday.
- Some states have introduced fresh restrictions, triggering concern that the economic recovery could falter in the winter months.
- Investors are cautiously optimistic that the U.K. and European Union may strike a trade deal soon.
- British Prime Minister Boris Johnson is scheduled to talk face-to-face with European Commission President Ursula von der Leyen over dinner in Brussels.
- In corporate news, shares of FireEye fell 9.7% after the cybersecurity firm said it was breached by nation-state hackers.
- The attack compromised the software tools used to test the defenses of thousands of customers.
Coronavirus Live Updates: Newly Reported U.S. Cases Back Above 200,000 – Wall Street Journal, 12/9/20
- Newly reported coronavirus cases in the U.S. rose back above 200,000 and hospitalizations due to Covid-19 hit a record for the third day in a row.
- The U.S. reported more than 215,000 new cases for Tuesday, according to data compiled by Johns Hopkins University, the first time since Dec. 5 that the daily tally has topped 200,000.
- New cases in California surpassed 20,000 for the sixth consecutive day, while Virginia reported its second-highest daily tally and infections in Idaho topped 2,000 in a single day for the first time since the pandemic began.
- In Washington state on Tuesday, Democratic Gov. Jay Inslee extended broad limits on gatherings, restaurants and other indoor activities until Jan. 4.
- North Carolina Gov. Roy Cooper, a Democrat, said that beginning Friday he would institute a new, modified stay-at-home order, requiring business closures and people to be at home from 10 p.m. to 5 a.m.
- Hospitalizations across the country climbed further, with a record 104,600 patients in hospitals because of Covid-19 as of Tuesday, according to the Covid Tracking Project.
- Nationwide, there were 20,483 people in ICUs due to the disease, an all-time high.
- California officials have said the Thanksgiving surge there is expected to continue adding patients to intensive-care units for days to come.
- The U.S. reported more than 2,500 deaths from Covid-19 on Tuesday, bringing the total to more than 286,000.
- The seven-day average of daily U.S. deaths, which helps smooth out irregularities in data reporting, hit 2,237 on Monday, according to a Wall Street Journal analysis of data compiled by Johns Hopkins.
- That is near the record 2,241 average deaths set on April 24, when New York and New Jersey were bearing the brunt of a springtime surge.
- On Wednesday, the Germany’s disease-control institute reported a record daily death toll of 590, and 20,815 new daily infections.
- Chancellor Angela Merkel called for tougher social-distancing restrictions ahead of the Christmas holidays and beyond. She urged the country’s 16 states, which are in charge of implementing measures against the pandemic, to further limit social interactions, including by closing shops from Dec. 24 until Jan. 10.
- France is reporting better progress in reducing infections. New daily cases have fallen from more than 50,000 in early November to a daily average of just over 10,000 cases for the past week. But French authorities have struggled to explain why the daily case count has levelled off at 10,000, a figure that is double the government’s official target for lifting the national lockdown in mid-December.
Two in U.K. Suffer Allergic Reaction to Pfizer’s Covid-19 Vaccine – Wall Street Journal, 12/9/20
- Two of the first people vaccinated in the U.K. on Tuesday with the Pfizer -BioNTech shot responded adversely to the injection, the country’s National Health Service said, prompting the regulator to issue new guidance warning those with a history of significant allergic reactions against having the inoculation.
- The two people are NHS workers, part of the first tranche to receive the vaccine on Tuesday in line with front-line staff having initial access, including those with existing health conditions. Both carried adrenaline auto-injectors to deal with their allergies.
- The agency said that the vaccine, which is administered in two doses at least 21 days apart, had triggered an anaphylactoid reaction in the two people shortly after they received the shot.
- Such reactions are triggered sometimes by drugs such as aspirin, certain anti-inflammatory drugs and opiates.
- The MHRA reminded health-care workers that vaccinations should only be carried out in facilities where resuscitation measures are available. It said it was seeking further information and would issue further advice following investigation.
- The U.K. is the first Western country to authorize a Covid-19 vaccine and on Tuesday began its vaccination program with priority recipients including health-care staff, people over 80 years old and residents and staff in nursing homes.
- The NHS said thousands of people received the shot on the first day of the rollout.
Campbell’s Sales Growth Cools Down – Wall Street Journal, 12/9/20
- Campbell Soup said a surge in sales brought on by the coronavirus pandemic is receding, a sign that the acute changes in consumer behavior early in the pandemic may be moderating even as many people stay home while Covid-19 cases and hospitalizations reach all-time highs.
- Sales rose to $2.34 billion from $2.18 billion a year ago, beating analyst expectations of $2.32 billion.
- Campbell’s U.S. soup sales jumped 21% in the quarter ended Nov. 1 compared with a year ago as pandemic-related restrictions continued to keep people home. However, that was less than half the gains Campbell reported for the prior three months.
- Campbell reported a profit of $309 million, up from $166 million a year ago.
- Campbell said it expects total sales to moderate in coming months, forecasting 5% to 7% growth for the continuing quarter.
GameStop’s revenue misses as store closures, digital competition bite – Reuters, 12/8/20
- Videogame retailer GameStop missed Wall Street estimates for quarterly revenue on Tuesday as pandemic-led store closures and intense competition from digital-game sellers hit sales.
- Revenue fell 30% to $1 billion, missing analysts’ estimates of $1.09 billion.
- The company’s shares were down 4.2% at $16.13 in extended trading, as it said comparable store sales fell 24.6% during the quarter.
- Net loss narrowed to $18.8 million, or 29 cents per share, in the third quarter ended Oct. 31, from $83.4 million, or $1.02 per share, a year earlier.
- The company did not provide a current-quarter forecast.
AT&T Enters Late Stage of DirecTV Auction, Fielding Offers Above $15 Billion – Wall Street Journal, 12/9/20
- AT&T received bids for its DirecTV unit valuing the satellite-TV service at more than $15 billion including debt, according to people familiar with the matter, as the widely watched auction winds toward a resolution.
- Among those submitting bids above that level was Churchill Capital Corp. IV, a blank-check company run by former banker Michael Klein, the people said.
- Apollo Global Management Inc., long seen by many as the front-runner to buy DirecTV, submitted a bid valuing the business at less than $15 billion, some of the people said.
- A deal could allow AT&T to deconsolidate DirecTV’s worsening financial results—a major aim of the transaction—while relinquishing control even as it maintains a majority stake in the business.
- The media-and-telecom company bought DirecTV in 2015 for about $49 billion, or $66 billion including debt.
U.S. Cyber Firm FireEye Says It Was Breached by Nation-State Hackers – Wall Street Journal, 12/9/20
- U.S.-based FireEye, one of the world’s largest cybersecurity firms, was hacked in what it said was a highly sophisticated foreign-government attack that compromised its software tools used to test the defenses of its thousands of customers.
- The company said the attacker also accessed some internal systems and primarily sought information about government clients. FireEye said it has seen no evidence so far that data belonging to its customers had been compromised from the primary systems used to store it.
- FireEye declined to comment on who it believed was behind the breach, which experts said could potentially be leveraged in future attacks against its customer base, including a diverse array of U.S. and Western national-security agencies and businesses.
- A person familiar with the matter said Russia is currently seen by investigators, including U.S. intelligence agencies, as the most likely culprit but stressed that the investigation was continuing.
Amazon eyes potential $100 million investment in India’s Apollo Pharmacy – ET – Reuters, 12/9/20
- Amazon.com is considering a nearly $100 million investment in India’s pharmacy chain Apollo Pharmacy, facing up to Reliance Industries and Tata Group in the country’s fast-growing drug market, the Economic Times reported on Wednesday, citing two people aware of the plans.
- Amazon already delivers medicines in India and the potential investment would come amid rising competition from Mukesh Ambani’s Reliance, which bought a majority stake in online pharmacy Netmeds.
- Tata Group, meanwhile, was reportedly in talks to pick up a majority stake in e-pharmacy firm 1mg.
- Amazon’s plan to further expand in India also comes close on the heels of its launch of an online pharmacy to deliver prescription drugs in the United States, increasing competition with drug retailers such as Walgreens, CVS Health and Walmart.
U.S. companies sitting on record cash pile – S&P Global – Reuters, 12/8/20
- U.S. corporations are sitting on record amounts of cash to reduce shock caused by the coronavirus pandemic, S&P Global Ratings said on Tuesday.
- Cash and investments owned by non-financial and non-utilities corporate issuers jumped 30% to an all-time high of $2.5 trillion in the first half of 2020, the ratings agency said a statement.
- Those companies have increased their debt levels by 9% to nearly $8 trillion, S&P Global Ratings said, adding that the U.S. Federal Reserve’s plan to maintain interest rates near zero for at least another three years will help companies that may need to take on more debt if the health crisis worsens.
U.S. lawmakers ask Intel, Nvidia about sale of tech to China used against Uighurs – Reuters, 12/8/20
- Republican Senator Marco Rubio and Democratic Representative Jim McGovern on Tuesday sent letters to Intel and Nvidia seeking information on the sale of advanced computer chips allegedly used by China to conduct mass surveillance on Uighurs in the country’s remote Xinjiang region.
- Rubio is chairman of the Senate Foreign Relations subcommittee that oversees human rights, and McGovern chairs the Congressional-Executive Commission on China.
- The letters were sent to the chief executives of the companies, who were asked to respond to questions about their exports to China.
- The executives were also asked whether they knew their technology would be used to support surveillance activities conducted by China’s police forces and whether they took steps to ensure their products were not used for human rights abuses or to compromise U.S. national security.
US ECONOMY & POLITICS
White House Makes Offer to Democrats of $916 Billion Covid-19 Relief Bill – Wall Street Journal, 12/8/20
- The Trump administration made a $916 billion coronavirus relief offer to Democrats, opening yet another front in the multi-track effort to reach an agreement in talks that rank-and-file lawmakers have been leading in the final weeks of the year.
- The proposal, announced in a brief statement by Treasury Secretary Steven Mnuchin, came after Democrats rejected an effort by Senate Majority Leader Mitch McConnell (R., Ky.) to narrow the scope of a coronavirus relief bill by excluding aid for hard-hit state and local governments prioritized by Democrats and liability protections sought by Republicans.
- At the same time, the White House is pushing Republicans to include a new round of direct payments of $600 per person in the emerging package, according to people familiar with the discussions, reviving prospects for checks to households in this round of aid.
- The White House offer didn’t include the $300 per week in unemployment insurance that a bipartisan group had coalesced around, according to aides from both parties.
- Along with state and local aid, the $908 billion framework at the center of the current negotiations would add $300 to weekly unemployment benefits, provide $82 billion for schools, $16 billion for the distribution of Covid-19 vaccines and $288 billion in relief for small businesses.
- In comments Tuesday, Mr. McConnell said that Congress should drop aid for state and local governments, a Democratic priority, and liability protections, a GOP goal, from the current set of relief negotiations, and instead address those issues in an additional package next year.
- The two issues have bedeviled the lawmakers who have sought to revive a monthslong quest to pass an aid package before the end of the year.
U.S. Job Openings Slipped in Early December – Wall Street Journal, 12/9/20
- The number of job openings in the U.S. edged down slightly in the first week of December, a sign of a softening labor market amid an upsurge in coronavirus infections and ebbing fiscal support for households.
- There were an average of 10.7 million job openings posted each day on online sites across the U.S. this month, down slightly from November’s 10.9 million, according to data from job-search site ZipRecruiter shared with The Wall Street Journal.
- One measure of hiring—the share of LinkedIn members who added a new employer to their profiles, indexed to the monthly average in 2015-2016—rose 0.8% in November, compared with October. The index jumped 18.1% from September to October.
- The Labor Department reported Wednesday that there were a seasonally adjusted 6.7 million available jobs on the last business day of October. That compared with 6.5 million openings at the end of September, but was down from 7.3 million a year earlier.
- The number of job openings in October was well below the 11.1 million people who were unemployed that month, the department’s data showed.
U.S. House to take up one-week stopgap bill as COVID-19 talks drag on – Reuters, 12/9/20
- The U.S. House of Representatives votes on Wednesday on a one-week stopgap funding bill to provide more time for lawmakers to reach a deal on both COVID-19 relief and an overarching spending bill to avoid a government shutdown.
- The measure aims to prevent existing funds for operating federal programs from running out on Friday at midnight (0500 GMT Saturday) by extending current funding levels until Dec. 18.
- The move will give Congress seven more days to enact a broader, $1.4 trillion “omnibus” spending measure, to which congressional leaders hope to attach a long-awaited COVID-19 relief package – if they can reach a deal on both fronts.
Fitch downgrades NY City debt after S&P revises outlook on COVID uncertainty – Reuters, 12/9/20
- Rating agency Fitch late Tuesday downgraded New York City debt to ‘AA-’ from ‘AA’, while maintaining its negative outlook, on concerns of a prolonged impact to the city’s economic growth due to the coronavirus crisis and related containment measures.
- Fitch’s move comes close on the heels of S&P Global Ratings changing its outlook on the city’s debt to “negative” from “stable” due to uncertainties stemming from a recent uptick in the virus transmission rate.
- S&P’s revision relates to the city’s general obligation (GO) and associated appropriation-backed bonds, while the Fitch downgrade includes industrial development revenue (IDR) bonds, special revenue bonds and GOs.
- New York state Governor Andrew Cuomo said on Monday that if hospitalization rates keep climbing this week, he would suspend indoor dining at New York City restaurants. The city resumed indoor service in September at 25% of capacity.
House Approves Final Passage of Annual Defense-Policy Bill, 335-78 – Wall Street Journal, 12/8/20
- The House approved final passage of a $740.5 billion annual defense-policy bill by a vote of 335-78, far exceeding the two-thirds majority that would be needed to override a veto threatened by President Trump.
- Dozens of Republican lawmakers had earlier in the day lined up behind Mr. Trump to vote against the National Defense Authorization Act, which secures hazard-pay raises for troops and other crucial military spending items.
- But their opposition wasn’t enough to thwart the passage of an annual bill that Congress has approved on a bipartisan basis for 59 years in a row.
- The president again said Congress must jettison a provision in the annual bill that would create a commission to rename military installations, monuments and paraphernalia honoring Confederate commanders.
- He also reiterated that he wanted language included in the bill to terminate Section 230 of the 1996 Communications Decency Act, which granted social-media companies broad immunity for the content they publish from users on their site.
EUROPE & WORLD
Chinese Consumer Prices Show First Annual Decline Since 2009 – Wall Street Journal, 12/8/20
- China’s consumer prices dropped for the first time in over a decade in November, though economists say the decrease doesn’t signal faltering demand in the world’s second-largest economy.
- China’s consumer-price index in November was down 0.5% from a year earlier, the National Bureau of Statistics said Wednesday, after a 0.5% rise in October.
- The statistics bureau said food prices, down 2.0% from a year earlier, weighed heavily on November’s headline CPI.
- In October, food prices were up 2.2% from a year earlier.
- Among foods, pork—the main source of protein in the Chinese diet—extended its decline, down 12.5% in November after October’s 2.8% drop.
Toyota unveils new fuel cell car in fresh push on hydrogen technology – Reuters, 12/8/20
- Japan’s Toyota Motor put its revamped Mirai hydrogen fuel cell car, with 30% greater range, on sale on Wednesday in a fresh push to promote the zero-emission technology amid rapidly growing demand for electric vehicles, including its own.
- The new Mirai launch comes after Prime Minister Yoshihide Suga announced a goal in October to cut Japan’s carbon emissions to zero by 2050, in line with a European Union target and ahead of a pledge by Chinese President Xi Jinping to make his country “carbon neutral” by 2060.
- The new Mirai, like its predecessor, is still beyond the budget of most drivers at about 5 million yen ($48,000) even after more than $10,000 in Japanese government subsidies.
- Rather than produce a cheaper car, Toyota said it wants to lure drivers with longer range – enough to drive around 800 kilometres (497 miles) without refueling – added features such as autonomous parking and a lower, sleeker design achieved by moving the hydrogen power unit to the front of the vehicle from under the car.
STMicro says US-China trade war slows its growth – Reuters, 12/9/20
- Franco-Italian chipmaker STMicroelectronics said the U.S.-China trade war and a near-embargo on Huawei, one of its biggest clients, would slow growth and affect profitability even if demand rebounds after a COVID-afflicted year.
- STMicro’s chief executive said the group had to postpone its $12 billion annual sales target by a year to 2023, with a lower-than-expected operating margin in the range between 15% and 17%.
- Chief Executive Jean-Marc Chery flagged that revenue from Huawei will be “zero” in the fourth quarter but he had played down the risks that a full ban on Huawei would affect the company’s $12 billion target earlier this year.
- The rebound in demand the company expects from the automotive and industrial sectors over the next three years will not be sufficient to fully offset the lower sales seen in the telecoms business due to the U.S.-China trade war.
Factmonster – TODAY in HISTORY
- China declared war against Japan, Germany, and Italy. (1941)
- S. astronauts completed repair work on the Hubble Space Telescope. (1993)
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