Daily Market Report | Dec. 10, 2020

U.S. Stocks Waver as Economic Picture Dims – Wall Street Journal, 12/10/20

  • U.S. stocks pared losses Thursday after fresh data showed unemployment claims jumped sharply last week.
  • Labor Department data showed applications for unemployment benefits, a proxy for layoffs, rose sharply to 853,000 last week—more than economists had forecast.
  • A dimming economic picture may make it more imperative for Congress to pass a fresh fiscal-stimulus spending bill that would support businesses and households through the economic downturn, strategists said.
  • Lawmakers have broadly agreed with the White House that the aid package should total around $900 billion, but key points of contention remain. A bipartisan group continued to negotiate late Wednesday.
  • Separately, continuing negotiations on a post-Brexit trade deal between the U.K. and the European Union are weighing on sentiment in the region.
  • They have until Sunday to reach a decision, according to a tweet from European Commission President Ursula von der Leyen.
  • The two sides “understand each other’s positions” but “they remain far apart,” she wrote.
  • The European Commission said Thursday it is preparing contingency measures for a no-deal scenario, which includes rules for aviation and road travel.
  • Market losses were broad Thursday, with shares of technology, industrial and materials companies among the worst performers.
  • Facebook dropped 1.5% after the Federal Trade Commission and a group of 48 attorneys general filed antitrust lawsuits against the company Wednesday.

Covid-19 Live Updates: U.S. Death Toll Hits New Single-Day Record – Wall Street Journal, 12/10/20

  • The U.S. death toll from Covid-19 hit a single-day record as a panel of outside medical experts gathered Thursday to advise the Food and Drug Administration about the first Covid-19 vaccine the agency is considering for broad use among the American public.
  • The meeting comes as the U.S. reported more than 221,000 new coronavirus cases, the second-highest daily tally since the pandemic began.
  • The U.S. reported more than 3,100 deaths from Covid-19 for Wednesday, surpassing the previous record of more than 2,800 set on Dec. 3, according to data compiled by Johns Hopkins University.
  • California, which has been struggling to contain a recent surge in infections, reported more than 33,000 new cases for Wednesday, the first time the daily number has topped 30,000, according to Johns Hopkins data.
  • California health officials are placing the greater Sacramento area under a new lockdown as intensive-care hospital beds in the region fill up with Covid-19 patients. The stay-at-home order takes effect Thursday, just before midnight, officials said.
  • It prohibits private gatherings of any size, closes certain businesses and requires masks and social-distancing compliance in all businesses that do remain open, officials said.
  • Record numbers of newly reported cases were seen in several states. Tennessee, Virginia, Mississippi and Idaho all reported their highest levels of daily cases since the start of the health crisis.
  • As cases climbed, the nation’s hospitals faced an onslaught of Covid-19 patients.
  • Hospitalizations rose to 106,688 as of Wednesday, the fourth daily record in a row, according to the Covid Tracking Project.
  • Covid-19 patients requiring treatment in intensive care units also hit another record, with 20,922 in ICUs.
  • Politicians in Germany are debating a toughening of the country’s lockdown after infection numbers resumed their climb this week.
  • New confirmed cases hit 23,679 on Wednesday, according to the Robert Koch Institute for infectious diseases—the highest daily increase on record.
  • French Prime Minister Jean Castex is expected to hold a news conference today to announce whether France has made sufficient progress in slowing the spread of the virus to loosen lockdown restrictions.
  • President Emmanuel Macron said last month that France needed to lower the number of new infections to 5,000 a day for the lockdown to lift, but after weeks of steady decline, the case counts have begun to tick upward again. The seven-day average of new daily infections reached 11,369 cases as of Wednesday evening, compared with 10,524 a week ago.
  • A similar trend has emerged in Belgium, which has been at the leading edge of the recent coronavirus resurgence and decline but is now seeing an uptick in the rate at which the virus is spreading.

Facebook Hit with Antitrust Lawsuits by FTC, State Attorneys General – Wall Street Journal, 12/9/20

  • The Federal Trade Commission and 46 states sued Facebook on Wednesday, accusing the social-media giant of buying and freezing out small startups to choke competition.
  • The FTC’s sweeping antitrust case seeks to force Facebook to unwind its acquisitions of WhatsApp and Instagram, two of its landmark deals.
  • The states filed a separate and similar lawsuit, alleging a lack of competition has harmed consumers, including by weakening privacy protections.
  • New York Attorney General Letitia James, a Democrat, asserted that Facebook “has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users,” and made “billions by converting personal data into a cash cow.”
  • Facebook fired back by noting the FTC had previously approved the Instagram and WhatsApp transactions.

Gilead to Pay $1.4 Billion for Hepatitis Drugmaker MYR GmbH of Germany – Wall Street Journal, 12/10/20

  • Gilead Sciences said Thursday it will acquire Germany’s MYR and its new hepatitis drug for about $1.4 billion, reported as 1.15 billion euros, in the company’s latest deal to jump-start revenue growth.
  • The all-cash deal, expected to close in the first quarter, will expand Gilead’s offerings of hepatitis treatments.
  • MYR, a 35-person company based in Bad Homburg, received conditional approval from European regulators in July to market its drug Hepcludex for treatment of hepatitis D, a viral disease that can lead to liver cirrhosis, cancer and death.
  • The disease affects at least 12 million people globally and about 230,000 in the U.S. and Europe, Gilead said.
  • MYR is currently selling the drug in France, Germany and Austria and plans to launch in more countries next year, Gilead said.
  • The company intends to seek U.S. approval in the second half of 2021.

U.S. SEC says GE to pay $200 million penalty for misleading investors – Reuters, 12/9/20

  • General Electric has agreed to pay a $200 million penalty to settle charges for misleading investors over how it was generating earnings in its power and insurance businesses, the U.S. Securities and Exchange Commission said on Wednesday.
  • Securities regulators opened a probe into the company’s accounting practices following a 2017 surprise accounting charge of $6.2 billion by the company, which said it would need to set aside $15 billion for long-term care insurance payouts at the time.
  • The inquiry, which initially focused on long-term service agreements for maintenance of power plants, jet engines and other industrial equipment, was later expanded to include GE’s review of its insurance business.

S&P DJI removes Chinese firms from indexes after U.S. order – Reuters, 12/10/20

  • S&P Dow Jones Indices on Thursday became the second major index provider to remove some Chinese companies from its index products following a Trump administration executive order, in the latest market disruption from persistent Sino-U.S. tensions.
  • Outgoing U.S. President Donald Trump’s executive order, unveiled in November, is designed to deter U.S. investment firms, pension funds and others from buying shares of Chinese companies designated by the U.S. Defense Department as backed by the Chinese military.
  • S&P DJI said it would remove mainland-listed A-shares, Hong Kong-listed H-shares and American Depositary Receipts (ADRs) of 10 companies including Hangzhou Hikvision Digital Technology Co Ltd and Semiconductor Manufacturing International Corp (SMIC) from all equity indexes prior to the market open on Dec. 21.

French watchdog fines Google, Amazon for breaching cookies rules – Reuters, 12/9/20

  • France’s data privacy watchdog has handed out its biggest ever fine of 100 million euros ($121 million) to Alphabet’s Google for breaching the country’s rules on online advertising trackers (cookies).
  • The CNIL said on Thursday it had also fined e-commerce giant Amazon 35 million euros for breaking the same rules,
  • The regulator found the companies’ French websites didn’t seek the prior consent of visitors before advertising cookies – small pieces of data stored while navigating on the Web – were saved on computers, it said in a statement.

NBCUniversal adds more digital, streaming ad options for local businesses – Reuters, 12/10/20

  • Comcast’s NBCUniversal on Thursday said it will give local U.S. advertisers access to buy more digital and streaming TV advertising inventory and introduce the ability to target those ads to consumers by their region, as the media company looks to gain more revenue from small to mid-sized businesses.
  • NBC Spot On, a program that serves advertisers on NBCUniversal’s local TV stations, will expand to let local businesses buy ads on its streaming service Peacock, and on NBCUniversal content that appears on Google’s YouTube and Apple News.
  • NBCUniversal said it will also double the amount of ad inventory local advertisers can access on the NBC App, which has content from networks including MSNBC, Bravo and E!.

US ECONOMY & POLITICS

Spiraling COVID-19 cases driving up U.S. layoffs; inflation still benign – Reuters, 12/10/20

  • The number of Americans filing first-time claims for jobless benefits jumped to a near three-month high last week as mounting new COVID-19 infections caused more business restrictions, further evidence that the pandemic and lack of additional fiscal stimulus were hurting the economy.
  • Initial claims for state unemployment benefits surged 137,000 to a seasonally adjusted 853,000 for the week ended Dec. 5, the highest since mid-September. The weekly increase was the largest since last March, when the nation was battered by the first wave of coronavirus infections.
  • Including a government-funded program for the self-employed, gig workers and others who do not qualify for the regular state unemployment programs, 1.4 million people filed claims last week.
  • The claims report also showed the number of people receiving benefits after an initial week of aid increased 230,000 to 5.757 million in the week ended Nov. 28. That was the first increase since August.
  • At least 4.533 million people were on extended benefits during the week ending Nov. 21. These benefits, which are funded by the government, are set to expire on Dec. 26, if Congress does not reach a deal on another round of stimulus.
  • Just over 19 million people were receiving benefits under all programs during that period.

Lawmakers Weigh Competing Covid-19 Aid Proposals – Wall Street Journal, 12/10/20

  • A flurry of competing proposals for another coronavirus relief package ricocheted around the Capitol Wednesday, as lawmakers hunted for ways to resolve a thorny debate over liability protections that has stymied progress for weeks.
  • A bipartisan group was still working late Wednesday to craft an agreement over some form of legal protections for businesses, schools and other entities operating during the pandemic, the single most stubborn roadblock for lawmakers eager to reach a deal on emergency relief.
  • In a surprise twist this week, Senate Majority Leader Mitch McConnell (R., Ky.), who had insisted for months on including a liability provision in any relief package, suggested Tuesday that lawmakers could proceed by dropping both contentious issues.
  • But just hours later, the White House presented its own offer to House Speaker Nancy Pelosi (D., Calif.) that included both state and local funding, as well as liability protections.
  • Unlike the bipartisan proposal, the White House offer included sending direct checks of $600 in aid per person to many Americans, but omitted the $300 a week in enhanced unemployment insurance that the bipartisan group had proposed.
  • The bipartisan group continued to flesh out its proposal, completing a detailed summary Wednesday that filled in details on all but the two most contentious issues.
  • Their four-month proposal would include $300 a week in unemployment insurance for 16 weeks, $300 billion in relief for small businesses, $35 billion for health-care providers, $82 billion for schools, a 15% increase in monthly food-stamp benefits, $10 billion for child-care providers, $25 billion for rental assistance and a moratorium on evictions through the end of January 2021, according to the summary.

U.S. Senate to vote on spending stopgap as COVID-19 aid debate continues – Reuters, 12/10/20

  • The U.S. Senate is expected to vote as early as Thursday on a one-week extension of federal government funding to provide more time for legislators to work out a larger spending package including coronavirus relief, if lawmakers can reach a deal after months of argument.
  • The Democratic-majority House voted 343-67 on the stopgap measure on Wednesday.
  • If passed and signed by President Donald Trump, it would prevent federal programs from running out of money on Friday at midnight by extending current funding levels until Dec. 18.
  • Senate Majority Leader Mitch McConnell, a Republican, has said the Senate will take it up this week and send it to Trump in time to avoid a government shutdown.

China Responds in Latest Sanctions Tit-for-Tat With U.S. Over Hong Kong  – Wall Street Journal, 12/10/20

  • China is revoking visa exemptions for U.S. diplomatic passport holders in Hong Kong and Macau and said it would impose other unspecified sanctions to retaliate for actions the Trump administration took against Chinese officials this week.
  • The sanctions would affect U.S. officials and nonprofit personnel who had “expressed vile positions on the Hong Kong question” along with their immediate family members, Chinese Foreign Ministry spokeswoman Hua Chunying said Thursday at a regular press briefing in Beijing.
  • The moves were undertaken because the U.S. had “exploited Hong Kong-related issues to seriously interfere in China’s internal affairs and harm China’s core interests,” Ms. Hua said. She didn’t say when the sanctions would take effect.
  • Beijing’s announcement comes after the White House placed 14 senior Chinese officials on its sanctions blacklist on Monday. The Trump administration said the officials had been responsible for eroding Hong Kong’s political autonomy.

U.S. Says Canada Shields Its Dairy Market in Violation of Trade Pact – Wall Street Journal, 12/10/20

  • The Trump administration filed a complaint against Canada over the market access for U.S. dairy products, in the first enforcement action under the U.S.-Mexico-Canada Agreement.
  • U.S. Trade Representative Robert Lighthizer said Wednesday that Canada has hampered the ability of American dairy farmers and producers to sell their products, by using quotas that prefer Canadian producers.
  • In a letter to his Canadian counterpart, Mr. Lighthizer said the U.S. was exercising its rights to enforce the USMCA, adding that Washington may request the establishment of a USMCA dispute-settlement panel if the U.S.’s concerns aren’t addressed.

Mortgage Originations Are on Pace for Best Year Ever – Wall Street Journal, 12/10/20

  • Americans are poised to take more mortgages this year than they did even during the run-up to the 2008-09 financial crisis.
  • In the first nine months of the year, lenders extended $2.8 trillion of mortgages, according to industry-research firm Inside Mortgage Finance. The boom has extended into the final quarter of 2020, prompting analysts to predict origination volume will exceed the prior record of $3.7 trillion in 2003.
  • In the first three quarters of 2020, refis made up 65% of all originations, on pace to be the highest share since 2012, according to Inside Mortgage Finance.

Biden to Name Katherine Tai U.S. Trade Representative – Wall Street Journal, 12/10/20

  • President-elect Joe Biden plans to nominate Katherine Tai as U.S. Trade Representative, according to people familiar with the matter, turning to an experienced trade lawyer with expertise on China and proven diplomatic skills.
  • Ms. Tai has spent much of her career working in the government, first as a lawyer for the Office of the U.S. Trade Representative focusing on China, then as a Congressional staff member.
  • “I think there will be really robust political support for aggressive and bold steps with respect to how we compete with China,” Ms. Tai said on a Center for American Progress panel in August.
  • On the August panel, Ms. Tai described Mr. Trump’s China policy as “largely defensive,” focused on making sure China was playing by the rules and taking countermeasures if it wasn’t.
  • A good trade policy has to have offensive elements as well, she said. “The offense has got to be about what we are going to do to make ourselves and our workers and our industries and our allies faster, nimbler, be able to jump higher, be able to compete stronger, and ultimately be able to defend this open democratic way of life that we have,” she said

Following Trump, Biden Seeks Waiver for Defense-Chief Pick  – Wall Street Journal, 12/10/20

  • President-elect Joe Biden asked for approval of a congressional waiver allowing him to nominate Lloyd Austin for defense secretary, which would the retired Army general the nation’s first Black Pentagon chief.
  • Mr. Biden’s request on Wednesday—which would allow Gen. Austin to serve as defense secretary even though he has been retired from the military for fewer than the seven years required under law—came amid concern that the appointment would erode civilian control of the armed forces.
  • Democrats praised Gen. Austin, but some, including Sens. Richard Blumenthal of Connecticut and Elizabeth Warren of Massachusetts, said they would oppose a waiver, citing the importance of civilian control of the military.

EUROPE & WORLD

EU unveils plans to avoid Brexit chaos as ‘no deal’ looms larger – Reuters, 12/10/20

  • The European Union’s executive on Thursday laid out contingency plans for a ‘no-deal’ Brexit at the end of the year to minimize disruption to air traffic and road and rail travel after talks between British and EU leaders failed to break an impasse.
  • The European Commission also proposed that Britain and the EU continue to offer reciprocal access to their fishing waters for up to a year, but London quickly rebuffed the idea.
  • Agreement on fishing rights has been one of the most emotive sticking points in negotiations for a trade deal that has eluded the two sides since the United Kingdom formally left the EU in January after 47 years of membership.
  • Investment banks on Thursday cut the chances of an agreement by the Dec. 31 deadline, and bookmakers slashed the odds to 50%.

ECB Expands Stimulus Program to Prop Up Pandemic-Hit Economy – Wall Street Journal, 12/10/20

  • The European Central Bank scaled up its emergency bond-buying program by more than a third and unveiled a new batch of ultracheap loans for banks, a bold move aimed at backstopping the region’s governments and businesses as they navigate a stubborn resurgence of the Covid-19 pandemic.
  • The move, which takes the ECB’s monetary stimulus this year above 3 trillion euros, equivalent to $3.6 trillion, underscores the rocky path ahead for the 19-nation eurozone economy.
  • Together with a new €750 billion joint fund that European Union leaders are expected to finalize this week, the decision underscores Europe’s willingness to combat this year’s economic downturn using new debt.

China-Europe Trade Forum Canceled After China Sought to Bar Critics – Wall Street Journal, 12/10/20

  • An annual China-Europe trade forum was quietly canceled last month after European organizers rejected Chinese demands to ban participants critical of Beijing.
  • The move, not previously reported, highlights an increasingly difficult balance Europe is trying to strike between safeguarding business interests and upholding democratic values in the face of China’s increasingly aggressive global stance.
  • The annual China-EU CEO and Former Senior Officials Dialogue—a closed-door event that includes around 40 chief executives, top officials and academics from Europe and China—would have been its fourth edition and taken place this year by videoconference.
  • The event’s cancellation offers a fresh sign of Europe’s hardening stance toward Beijing, a shift that became evident last year when the bloc described China as a systemic rival, and was underscored during the coronavirus pandemic with senior EU officials blaming China for disinformation.

Factmonster – TODAY in HISTORY

  • The first Nobel Prizes were awarded in Stockholm, Sweden, in the fields of physics, chemistry, medicine, literature, and peace. (1901)
  • The United Nations General Assembly adopted its Universal Declaration on Human Rights. (1948)
  • A U.S. passenger jet landed in Vietnam, the first one to do so since the Vietnam War ended nearly three decades earlier. (2004)

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