Wall Street distracted by WallStreetBets; vaccines continue choppy roll out

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Weekly Market Update: Wall Street distracted by WallStreetBets; vaccines continue choppy roll out

2021-01-29T16:18:47.877

It was a historically wild week on Wall Street to say the least, as the Reddit revolution captured the attention of the trading world. Earnings season was largely an afterthought despite roughly 25% of the S&P reporting results and many firms showing increased willingness to provide outlooks into 2021. Gamestop was the posterchild for a basket of highly shorted stocks targeted by WallStreetBets that soared by previously unthinkable amounts without offering up any fundamental news. By midweek high profile hedge fund Melvin Capital was in need of a rescue, sparking concerns that others were like confronting huge losses on their short positions as well. Some trading platforms, most notably Robinhood, were forced to temporarily curtail trading in the targeted stocks in the name of risk management. The overall market saw a surge in volatility and investors took profits despite outstanding earnings releases in many cases, as worries that the excess speculation seen in certain pockets is the latest harbinger of an impending stock market reckoning. For the week, the S&P and DJIA each lost 3.3%, while the Nasdaq fell 3.5%.

In corporate news this week, overall efficacy data for J&J’s vaccine failed to meet that of Pfizer or Moderna’s, but officials were quick to say the news remains positive, pointing in particular to the single-dose vaccination’s strength in preventing severe disease and hospitalizations. Moderna revealed that its COVID-19 vaccine loses potency against some of the most worrying emerging variants from the UK and South Africa, though the shots still retain neutralizing activity against them. ­Facebook notched record revenue and earnings in its Q4, thanks to strong online holiday shopping numbers and a pandemic-related boost to its ad business. Apple posted a blowout Q1, tallying over $100B in revenue for the first time, lifted by a strong sales cycle for its iPhone 12 line. Tesla reported its first full-year profit on record vehicle deliveries and forecast a 50% long-term annual growth in vehicle sales going forward. NXP and STMicroelectronics reportedly have begun telling customers that they’ll raise prices by 10-20% amid higher demand for chips used in cars and telecommunications equipment. Microsoft earnings impressed, reporting stronger Azure cloud growth than was anticipated. Starbucks COO Roz Brewer announced she would be leaving the coffee giant in order to take the CEO role at Walgreens.


SUN 1/24
NXPI NXP and STMicroelectronics said to have informed customers they will increase prices by 10-20% due to higher demand for chips used in cars and telecommunications equipment - Nikkei
(TW) US, UK, Germany and Japan have all asked Taiwan to increase chip supply for auto industry - Nikkei

MON 1/25
(UK) UK reportedly faces three-month 'halfway house' lockdown after Easter to allow for all over-50s to have their second dose of the vaccine - The Telegraph
*(DE) GERMANY JAN IFO BUSINESS CLIMATE SURVEY: 90.1 V 91.4E
MRNA COVID-19 Vaccine Retains Neutralizing Activity Against Emerging Variants First Identified in the U.K. and the Republic of South Africa; Lower titers may suggest a potential risk of earlier waning of immunity to the new B.1.351 strains
*(US) JAN DALLAS FED MANUFACTURING ACTIVITY INDEX: 7.0 V 12.0E
(US) Sen Maj Leader Schumer: will try to pass stimulus in a month or a month-and-a-half
(UK) BOE Gov Bailey: Digital innovations in payments are here to say; don't think cryptocurrencies are lasting yet - webinar comments
(IT) More speculation that PM Conte would likely to resign after informing the cabinet today or tomorrow; hopes to win mandate from Pres Mattarella to form a new govt - press
STLD Reports Q4 $0.97 v $0.62 y/y, Rev $2.60B v $2.35B y/y; sees continued steel price strength
MRNA Exec: expect durability of protection from primary series of our COVID vaccine to be a year or longer - conf call comments

TUES 1/26
UBSG.CH Reports Q4 Net $1.71B v $722M y/y; Adj Pretax $2.06B v $1.2B y/y; Rev $8.12B v $7.05B y/y; To launch new buyback of up to CHF4B; Proposes $0.37/shr dividend for 2020
GE Reports Q4 $0.08 v $0.08e, Rev $21.9B v $21.3Be
MMM Reports Q4 $2.38 v $2.19e, Rev $8.58B v $8.49Be
VZ Reports Q4 $1.21 v $1.16e, Rev $34.7B v $34.4Be
PCAR Reports Q4 $1.17 v $1.21e, Rev $5.57B v $5.03Be; Class 8 EV truck climbs Pikes Peak - EV truck production to begin Q2 2021
BAC CEO: Jan consumer spending is up 9% on the year; we feel very constructive about consumer activity - CNBC interview
*(US) JAN RICHMOND FED MANUFACTURING: 14 V 19E
*(US) JAN CONSUMER CONFIDENCE: 89.3 V 89.0E
(US) Pres Biden executive order to instruct DOJ to not renew contracts with private prisons - press
MSFT Reports Q2 $2.03 v $1.64e, Rev $43.1B v $40.1Be
WBA Reportedly to name outgoing Starbucks exec Roz Brewer as new CEO; announcement could come later this week - press
005930.KR Reportedly plans to boost FY21 chip capex to KRW35T, +20% y/y (~$31.8B) v ~KRW29T y/y; will focus on Xi'an No 2 plant in china and Pyeongtaek No 2 plant in Korea - Korean press
2330.TW Intel to outsource 3nm chips production to Taiwan Semi in 2022 – DigiTImes

WEDS 1/27
GME Reportedly Melvin Capital is out of GME position - CNBC
BA Reports Q4 -$15.25* v -$1.78e, Rev $15.3B v $15.3Be; 5 airlines return 787 MAX to daily service
*(US) DEC PRELIMINARY DURABLE GOODS ORDERS: 0.2% V 1.0%E; DURABLES (EX-TRANSPORTATION): 0.7% V 0.5%E
(DE) Germany Economy Ministry cuts 2021 GDP growth forecast from 4.4% to 3.0% (as speculated)
*(US) DOE CRUDE: -9.9M V +0.5ME; GASOLINE: +2.5M V +1ME; DISTILLATE: -0.8M V -0.5ME
BMW.DE Reports prelim Q4 Automotive segment FCF €2.8B v €1.5B y/y, FY20 FCF €3.4B v €2.6B y/y (ahead of forecasts)
(US) Association of American Railroads weekly rail traffic report for week ending Jan 23rd: 529K, +9% y/y
*(US) FOMC LEAVES TARGET RANGE UNCHANGED BETWEEN 0.00-0.25% (AS EXPECTED); PACE OF RECOVERY HAS MODERATED IN RECENT MONTHS
(US) Fed Chair Powell: reiterates Fed is strongly committed to achieving dual mandate; path ahead remains highly uncertain - post rate decision press conference
FB Reports Q4 $3.88 v $3.24e, Rev $28.1B v $26.4Be; Authorizes new buyback of up to $25B
CP Reports Q4 C$5.95 v C$4.93e, Rev C$2.01B v C$2.07Be
TSLA Reports Q4 $0.80 v $0.90e, Rev $10.7B v $10.1Be
005930.KR Reports final Q4 (KRW) Net 6.6T v 5.2T y/y; Op 9.1T v 9.0T prelim; Rev 61.6T v 61T prelim

THURS 1/28
066570.KR Reports final FY20 (KRW) Net 2.06T v 180.0B y/y, Op 3.20T v 2.44T y/y, Rev 63.3T v 63.3T prelim
(HK) Macau Dec Hotel Occupancy Rate: 53.1% v 43.9% prior
DGE.UK Reports H1 Net £1.58B v £1.87B y/y, Adj Op £2.26B v £2.50B y/y, Rev £6.87B v £7.20B y/y
*(EU) EURO ZONE JAN ECONOMIC CONFIDENCE: 91.5 V 89.6E
MA Reports Q4 $1.64 v $1.51e, Rev $4.1B v $4.00Be
*(US) INITIAL JOBLESS CLAIMS: 847K V 875KE; CONTINUING CLAIMS: 4.771M V 5.09ME
*(US) Q4 ADVANCE GDP ANNUALIZED Q/Q: 4.0% V 4.2%E; PERSONAL CONSUMPTION: 2.5% V 3.1%E
*(US) Q4 ADVANCE GDP PRICE INDEX: 2.0% V 2.2%E; CORE PCE Q/Q: 1.4% V 1.2%E
(US) Nevada reports Dec casino gaming Rev $683.7M, -35% y/y; Las Vegas strip Rev $292M, -50.7% y/y
*(US) DEC NEW HOME SALES: 842K V 870KE
*(US) DEC LEADING INDEX: 0.3% V 0.3%E
(US) South Africa COVID variant identified in the US after two cases diagnosed in South Carolina - press
DAI.DE Reports prelim FY20 adj EBIT €8.64B v €7.12Be, industrial FCF €8.26B v €5.3Be
AMGN StatNews' Feuerstein: BREAKING: 'A milestone in oncology’: $AMGN KRAS-blocking drug proves effective for lung cancer
SWKS Reports Q1 $3.36 v $2.08e, Rev $1.51B v $1.06Be

FRI 1/29
SAP.DE Reports final Q4 EPS €1.69 v €1.82 y/y; Op €2.77B v €2.77B prelim; Rev €7.54B v €7.54B prelim; Affirms guidance
*(FR) FRANCE Q4 PRELIMINARY GDP Q/Q: -1.3% V -4.0%E; Y/Y: -5.0% V -7.6%E
*(DE) GERMANY Q4 PRELIMINARY GDP Q/Q: 0.1% V 0.0%E; Y/Y: -3.9% V -4.0%E
CAT Reports Q4 $2.12 v $1.46e, Rev $11.2B v $11.2Be
JNJ Announces single-shot Janssen COVID-19 vaccine candidate, Ad26.COV2.S, met primary endpoints in interim analysis of its Phase 3 ENSEMBLE Trial; 66% effective overall (72% effective in US) and 85% effective in stopping severe COVID-19
(US) SEC statement: agency is closely monitoring extreme price volatility; will review actions by entities that inhibit trading ability
*(US) DEC PENDING HOME SALES M/M: -0.3% V -0.5%E; Y/Y: 22.8% V 20.3%E
*(US) JAN FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 79.0 V 79.3E
(EU) ECB: to stress test 38 euro zone banks as part of the 2021 EU-wide stress tests led by the EBA

Risk appetite remains despite accumulating vaccine distribution issues

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Weekly Market Update: risk appetite remains despite accumulating vaccine distribution issues

2021-01-22T16:16:16.4

US stocks markets continued to move up this week and risk assets in general saw inflows as the US formally transitioned to the Biden administration. Risk appetite was stoked by hopes the new administration will get more stimulus passed and get vaccinations back on track amid emerging technical delays at the vaccine manufacturers. US economic data largely surpassed expectations, while manufacturing readings and some corporate managements gave indications of rising pricing pressures.

The ECB meeting went largely as expected though the policy statement was explicit in flagging the possibility the central bank may not need to use the entire €1.85T Pandemic Emergency Purchase Program. Italy’s government appeared to overcome another government crisis but PM Conte’s fragile coalition still faces hurdles heading into another key vote next week. The US dollar gave back some ground coming off of last week’s one week high while rates in the US tracked sideways and EU sovereign yields backed up. Bitcoin remained volatile, experiencing its worst week since September. For the week, the S&P gained 1.9% and the DJIA added 0.6%, while the Nasdaq surged 4.2% as large cap tech came back into favor.

In corporate news this week, Netflix saw its biggest daily gain in over four years on the back of strong subscriber growth in Europe and solid guidance. Intel posted record revenue numbers for Q4 in its last quarter with Bob Swan at the helm, while incoming CEO Gelsinger promised the majority of its products will be manufactured internally by 2023, spurning calls to outsource chip manufacturing. IBM revenue missed top line Q4 estimates as it saw its revenue continue to drop, though it did forecast positive sales growth in 2021. Bank of America shares moved lower after posting a quarterly beat on EPS but disappointing sales, with trading revenue coming in below consensus. Morgan Stanley’s fourth quarter blew away street estimates, though the bank somewhat tempered FY21 trading expectations. GM’s Cruise unit entered a long-term strategic agreement with Microsoft as part of a new $2B round of investment in its autonomous car joint venture. Google threatened to shut down its entire search engine in Australia if a proposed law there to require payments for posting news articles goes into effect. President Biden issued an executive order canceling the Keystone XL oil pipeline permit, reversing a priority of former President Trump, despite calls from the Canadian government to maintain the project.


SUN 1/17
(US) Treasury Sec nominee Yellen reportedly to affirm commitment to market-determined US dollar rate; will make clear US does not seek weaker dollar for competitive advantage - US financial press
TRP US President-elect Biden is planning to use executive order to cancel the Keystone XL Pipeline permit - Canada press
*(CN) CHINA Q4 GDP Q/Q: 2.6% V 2.7%E; Y/Y: 6.5% V 6.2%E

MON 1/18
(US) Treasury Sec nominee Yellen: Time to act big for recovery with rates low; US economy was K-shaped before COVID - speech notes ahead of Jan 19th hearing
RIO.AU Reports Q4 Pilbara Iron Ore production 86.0Mt v 83.6Mt y/y; Shipments 88.9Mt v 86.8Mt y/y

TUES 1/19
*(DE) GERMANY JAN ZEW CURRENT SITUATION SURVEY: -66.4 V -68.3E; EXPECTATIONS SURVEY: 61.8 V 59.4E
BAC Reports Q4 $0.59 v $0.56e, Rev $20.1B v $20.4Be
GM Cruise JV and GM enter long-term strategic agreement with Microsoft to commercialize self-driving vehicles; to invest more than $2B in Cruise
*(IT) ITALY PM CONTE WINS SENATE (UPPER HOUSE) CONFIDENCE VOTE - PRESS

WEDS 1/20
*(EU) EURO ZONE DEC FINAL CPI Y/Y: -0.3% V -0.3%E; CPI CORE Y/Y: 0.2% V 0.2%E
FAST Reports Dec net sales $428.8M, +14.7% y/y
PG Reports Q2 $1.64 v $1.51e, Rev $19.7B v $19.1Be; Now sees $10B in stock buybacks in 2021 (prior $7-9B)
*(US) JAN NAHB HOUSING MARKET INDEX: 83 V 86E
(US) Association of American Railroads weekly rail traffic report for week ending Jan 16th: 528.6K, +5.8% y/y
AA Reports Q4 $0.26 v $0.15e, Rev $2.39B v $2.35Be
UAL Reports Q4 -$7.00 adj v -$6.56e, Rev $3.41B v $3.42Be

THURS 1/21
*(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED; Maintains size and duration of PEPP program and notes it may not need to be used in full
*(US) DEC HOUSING STARTS: 1.669M V 1.560ME; BUILDING PERMITS: 1.709M V 1.608ME
*(US) INITIAL JOBLESS CLAIMS: 900K V 935KE; CONTINUING CLAIMS: 5.05M V 5.30ME
*(US) JAN PHILADELPHIA FED BUSINESS OUTLOOK: 26.5 V 11.8E
(EU) ECB chief Lagarde: Reiterates stance that prepared to adjust all instruments as needed as uncertainty remains high - Prepared Remarks
(EU) ECB chief Lagarde: Inflation to turn positive on reversal of German VAT cut, domestic prices will continue to be subdued - Q&A
SIE.DE Reports prelim Q1 Digital Industries Adj EBITA €848M v €592Me, Rev €3.77B v €3.56Be, Orders €4.12B v €4.0Be, Adj EBITA margin 22.5% v 16.6%e
IBM Reports Q4 $2.07 v $1.78e, Rev $20.4B v $20.6Be
INTC Reports Q4 $1.52 v $1.10e, Rev $20.0B v $17.5Be; Raises Quarterly dividend 5.3% to $0.3475 from $0.33 (indicated yield 2.21%)

FRI 1/22
GOOGL Says to block search engine in Australia if it is forced to pay for news - financial press
*(UK) DEC RETAIL SALES (EX-AUTO/FUEL) M/M: 0.4% V 1.0%E; Y/Y: 6.4% V 7.4%E
*(DE) GERMANY JAN PRELIMINARY MANUFACTURING PMI: 57.0 V 57.2E (7th month of expansion)
*(EU) EURO ZONE JAN PRELIMINARY MANUFACTURING PMI: 54.7 V 54.4E (7th month of expansion)
*(UK) JAN PRELIMINARY PMI MANUFACTURING: 52.9 V 53.6E (8th straight expansion)
(DE) Additional chatter German Government to cut 2021 GDP growth from 4.4% to 3.0% - German press
VOW3.DE Raises FY20 adj Op ~€10B v €19.3B y/y (prior Op 'positive' but significant decline), Automotive net cash flow ~€6B
(UK) Health officials: the virus may no longer be spreading exponentially
(US) JAN PRELIMINARY MARKIT MANUFACTURING PMI: 59.1 V 56.5E (highest on record)
(US) DEC EXISTING HOME SALES: 6.76M V 6.56ME
(US) DOE CRUDE: +4.4M V -1.5ME; GASOLINE: -0.3M V +2ME; D (IT) Italy health officials say virus reproduction ('R') rate has fallen below 1 after a five week rise
(US) Nevada reports 2020 casino gaming Rev $6.75B, -23% y/y; Las Vegas strip Rev $3.39B, -24.2% y/y

Markets stall as vaccinations roll out slower than expected

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Weekly Market Update: Markets stall as vaccinations roll out slower than expected

2021-01-15T16:03:48.6

Momentum in equity markets began to wane this week but not before indices eked out new highs led by the small cap Russell 2000. The House voted to impeach outgoing President Trump, as expected, setting the stage for a trial in the Senate during the first days the new administration. Hopes for a substantive fiscal stimulus package after Inauguration Day kept upward pressure on US Treasury yields early on and buoyed asset valuations. Rates stabilized after US 10-year and 30-year Treasury sales saw strong demand and US inflation readings remained benign. Also Fed Chairman Powell emphasized the time to raise rates isn’t going to be anytime soon while a chorus of his colleagues opined the current pace of bond buying will be appropriate for quite some time. Initial jobless claims jumped back towards the 1M mark before Powell noted he still sees plenty of slack in the labor market. Surging COVID infections and growing disappointment in the vaccine rollout dented sentiment late in the week and weighed on equities heading into the long holiday weekend. The US dollar continued to rebound helped by softness in the Euro as Italy once again fell into a political crisis. For the week, the S&P slipped 1.4%, the DJIA lost 0.9%, and the Nasdaq fell 1.5%.

In corporate news this week, banks kicked off earnings season with mixed results. JPMorgan posted solid numbers, beating on earnings thanks to upside surprises on credit and trading revenue. Wells Fargo posted a rise in profit, but revenue came in below estimates, sending shares lower despite a new $500M share buyback program. Citi surpassed earnings expectations and missed on revenue, though announced it would join JPM in releasing more reserves than expected that it had set aside for COVID-related defaults. KB Homes blew out EPS estimates and guided ‘meaningfully higher’ revenue and earnings for FY21. Reports early in the week uncovered potential two-month delays in J&J’s vaccine production schedule, though shares gained later in the week as news trickled out that its one-shot COVID vaccine is safe and generates promising immune response in early trials. Big box retailer Target released strong holiday sales numbers, with digital sales more than doubling in November and December. Intel CEO Bob Swan announced he would step down amid activist pressure with VMWare exec Pat Gelsinger taking the reins. Alimentation Couche-Tard submitted a €20/share takeover bid for retailer Carrefour, though the French government pushed back to slow down any potential deal. Visa and fintech firm Plaid agreed to mutual termination of their merger agreement amid regulatory scrutiny.


MON 1/11
MRNA Reportedly in talks to sell more vaccine doses to the EU at a higher price – press
(US) House Democrats formally introduce Articles of Impeachment against Pres Trump for "incitement of insurrection"

TUES 1/12
(UK) BOE Gov Bailey: Have little evidence of the scale of economic impact from latest lockdown measures; too soon to reach any conclusions about the need for future stimulus
KBH Reports Q4 $1.31 v $0.87e, Rev $1.19B v $1.11Be
(US) Sen Maj Leader McConnell reportedly believes Trump committed impeachable offenses and that the attack on Capitol gives GOP a chance to purge the president - NY Times
(US) No. 3 House Republican Cheney (WY) will vote to impeach Pres Trump; House Republican Kinzinger (IL) to back impeachment - press
(KR) South Korea Dec Unemployment Rate: 4.6% v 4.1%e (10-year high)

WEDS 1/13
JNJ Vaccine production is said to be 2 months behind original schedule; to release COVID-19 vaccine trial results as soon as in 2 weeks - NYT
TGT Reports Nov/Dec Total SSS +17.2%; SS Digital sales +102%
*(US) DEC CPI M/M: 0.4% V 0.4%E; CPI (EX-FOOD/ENERGY) M/M: 0.1% V 0.1%E, CPI NSA: 260.474 V 260.401E
INTC Bob Swan to step down as CEO amid activist pressure; VMWare exec Pat Gelsinger to take over - CNBC's Faber
CA.FR Alimentation Couche-Tard confirms submission of a non-binding €20/shr offer letter
*(US) DOE CRUDE: -3.2M V -2.0ME; GASOLINE: +4.4M V +2.0ME; DISTILLATE: +4.8M V +2.0ME
(IT) Italy's Renzi: Confirms his Party's ministers are resigning, takes courage to pull out of Government now
*(US) TREASURY $24B 30-YEAR BOND REOPENING DRAWS 1.825%; BID TO COVER 2.47 V 2.48 PRIOR AND 2.38 OVER LAST 8 REOPENINGS
(US) Association of American Railroads weekly rail traffic report for week ending Jan 9th: 525.3K, +4.7% y/y
BABA Reportedly US govt will continue to allow investment in some Chinese firms like BABA, BIDU, and Tencent; Nine other firms with links to Chinese military will be added to investment black list - press
*(US) DEC MONTHLY BUDGET STATEMENT: -$143.6B V -$143.5BE
(US) House of Representatives impeaches Pres Trump for a second time, with 10 Republicans joining Democrats to vote yes

THURS 1/14
2330.TW Reports Q4 (NT$) Net 142.8B v 137.2Be (v 116.0B y/y); Op 157.1B v 124.2B y/y; Rev 361.5B v 317.2B y/y
(US) Reportedly US researches found new dominant COVID-19 variant [COH.20G/501Y] in the state of Ohio’s capital, Columbus - FT
DAL Reports Q4 -$2.53 v -$2.41e, Rev $3.97B v $3.83Be; Reiterates to be break even on cash flow by spring; Sees business travel pickup in Q2
*(US) INITIAL JOBLESS CLAIMS: 965K V 789KE; CONTINUING CLAIMS: 5.27M V 5.00ME
(DE) New planned COVID lockdown measures in Germany reportedly might include closing schools - German press

FRI 1/15
JPM Reports Q4 $3.79 v $2.72e, Managed Rev $30.2B v $29.3Be
*(US) JAN EMPIRE MANUFACTURING: 3.5 V 6.0E
*(US) DEC ADVANCE RETAIL SALES M/M: -0.7% V 0.0%E; RETAIL SALES (EX-AUTO) M/M: -1.4% V -0.2%E
*(US) DEC INDUSTRIAL PRODUCTION M/M: 1.6% V 0.5%E; CAPACITY UTILIZATION: 74.5% V 73.6%E
*(US) NOV BUSINESS INVENTORIES: 0.5% V 0.5%E
*(US) JAN PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 79.2 V 79.5E
(US) Coronavirus vaccine reserve for second doses had reportedly already been exhausted when Trump administration promised to release it - Wash Post

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Democrats take control of Congress; President Trump increasingly isolated following Capitol riot

2021-01-08T16:23:46.81

US stock markets forged further into uncharted territory this week despite what can only be described as a historically tumultuous week. Covid cases continued to surge globally as governments struggled to keep the pandemic from overwhelming health care systems. By Friday one out of every one thousand American citizens had succumbed to the virus as the daily death count surpassed 4K for the first time. The surging pandemic was nearly background noise though, as US democratic institutions came under attack. By Wednesday the Democrats had taken control of the Senate by winning the two Georgia Senate runoff seats and President Trump held a rally in Washington DC calling on his supporters to fight the results of last year’s election. The rally morphed into an all-out riot when supporters marched to the Capitol building where Congress was certifying President-elect Biden’s victory and overwhelmed security forces. Mayhem ensued with the Capitol building getting overrun and ultimately resulting in 5 deaths including one Capitol police officer before the National Guard was called in to end the siege. In the aftermath President Trump became increasingly isolated, with business leaders, cabinet members and even the VP distancing themselves while Democrat leaders called for impeachment citing incitement of insurrection.

Strikingly US stock markets had no problem climbing what seemed an insurmountable wall of worry. A reflation trade clearly took hold, aided by the expectation that Biden and the Democrats will be able to push through additional stimulus spending and perhaps an infrastructure bill this year. Not even a disappointing Dec employment report and Fed officials hinting at beginning to discuss pulling back on asset purchases as early as this year could derail the momentum. Interest rates moved up along with stocks and a basket of risk assets. The US 10-year Treasury yield topped 1% for the first time since March, resulting in substantial curve steepening and rising inflation breakeven rates. Bitcoin shot above 40K for the first time and TSLA shares surged above $800, making CEO Musk the wealthiest person on the planet. WTI crude prices moved back above $50/barrel after OPEC+ producers got a surprise cut announcement from the Saudis allowing production to essential stay steady through March. The Russell 2k led the charge following the Georgia runoff results but by week's end nearly all US indices closed at new highs. For the week the Dow rose 1.6%, S&P gained 1.8% and the NASDAQ added 2.43%.

In corporate news this week, Micron posted strong earnings and guided above consensus amid improving DRAM market dynamics. Bed Bath and Beyond Q3 earnings disappointed and guidance fell short of estimates. GM reported its best Q4 retail sales since 2007, and the automaker said it was 'especially bullish' about its new full-size SUVs. EU’s EMA recommended Moderna's COVID-19 vaccine for use in people over 18 years of age, as had been anticipated. The joint healthcare venture between Amazon, Berkshire, and JPMorgan announced it would shut down after three years, concluding a failed effort that had sought to tackle high and rising costs for employee health care. Google and Snap reportedly are in talks to invest in an Indian social network, ShareChat. Boeing entered into a $2.5B deferred prosecution agreement with the DOJ on 737 MAX fraud conspiracy charges. Starbucks CFO Patrick Grismer said he plans to retire in May 2021. Sarepta shares cratered after announcing its Duchenne Muscular Dystrophy treatment study did not produce statistically significant results.

SUNDAY 1/3
(HK) Macau Dec Casino Rev (MOP): 7.8B v 6.8B prior; Y/Y: -65.8% v -70.5% prior

MONDAY 1/4
*(IT) ITALY DEC MANUFACTURING PMI: 52.8 V 53.5E (6th month of expansion)
SNAP Google and Snap said to be in talks to invest in Indian social network ShareChat - tech blog
AMZN Amazon-Berkshire-JPMorgan healthcare JV Haven to shut down after three years - CNBC
(US) Fed Bostic (dove, non-voter): Recalibration of US central bank asset purchases could come in short order if COVID vaccine and economic recovery take hold, new stimulus package will help avoid some of the worst outcomes, but still watching for vulnerabilities

TUESDAY 1/5
*(DE) GERMANY DEC NET UNEMPLOYMENT CHANGE: -37.0K V +10.0KE; UNEMPLOYMENT CLAIMS RATE: 6.1% V 6.2%E
(RU) Saudi and Russia reportedly reach compromise that keeps OPEC+ oil output levels steady for Feb but increases in March - press
*(US) DEC ISM MANUFACTURING: 60.7 V 56.7E; PRICES PAID: 77.6 V 65.0E (Manufacturing highest since Aug 2018, Prices paid highest since 2018)
GM Reports Q4 sales 771.3K vehicles, +4.8% y/y (best Q4 retail sales since 2007); 'especially bullish' about its new full-size SUVs
(SA) Saudi Energy Min: To cut 1M b/d oil unilaterally in Feb and March citing preemptive measure

WEDNESDAY 1/6
*(FR) FRANCE DEC PRELIMINARY CPI M/M: 0.2% V 0.4%E; Y/Y: 0.0% V 0.2%E
*(IT) ITALY DEC SERVICES PMI: 39.7 V 45.0E (4th month of contraction)
*(DE) GERMANY DEC FINAL PMI SERVICES: 47.0 V 47.7E (confirms 3rd straight contraction)
*(EU) EURO ZONE DEC FINAL PMI SERVICES: 46.4 V 47.3E (confirms 4th straight contraction)
*(UK) DEC FINAL PMI SERVICES: 49.4 V 49.9E (confirms 2nd straight contraction)
MRNA EU EMA recommends Moderna's COVID-19 vaccine (as expected); grants conditional marketing authorization for use in people from 18 years of age
*(DE) GERMANY DEC PRELIMINARY CPI M/M: 0.5% V 0.6%E; Y/Y: -0.3% V -0.2%E
*(US) DEC ADP EMPLOYMENT CHANGE: -123K V +75KE (1st negative reading since April)
(US) NYSE will proceed with delisting of three Chinese telecom firms - press
*(US) DOE CRUDE: -8.0M V -2ME; GASOLINE: +4.5M V +1ME; DISTILLATE: +6.4M V +1.5ME
(US) Association of American Railroads weekly rail traffic report for week ending Jan 2nd: 422K, +1.9% y/y
(US) VP Pence statement: I have no authority to unilaterally determine votes; It is not correct that I should be able to accept or reject Electoral College votes unilaterally
(US) All US Capitol buildings have now gone into lockdown as protesters have breached the Capitol - press
*(US) US GOVT REPORTEDLY MULLING ADDING ALIBABA AND TENCENT TO CHINA STOCK BAN; WOULD RESTRICT US INVESTMENT IF ENACTED - PRESS
COST Reports Dec SSS (ex-gasoline) +10.9% v +10.1%e
TWTR Locking Trump account for 12-hours; to permanently ban President Trump account with any future violations
(CN) S&P Dow Jones to remove ADRs of China telecoms [reverses prior position after similar move by the NYSE] - press

THURSDAY 1/7
*(US) CONGRESS CERTIFIES PRESIDENTIAL ELECTION VOTE FOR BIDEN
*(EU) EURO ZONE DEC ECONOMIC CONFIDENCE: 90.4 V 89.8E
*(EU) EURO ZONE DEC ADVANCE CPI ESTIMATE Y/Y: -0.3% V -0.3%E; CPI CORE Y/Y: 0.2% V 0.2%E
*(EU) EURO ZONE NOV RETAIL SALES M/M: -6.1% V -3.4%E; Y/Y: -2.9% V +0.9%E
*(US) INITIAL JOBLESS CLAIMS: 787K V 800KE; CONTINUING CLAIMS: 5.07M V 5.20ME
*(US) DEC ISM SERVICES INDEX: 57.2 V 54.5E (highest since Sept)
MU Reports Q1 $0.78 v $0.71e, Rev $5.77B v $5.73Be
BA DOJ charges Boeing with 737 MAX fraud conspiracy; Boeing to settle for $2.5B
(US) Fed's Bostic: Fed may taper bond purchases earlier than expected - Fox Business interview
005930.KR Reports Q4 prelim (KRW) Op 9.0T v 9.5Te (vs 7.2T y/y) , Rev 61T v 62.0Te (vs 59.9T y/y)
PFE Exec: according to new study, COVID-19 vaccine appears to be effective against both UK coronavirus variant B117

FRIDAY 1/8
*(EU) EURO ZONE NOV UNEMPLOYMENT RATE: 8.3% V 8.5%E
*(US) DEC CHANGE IN NONFARM PAYROLLS: -140K V +50KE (1st negative reading since Apr 2020)
*(US) DEC AVERAGE HOURLY EARNINGS M/M: 0.8% V 0.2%E; Y/Y: 5.1% V 4.5%E; AVERAGE WEEKLY HOURS: 34.7 V 34.8E
*(US) NOV FINAL WHOLESALE INVENTORIES M/M: 0.0% V -0.1%E

2020 ends

TradeTheNews.com 

Weekly Market Update: 2020 ends

2020-12-31T16:06:22.003

The market year ended on an upbeat note, with US stocks posting another solid gain for the week and the month, and finishing at fresh record highs. The year was not as good for European bourses as the DAX eked out a 3.5% gain, while the CAC and FTSE were down double digit percentages, handing the UK market its worst showing since the 2008 financial crisis. That may reflect Britain’s long, drawn out Brexit negotiation that led to late stage concessions to get a deal approved by Parliament in the closing moments of the year. Meanwhile in the Washington, a government shutdown was avoided as President Trump reversed course and signed the budget and coronavirus relief bill into law on Sunday. The prospects for boosting the aid package for US consumers dwindled as Senate Republicans sandbagged Trump’s late push to raise direct payments to $2,000 per person. The Senate also prepared to override the President’s veto of the NDAA defense policy bill, just days ahead of a vote in Georgia to determine which party will control the upper house, as well as Congress’ certification of the 2020 Electoral College result.

Good news about another Covid vaccine gaining approval in the UK was somewhat dampened by reports of problems in the early stages of distributing the existing vaccines on a mass scale even as many commercial logistics chains were still overwhelmed with holiday ecommerce shipments. The new, more easily spread Covid variant, first detected in the UK, began to pop up in more places amid many western nations logging spikes in new infections. Currency markets saw cable rise to its best levels of the year during the final session, while the dollar index was modestly lower on the week. Gold gained slightly on the week, while WTI crude maintained its place in the high $40’s/bbl. For the week, the S&P gained 1.4%, the DJIA was up 1.4%, and the Nasdaq rose 0.7%. For the year, the S&P added 16.3% and the Nasdaq surged 43.6%.

In corporate news this holiday-shortened week, Dan Loeb’s Third Point reportedly disclosed it had built a $1B (0.5%) stake Intel and urged the tech giant to explore strategic alternatives, including a 'potential divestment of certain failed acquisitions’. AstraZeneca confirmed its COVID-19 vaccine has been authorized by UK regulators for emergency supply, as had been speculated. The Chinese government called on Alibaba co-founder Jack Ma to pare down his finance business, as the country ramps up its regulatory scrutiny of the billionaire’s tech empire.

Happy New Year!


SUN 12/27
(US) President Trump: Signed coronavirus bill with message "Wasteful items" to be removed

MON 12/28
(US) FAA to issue rules that allow for small drones to fly over people and at night hours; will also require remote ID for most drones
(US) Department of Transportation’s Federal Aviation Administration (FAA) issues final rules for Unmanned Aircraft (UA), commonly known as drones
(US) House gives bipartisan support for increased COVID checks to $2,000 (from $600), will move to Senate now

TUES 12/29
(HK) Macau Nov Hotel Occupancy Rate: 43.9% v 40.0% prior
(US) Nevada reports Nov casino gaming Rev $771.2M, -17.8% y/y; Las Vegas strip Rev $349.8M, -32.5% y/y
INTC Third Point (Loeb) in letter reportedly urges Intel to explore strategic alternatives including 'potential divestment of certain failed acquisitions' - press
(US) Colorado Gov Polis: have seen confirmed case of the COVID-19 variant first detected in the U.K.; man is in his 20s with no travel history has tested positive

WEDS 12/30
PFE California ER nurse tests positive for COVID a week after getting Pfizer vaccine - NY Post
AZN Confirms AZD1222 COVID-19 vaccine has been authorized by UK regulator for emergency supply (as speculated)
(UK) Labour Leader Starmer: Thin EU trade deal is better than no deal, little protection for services in EU deal
(FI) ECB's Rehn (Finland): ECB continues to monitor the Euro exchange rate very closely - German press
*(US) NOV PENDING HOME SALES M/M: -2.6% V 0.0%E; Y/Y: 16.0% V 21.0%E
(US) Association of American Railroads weekly rail traffic report for week ending Dec 26th: 405.1K, +8.4% y/y
*(CN) CHINA DEC MANUFACTURING PMI (GOVT OFFICIAL): 51.9 V 52.0E

THURS 12/31
*(US) INITIAL JOBLESS CLAIMS: 787K V 835KE; CONTINUING CLAIMS: 5.22M V 5.39ME

Markets remain encouraged by vaccine news and progress on US stimulus talks

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Weekly Market Update: Markets remain encouraged by vaccine news and progress on US stimulus talks

2020-12-18T16:13:09.433

US stocks continued to edge up to new all-time highs this week led by historic outperformance in the Russel 2000. Reports indicated global equity inflows for the week ending December 16th reached a new record high above $46B. Investors looked past the grim rise in Covid-related deaths to focus on continued positive developments on the vaccine front, and growing hopes for a fiscal relief agreement in Washington. Disappointing US economic data only added to the narrative that pressure was building on lawmakers that would propel them across the finish line.

European data was decidedly more encouraging which propelled continued pressure on the US dollar. The Greenback fell to levels not seen in roughly three years which aided continued upward pressure on commodity prices. A host of central banks convened policy meetings, headlined by the Federal Reserve. Chairman Powell outlined what he viewed as powerful new forward guidance on asset purchases, but came up short of signaling any changes to pace or composition of those purchases. By Friday sentiment felt heavier as Brexit negotiations looked to be headed into another do-or-die weekend and no agreements had been reached in Washington on either a relief package or an omnibus spending bill. Adding to the tensions were reports of continued dysfunction between the Trump Administration and President elect Biden’s transition team. Discord appeared to be growing as details emerged of a major cyberattack by Russian hackers who breached numerous US federal agencies including the Energy Department and National Nuclear Security Administration. For the week, the S&P gained 1.3%, the DJIA added 0.4%, and the Nasdaq surged 3%.

In corporate news this week, Apple said it planned to boost iPhone production by 30% in H1’21 amid strong 5G demand, targeting 230M phones for the full year. Lennar posted blowout earnings, with its chairman noting, “It’s never been this easy to sell homes,” adding he expects the strong demand to continue into the new year. FedEx reported a modest Q2 beat, but margins and an uncertain outlook resulted in some profit-taking in the name. An FDA advisory committee voted to recommend Moderna’s COVID vaccine for emergency use, adding a second potential inoculation against coronavirus to the mix for US citizens following last week’s Pfizer approval. Tilray confirmed it would be acquired by Aphria in an all-stock reverse merger deal to create the world's largest cannabis company. AstraZeneca acquired Alexion for $39B as part of a cash and stock deal in a move to expand into the rare disease space. Electronic Arts bought developer Codemasters for $1.2B, outbidding rival Take-Two for the racing game studio. Eli Lilly added gene therapy specialist Prevail Therapeutics to its portfolio for $880M in cash, plus add-ons for a future drug approval.


SUN 12/13
(UK) EU Commission President Von Der Leyen and UK PM Johnson said negotiations on a Brexit deal will continue (no specific deadline now set) - Joint Statement

MON 12/14
(US) NYC Mayor de Blasio: NYC should prepare for possibility of a 'full shutdown'
(TR) US announces sanctions on Turkey's Presidency of Defense Industries and President Ismail Demir over Turkey purchase of Russian S-400s - press (had been expected to impose sanctions today)
(US) Attorney General (AG) Barr to leave role before Christmas (after his departure had been speculated); Trump appoints Jeff Rosen as acting AG
ALXN Confirms to be acquired by Astrazeneca for $175/shr in cash and stock deal valued at $39B; To close in Q3 2021

TUES 12/15
AAPL Said to be planning 30% increase in iPhone production in H1 2021 due to strong demand for 5G phones; Apple said to have told suppliers it is planning to build up to 230M phones in 2021 - Nikkei
*(US) DEC EMPIRE MANUFACTURING: 4.9 V 6.2E
(US) Sen Maj Leader McConnell: this morning the US officially has a president-elect; wants to congratulate Pres-elect Biden and Vice Pres-elect Harris
*(US) NOV INDUSTRIAL PRODUCTION M/M: 0.4% V 0.3%E; CAPACITY UTILIZATION: 73.3% V 73.0%E
2330.TW Taiwan Govt considering helping companies like TSM to remain competitive amid concerns quantum computing could negatively impact semiconductor industry - Digitimes

WEDS 12/16
*(UK) NOV CPI M/M: -0.1% V +0.1%E; Y/Y: 0.3% V 0.6%E
*(FR) FRANCE DEC PRELIMINARY MANUFACTURING PMI: 51.1 V 50.1E (moves back to expansion)
*(DE) GERMANY DEC PRELIMINARY MANUFACTURING PMI: 58.6 V 56.5E (6th month of expansion and highest reading since Feb 2018)
*(EU) EURO ZONE DEC PRELIMINARY MANUFACTURING PMI: 55.5 V 53.0E (6th month of expansion)
*(UK) DEC PRELIMINARY PMI MANUFACTURING: 57.3 V 56.0E (7th straight expansion and highest reading since Nov 2017)
(US) Capitol Hill negotiators are reportedly on the brink of a $900B coronavirus rescue package; would include a new round of direct payments, but would leave out state and local aid, and a liability shield; deal could come as early as this morning - Politico
*(US) DEC PRELIMINARY MARKIT MANUFACTURING PMI: 56.5 V 55.8E
*(US) FOMC LEAVES TARGET RANGE UNCHANGED BETWEEN 0.00-0.25% (AS EXPECTED); MAKES NO CHANGE TO COMPOSITION AND PACE OF ASSET PURCHASES
*(US) DEC NAHB HOUSING MARKET INDEX: 86 V 88E
LEN Reports Q4 $2.82 v $2.38e, Rev $6.83B v $6.54Be
(US) Pharmacists have found way to squeeze extra doses out of Pfizer vaccine vials, which could boost US supply of vaccine by 40% - Politico

THURS 12/7
(EU) German Agriculture Min Kloeckner: Found solution for fishing quota issue on Brexit; North Sea fishing will be reevaluated in Jan 2021
*(EU) EURO ZONE NOV FINAL CPI Y/Y: -0.3% V -0.3%E; CPI CORE Y/Y: 0.2% V 0.2%E
*(UK) BANK OF ENGLAND BANK (BOE) LEAVES INTEREST RATE UNCHANGED AT 0.10%; AS EXPECTED
*(UK) BOE DEC MINUTES: VOTED 9-0 (UNANIMOUS) TO KEPT INTEREST RATES
SEC Chairman Jay Clayton: We can't regulate euphoria - CNBC
*(US) DEC PHILADELPHIA FED BUSINESS OUTLOOK: 11.1 V 20.0E (lowest since June)
*(US) NOV HOUSING STARTS: 1.55M V 1.535ME; BUILDING PERMITS:1.64 M V 1.560ME
(US) Energy Department and National Nuclear Security Administration reportedly have evidence that hackers accessed their networks - Politico
FDX Reports Q2 $4.83 v $3.90e, Rev $20.6B v $19.3Be
MRNA FDA advisory committee votes in favor that "Based on the totality of scientific evidence available, do the benefits of the Moderna COVID-19 Vaccine outweigh its risks for use in individuals 18 years of age and older?" (20 yes, 0 no, 1 abstain) - VRBPAC Meeting
MSFT Microsoft reportedly was breached as part of suspected Russian hack; Microsoft products said to have been used to infect others - press
*(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED

FRI 12/18
(CN) Trump Administration said to plan to add ~80 companies (including SMIC) to US Commerce Dept Entity List on Dec 18th (Friday)
*(UK) NOV RETAIL SALES (EX-AUTO/FUEL) M/M: -2.6% V -4.0%E; Y/Y: 5.6% V 4.1%E
*(DE) GERMANY DEC IFO BUSINESS CLIMATE SURVEY: 92.1 V 90.0E
(UK) BOE’s Vlieghe: Believes that negative rates could help UK complete recovery
(US) NOV LEADING INDEX: 0.6% V 0.5%E
*FED BANK STRESS TEST RESULTS: will loosen restrictions for share buybacks and will permit limited dividend payouts in Q1

Brexit endgame unnerves some investors

TradeTheNews.com 

Weekly Market Update: Brexit endgame unnerves some investors

2020-12-11T16:14:40.553

This week investors continued to grapple with a worrying elevation in US Covid-19 infections, juxtaposed to the hope provided by the growing expectation that US vaccinations could begin as early as next week. Pfizer saw its Covid-19 vaccine get the nod from a key FDA advisory panel paving the way for EUA authorization in the next few days. Corporate news was very robust, with key earnings reports and analyst days providing managements the opportunity to offer color on markets and their forecasts heading into the new year. The US IPO market remained red hot, boosting animal spirits, though some market veterans viewed it as a potential signpost of topping in equity valuations. The long-awaited Doordash and Airbnb deals saw surging demand amid a host of SPAC offerings and merger related announcements.

As the week progressed both Brexit optimism and US fiscal stimulus hopes waned. PM Johnson and EU’s Von der Leyen were unable to bridge differences ahead of an EU summit. In Washington, party leaders blamed each other for lack of compromise, while largely ignoring the latest offer coming from a White House that was clearly more focused on contesting the election. US weekly jobless claims rose to the highest level since September. The Euro rose after the ECB met and tweaked non-conventional stimulus measures while leaving rates unchanged, but the adjustments had been widely foreshadowed. By Friday, disappointing news on the vaccine front, the fact a hard Brexit appeared imminent, and continued surge in COVID cases sent Treasury yields lower while capping stock markets. For the week, the S&P lost 1%, the DJIA was fell 0.6%, and the Nasdaq shed 0.7%.

In corporate news this week, Toll Brothers reported beats on its top and bottom line but Q1 delivery guidance disappointed. Oracle beat consensus, while noting cloud license revenue growth declined, though upbeat guidance lifted shares. Software security maker FireEye disclosed a cyber breach by suspected nation-state hackers who used techniques that the company had itself not witnessed in the past. AirBNB doubled its initial share price on its first day of trading, while DoorDash stock finished its first session up a mere 80%. The FTC and 48 state attorneys general filed suit alleging Facebook has used its monopoly power to crush competition from smaller rivals. Sanofi and GSK postponed their COVID-19 vaccine program to improve immune response in the elderly, with its availability now pushed to Q4’21. Snap and Twitter announced a partnership to bring native integration of tweets to Snapchat, and Twitter said it will test a similar integration with Instagram stories. Disney shares jumped after updating investors on its streaming subscriber numbers and extensive future content plans.


SUN 12/6
000660.KR Notes it has developed 176-layer NAND flash chip, expects the chip to improve prior generation chips' bit productivity by 35%

MON 12/7
(UK) EU chief negotiator Barnier in briefing to EU envoys reportedly said no UK trade deal yet; reiterates stance that 3 key issues remain - financial press
(UK) Govt could offer to pull clauses in internal market bill & taxation bill which break international law Joint committee discussions said to be progressing well BUT it will still reinstate clauses today - govt expected to offer to remove them in coming days if solution reached - UK Times Political reporter Tweet
*(US) OCT CONSUMER CREDIT: $7.2B V $15.5BE
TOL Reports Q4 $1.55 v $1.23e, Rev $2.55B v $2.08Be

TUES 12/8
*(DE) GERMANY DEC ZEW CURRENT SITUATION SURVEY: -66.5 V -66.0E; EXPECTATIONS SURVEY: 55.0 V 46.0E
*(EU) EURO ZONE Q3 FINAL GDP Q/Q: 12.5% V 12.6%E; Y/Y: -4.3% V -4.4%E
*(US) Q3 FINAL NONFARM PRODUCTIVITY: 4.6% V 4.9%E; UNIT LABOR COSTS: -6.6% V -8.9%E
FEYE Discloses cyber breach by suspected nation-state hackers who used "techniques not witnessed by us or our partners in the past" - filing

WEDS 12/9
*(US) OCT FINAL WHOLESALE INVENTORIES M/M: 1.1% V 0.9%E
DASH IPO opens for trade at $182
PFE Statement on EMA hacker attack: no Pfizer or BioNtech systems were breached; some of our Covid vaccine documents were unlawfully accessed in the attack
FB FTC and state AGs file suit alleging Facebook has used its monopoly power to crush competition from smaller rivals
C CFO: we are in a much better place than we expected in Oct - investor conf comments
(EU) EU Commission chief's Von der Leyen: confirms position with UK remains far apart; we will come to decision by end of weekend, teams should immediately reconvene
(UK) PM Johnson: Acknowledges [Brexit] situation is difficult; Will not leave any route to fair deal is left untested
(CN) S&P Dow Jones Indices’ issues Consultation on the Executive Order Prohibiting U.S. Transactions in Certain Chinese Companies Results: China Based companies will be deemed ineligible for S&P and Dow Jones equity indices

THURS 12/10
2330.TW Reports Nov (NT$) Rev 124.9B v 107.9B y/y, +4.7% m/m
(EU) EU Commission proposes contingency measures for no-deal Brexit - press
(EU) EU Commission chief's Von der Leyen: negotiations are still ongoing on Brexit
HUN Raises Q4 adj EBITDA +20-25% y/y, (higher than prior forecast)
*(EU) ECB LEAVES MAIN REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED; PEPP program increased by €500B extended by at least 9 months; TLTRO III extended by 1 year
*(EU) ECB INCREASES ITS PANDEMIC BOND BUYING PROGRAM (PEPP) BY €500B TO €1.85T; with program extended by 9 months until at least Mar 2022
ADBE Reports Q4 $2.81 adj v $2.65e, Rev $3.42B v $3.36Be; Announces $15B share buyback (6.5% of market cap)
*(US) NOV CPI M/M: 0.2% V 0.1%E; CPI (EX-FOOD/ENERGY) M/M: 0.2% V 0.1%E; CPI NSA: 260.229 V 260.087E
PFE Doran Dink, Deputy Director-Clinical, Division of Vaccines and Related Products Applications: “Expect a high bar to be met with efficacy data from at least one well-designed Phase 3 trial demonstrating protection against SARS-CoV-2 infection or disease before approval of Emergency Use Authorization (EUA)”; Would need additional 6 months analysis of positive data before a BLA approval will be considered - Vaccines and Related Biological Products Advisory Committee Meeting
(UK) BOE statement: Banks can resume paying dividends and bonuses; Any distributions should be prudent, reflecting the still elevated levels of economic activity
CHA FCC adopts order instituting proceeding on China Telecom to revoke authorization to operate in US.
(US) Sen Maj Leader McConnell reportedly has said bipartisan COVID deal talks will not be able to win over Senate GOP members - Politico
(EU) EU leaders agree on compromise involving EU budget and rule of law with Poland and Hungary unblocking recovery package; approve $2.2T stimulus backed by joint debt
(UK) PM Johnson: Cabinet has agreed the EU deal on table is not right for the UK; more likely now there will no deal than a deal
TWTR Snap and Twitter partner to bring native integration of tweets to Snapchat; Twitter will test similar integration with Instagram stories - TechCrunch
*(US) TREASURY $24B 30-YEAR BOND REOPENING DRAWS 1.665%; BID TO COVER 2.48 V 2.29 PRIOR AND 2.39 OVER LAST 8 REOPENINGS
(EU) Reportedly new EU rules will define tech companies with millions of European users as online 'gatekeepers'
*(US) NOV MONTHLY BUDGET STATEMENT: -$145.3B V -$199BE
PFE Plan to file BNT162b2 Covid-19 Vaccine BLA by April 2021
ORCL Reports Q2 $1.06 v $1.00e, Rev $9.80B v $9.79Be; Claims more datacenters than AWS
COST Reports Q1 $2.62 v $2.04e, Rev $43.2B v $43.2Be
AVGO Reports Q4 $6.35 v $6.26e, Rev $6.47B v $6.42Be; Raises Quarterly dividend 10.8% to $3.60 from $3.25 (indicated yield 3.51%)
PFE FDA advisory committee votes in favor that Pfizer-BioNTech COVID vaccine outweighs its risks for use in individuals 16 and older (17 yes, 4 no, 1 abstain)
CDC reports daily new COVID cases at 231.4K v 217.0K d/d (new record)
AAPL Exec tells staff Apple has begun development of in-house cellular modem that would replace Qualcomm modem chips - press, citing sources
DIS Disney+ streaming service has 86.8M subscribers as of Dec 2nd - investor day comments

FRI 12/11
SAN.FR Sanofi and GSK announce a delay in their adjuvanted recombinant protein-based COVID-19 vaccine program to improve immune response in the elderly; potential vaccine availability now expected in Q4 2021 (prior mid-2021)
*(DE) GERMANY NOV FINAL CPI M/M: -0.8% V -0.8% PRELIM; Y/Y: -0.3% V -0.3% PRELIM
(EU) EU Commission chief Von der Leyen said to have told EU leaders that a no-deal Brexit outcome is most likely option for now - press
(ES) Spain 10-year govt bond yield turns negative for the 1st time ever
AZN.UK Announces developing immunization programmes against COVID-19 with Russian Gamaleya Research Institute through potential vaccine combination
(UK) PM Johnson: Looks 'very, very likely' will have no Brexit deal; yet to see big change from EU
*(US) NOV PPI FINAL DEMAND M/M: 0.1% V 0.1%E; Y/Y: 0.8% V 0.7%E
(US) DEC PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 81.4 V 76.0E
(US) Weekly Baker Hughes Rig Count: 338 v 323 w/w (+4.6% w/w) (biggest jump since Jan)

Dow tops 30K giving investors a lot to be thankful for

TradeTheNews.com 

Weekly Market Update: Dow tops 30K giving investors a lot to be thankful for

2020-11-27T13:06:01.713

- The Dow hit a fresh all-time highs this week breaking above 30K for the first time ever. Markets continued to calibrate to rising hopes for coronavirus vaccines. Uncertainty also dissipated when the GSA informed President-elect Biden that the current administration was ready to begin working on the transition. That news came in the wake of multiple reports former Fed Chair Yellen has been selected to serve as Treasury Secretary under the Biden administration. Stock and options volumes exploded and breadth was very impressive ahead of Thursday’s Thanksgiving break led by the small caps and various segments at the pandemic’s epicenter, like travel and leisure.
- Investors sifted through a mountain of economic data. Weekly initial jobless claims hit a 5-week high while the total number of people claiming benefits in all programs rose by 135K to ~20.5M people. Oct personal income also fell a sharp 0.7% suggesting the pandemic continues to ravage a broad swath of the US labor market. Friday’s shortened trading session saw gold prices drop below $1,800 and the VIX tested below 20 for the first time since Feb, suggesting investors are becoming comfortable with diminishing political uncertainty despite President Trump’s continued tweets questioning the election results. Oil prices rallied sharply helped by a report OPEC+ producers are still leaning towards extending production cuts into next year despite the recent pop in crude prices. Bitcoin rolled over after nearing 20K and new all-time highs midweek amid continued general softness in the dollar. The Euro tested back above 1.1950 for the first time since September bringing the key technical 1.20 level back into focus as time continued to run out on protracted Brexit talks. For the week the S&P added 2.3%, Dow gained 2.2% and NASDAQ rose ~3%.
- In corporate news for this holiday-shortened week, AstraZeneca announced its vaccine candidate met its primary efficacy endpoint in preventing COVID-19 with average efficacy of 70%, though the CEO said it may do another study after an accidental lower dose showed higher efficacy levels against coronavirus. Salesforce reportedly held talks with Slack over a potential acquisition which could value the business communication company at over $17B. EU aviation regulators confirmed the Boeing 737 Max can be allowed to fly again and expects formal approval by Jan 2021. Google is said to plan to build a fiber optic network that would open a new global traffic corridor linking India and Europe, which would connect an internet route between Saudi Arabia and Israel for the first time.

Markets temporarily inoculated against risks of Covid winter and delays in approving new relief funding

TradeTheNews.com 

Weekly Market Update: Markets temporarily inoculated against risks of Covid winter and delays in approving new relief funding

2020-11-20T16:19:32.89

The broader narrative this week remained the confluence of positive news on coronavirus vaccine development weighed against surging infections and rapidly rising hospitalizations into the upcoming Thanksgiving holiday. US indices generally notched the week’s high on Monday in the wake of the release of Moderna’s trial results which resulted in another flurry of buying in pandemic-stricken names. By Friday, Pfizer and BionNTech formally submitted a request to the FDA for emergency use authorization but stay at home sector names were already rebounding as momentum waned in the broader market. Treasury yields were capped by the persistent risk to the near term economic outlook caused by the surging pandemic, and lingering uncertainty emanating from President Trump’s spiraling attempt to contest the election results. The US economic data showed some signs of softening amid commentary from both corporate leaders and Federal Reserve officials who acknowledged the recent spike in Covid cases is posing risks to their near term outlooks. The dollar weakened, hurt by continued dysfunction in DC. Given the current political environment hopes for another round of fiscal stimulus remain faint in the near term, and a rift developed between Treasury Secretary Mnunchin and the Federal Reserve on how to deal with the expiration of the Fed’s emergency 13-3 lending powers. New EU coronavirus relief funds were also held up by political skirmishes in Europe, while any Brexit trade deal now appears to be at least another two weeks away. For the week, the S&P slipped 0.8%, the DJIA fell 0.7%, and the Nasdaq rose 0.2%.

In corporate news this week, Moderna announced its COVID-19 vaccine candidate met primary endpoints with 94.5% efficacy in its Phase 3 trial, and plans to submit it for emergency use authorization with the FDA in coming weeks. Boeing received the long-awaited and largely expected FAA approval for its 737 MAX jet to take to the skies again, after being grounded since 2019. On the retail front, Home Depot notched top and bottom line beats but warned of rising employee expenses, Lowes narrowly missed profit estimates, Target crushed earnings and gained market share, while Walmart posted another solid quarter though it still refrained from reinstating guidance. Nvidia easily surpassed analyst estimates but saw its Q3 gross margins decline by 50 bps and forecast that its data center segment revenue would shrink quarter-on-quarter.

PNC agreed to acquire BBVA’s U.S. banking subsidiary for $11.6B in cash with the aim to expand its banking branch reach coast-to-coast. Home Depot announced it would buy its former subsidiary HD Supply for $56/share in an $8B cash deal as it seeks to grow its maintenance and repair distribution network in North America. Amazon entered the prescription drug sector with its launch of Amazon Pharmacy, a service to deliver medications and offer savings to customers when paying without insurance. In a bid to stave off further pushback from developers, Apple announced it would halve its App Store commission to 15% for small businesses, down from 30%, though the higher fee remains for larger companies. Google said it plans to begin offering checking accounts with banks in an update to its Google Pay app. Shares in Tesla jumped after it was announced the automaker would finally enter the S&P 500 index.


SUN 11/15
(CN) US President Trump said to be looking at implementing additional measures against China during his final weeks in office - press

MON 11/16
BBVA.ES Confirms PNC to acquire BBVA USA Bancshares, Inc. for $11.6B in cash
MRNA COVID-19 Vaccine Candidate mRNA-1273 meets Primary Efficacy Endpoint in First Interim Analysis of the Phase 3 COVE Study with vaccine efficacy of 94.5%; Intends to submit for EUA with U.S. FDA in coming weeks
MRNA Announces Longer Shelf Life for mRNA-1273, COVID-19 Vaccine Candidate at Refrigerated Temperatures
HDS To be acquired by Home Depot for $56/shr in ~$8B cash deal
VOW3.DE CEO: Affirms FY22 Op RoS 6-7%, ROI 10-12%, Capex ratio 6.0-6.5%, R&D Cost ratio 6.5-7.0%, Net Cash flow >€10B, Liquidity >€20B - slides
*(US) NOV EMPIRE MANUFACTURING: 6.3 V 13.5E
(EU) Hungary and Poland have followed through with threat to block the 2021-2027 EU budget and recovery fund at Ambassadors meeting in Brussels
BIDU Reports Q3 $3.00 v $1.85e, Rev $4.16B v $3.92Be

TUES 11/17
AMZN Introduces Amazon Pharmacy: Prescription Medications Delivered; Prime members receive free two-day delivery and up to 80% savings when paying without insurance
WMT Reports Q3 $1.34 v $1.19e, Rev $134.7B v $133.0Be
*(US) OCT INDUSTRIAL PRODUCTION M/M: 1.1% V 1.0%E; CAPACITY UTILIZATION: 72.8% V 72.3%E
HD CEO: We see no correlation in companies business as it relates to areas where Covid-19 cases are spiking - conf call comments
*(US) NOV NAHB HOUSING MARKET INDEX: 90 V 85E (record high)
(US) Atlanta Fed GDPNow raises Q4 GDP growth to 5.4% from 3.5%
(US) FDA: Lucira Health, Inc. Receives U.S. FDA Emergency Use Authorization (EUA) for Lucira COVID-19 All-In-One Test Kit, first COVID-19 Test for Self-Testing at Home (prescription required)
(US) Follow Up: Wayne County (most populous county in Michigan) board has unanimously voted to certify Nov vote (after 2-2 deadlock)

WEDS 11/18
*(UK) OCT CPI M/M: 0.0% V -0.1%E; Y/Y: 0.7% V 0.5%E
*(EU) EURO ZONE OCT FINAL CPI Y/Y: -0.3% V -0.3%E; CPI CORE Y/Y: 0.2% V 0.2%E
LOW Reports Q3 $1.98 v $1.97e, Rev $22.3B v $21.1Be
AAPL Announces App Store small business program from Jan 1st, 2021; Reduces App Store commission to 15% for small businesses (from 30%)
TGT Reports Q3 $2.79 adj v $1.61e, Rev $22.6B v $20.9Be; Lifts share buyback suspension and will resume in 2021; Guidance remains withdrawn
BA Formally granted FAA approval to resume Boeing 737 Max service (as expected)
*(US) OCT HOUSING STARTS: 1.530M V 1.460ME; BUILDING PERMITS: 1.545M V 1.568ME
(US) Trump campaign to file for recount in state of Wisconsin - Fox News
*(US) DOE CRUDE: +0.8M V +1ME; GASOLINE: +2.6M V -0.5ME; DISTILLATE: -5.2M V -1.5ME
(US) Atlanta Fed GDPNow raises Q4 GDP growth to 5.6% from 5.4%
GOOGL Plans to begin offering checking accounts with banks in updated Pay app
*(US) NEW YORK CITY SCHOOL SYSTEM WILL TEMPORARILY CLOSE TOMORROW, SAYS CHANCELLOR CARRANZA IN EMAIL TO PRINCIPALS - NYT
NVDA Reports Q3 $2.91 v $2.57e, Rev $4.73B v $4.42Be

THURS 11/19
FB Reportedly US state and federal antintrust lawsuits likely to challenge Facebook for buying Instagram & WhatsApp and weaponizing data - WaPo
*(TR) TURKEY CENTRAL BANK (CBRT) RAISES ONE-WEEK REPO RATE BY 475BPS TO 15.00%; AS EXPECTED
M Reports Q3 -$0.19 v -$0.81e, Rev $3.99B v $3.85B; says achieved positive EBITDA one quarter sooner than expected
*(US) INITIAL JOBLESS CLAIMS: 742K V 700KE; CONTINUING CLAIMS: 6.37M V 6.40ME
*(US) NOV PHILADELPHIA FED BUSINESS OUTLOOK: 26.3 V 23.0E
*(US) OCT EXISTING HOME SALES: 6.85M V 6.47ME
*(US) OCT LEADING INDEX: 0.7% V 0.7%E
GM To raise GM's financial commitment to EVs and AVs to $27B through 2025 (prior $20B); forecasts 40% of company's U.S. entries will be battery electric vehicles by end of 2025
JNJ Exec: expects to know COVID shot's efficacy in Jan or Feb - conf comments
(US) Treasury Sec Mnuchin sends letter to Fed's Powell requesting 90 day extension of Fed's Commercial Paper Funding Facility, Primary Dealer Credit Facility, Money Market Liquidity Facility, and Paycheck Protection Program Liquidity Facility
(US) Fed Bostic (dove, non-voter): Given where economy is, is prudent to keep emergency facilities open; Was a bit surprised by US Treasury decision [related to unused Fed stimulus funds]

FRI 11/20
*(UK) OCT RETAIL SALES (EX-AUTO/FUEL) M/M: 1.3% V 0.0%E; Y/Y: 7.8% V 5.9%E
ENX.FR Board approved purchase of Borsa Italiana: expects to complete the transaction in H1 of 2021
JPMorgan forecasts negative Q1 GDP (first Wall St bank to do so); expects bounceback in Q2 and Q3
(ZA) S&P cuts South Africa sovereign rating one notch to BB-; outlook Stable

TradeTheNews.com 

 Vaccine progress fuels speculation about post-Covid economy

2020-11-13T16:15:02.82

The week opened with a major bang after Pfizer and BioNTech announced their vaccine candidate against COVID-19 achieved success in the first interim analysis from a Phase 3 study, finding it to be more than 90% effective in preventing coronavirus. Immediately a historic risk on rally took flight. Pandemic-stricken sectors like travel and experiential entertainment saw money flood back in, at the expense of richly valued stay-at-home stocks that have fared so well in the current crisis. WTI crude jumped 10% helping drive significant flows into the energy complex. Treasury yields surged, highlighted by the 10-year moving back towards 1%, resulting in aggressive buying in the bank stocks, as well. Monday saw volatility collapse, US indices open at new all-time highs for the first time since February, and volumes explode with the NYSE running nearly 200% above its three month average.

The vaccine news set the stage for the rest of the week as markets largely pivoted around the notion that the time has come to start discounting a post pandemic landscape, juxtaposed with the current reality that virus infections are surging across much of the US and will likely necessitate localized, forced closures to stem the spread like this past spring. President Trump did not concede what he continues to describe as a rigged election even though more states were officially called in Biden’s favor and no evidence emerged of widespread vote tampering. The prospects for accomplishing anything during the lame duck session appeared bleak as neither the Republicans nor Democrats softened on their fiscal stimulus stances. Fed officials were out in force reiterating their view that additional fiscal help is imperative. Members of the Fed and ECB continued to call for more fiscal stimulus and emphasized they stand ready to do more if on the monetary front if necessary. By Friday’s close, WTI crude prices were holding above $40/bbl and the US 10-year edged away from a mid-week high above 0.97% which was the highest level since before the onset of the pandemic. For the week, S&P gained 2.2%, the DJIA added 4.1%, while the Nasdaq lost 0.6%.

In corporate news this week, with the height of earnings season in the rear-view mirror, Disney posted an EPS loss narrower than expected in its quarterly statement and reported its Disney+ streaming service has now hit 73M paid subscribers. DR Horton shares lifted after profits and revenue came in ahead of consensus, and the home-builder also saw a 50% jump in order growth in October. McDonalds notched beats on its top and bottom line and announced it was developing its own plant-based patty, justifiably dubbed the ‘McPlant,’ a product that Beyond Meat noted they had helped to develop. Southwest disclosed it has experienced a deceleration in improving revenue trends for November and December in recent weeks as coronavirus cases have risen. Apple at its product launch event confirmed its new Mac line will include the Apple-made M1 chip. Walmart launched a new pet care services division in a move to expand its full suite of animal offerings as dog and cat adoptions soar during the pandemic. EU antitrust regulators confirmed they would charge Amazon with distorting competition in online retail markets and said they would launch a second probe into its e-commerce business practices. The FAA reportedly is in the final stages of its Boeing 737MAX review and the aircraft could be approved by next week, though regulators will likely implement more fines against the aerospace giant going forward.


MON 11/9
(RU) Russia govt said to appoint Rushydro CEO Nikolai Shulginov as its new Energy Minister - press
PFE Pfizer and BioNTech announce vaccine candidate against COVID-19 achieved success in first interim analysis from Phase 3 study; Vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis (at seven days after the second dose)
MU Ships World’s First 176-Layer NAND, Delivering A Breakthrough in Flash Memory Performance and DensityNew 3D NAND boosts storage capability across mobile, automotive, client and data center applications
BA US FAA in final stages of Boeing 737MAX review; Said to be set to approve 737MAX by 18th of Nov - press
TUES 11/10
*(DE) GERMANY NOV ZEW CURRENT SITUATION: -64.3 V -63.5E; EXPECTATIONS SURVEY: 39.0 V 44.3E
Medicago announces positive Phase 1 results for its COVID-19 vaccine candidate
DHI Guides Q1 Rev $5.4-5.6B v $5.21Be, gross margin ~23%, home sales 17.5-18K, - earnings call
(US) Supreme Court Justices Roberts and Kavanaugh appear to be reluctant to strike down entire Affordable Care Act - press
(US) Democratic challenger Cunningham concedes North Carolina Senate race to Republican Tillis - press
RKT Reports Q3 $1.21 v $1.03e, Rev $4,63B v $4.34Be; Approves $1B share buyback (2.3% of market cap)
WEDS 11/11
(UK) EU-UK negotiators said to likely miss the mid-Nov deadline to reach a trade agreement - financial press
(IN) India said to announce new $20B stimulus package this week; package to focus on stressed industries and boosting employment - press
(US) Georgia Sec of State reportedly set to announce hand recount in presidential race - press
Medicago Confirms Positive Phase 1 Results for Its COVID-19 Vaccine Candidate
THURS 11/12
SIE.DE Reports Q4 Net €1.76B v €1.7Be, Industrial Business EBITA €2.64B v €2.0Be, Rev €15.3B v €15.3Be
*(UK) Q3 PRELIMINARY GDP Q/Q: 15.5% V 15.8%E; Y/Y: -9.6% V -9.4%E
AZN.UK Announces COVID-19's CALAVI drug Phase II trial did not meet the primary endpoint of increasing the proportion of patients who remained alive and free of respiratory failure
700.HK Reports Q3 (CNY) Net 38.5B v 30.5Be, Rev 125.5B v 124.0Be; says overall China advertising activity appears to have largely returned to normal conditions
*(US) OCT CPI M/M: 0.0% V 0.1%E; CPI (EX-FOOD/ENERGY) M/M: 0.0% V 0.2%E; CPI NSA: 260.388 V 260.474E
*(US) INITIAL JOBLESS CLAIMS: 709K V 731KE; CONTINUING CLAIMS: 6.79M V 6.83ME
*(US) DOE CRUDE: +4.3M V -1ME; GASOLINE: -2.3M V 0ME; DISTILLATE: -5.4M V -1.5ME
(US) Fed Chair Powell: US recovery has been faster than expected, though it has slowed and has been uneven; next few months will be challenging
*(US) TREASURY $27B 30-YEAR BOND AUCTION DRAWS 1.680%; BID TO COVER 2.29 V 2.14 PRIOR AND 2.28 OVER LAST 4 AUCTIONS
(CN) Trump Administration said to have finalized Executive Order to ban US purchases or sales of securities in Chinese companies with links to the China military - press
*(US) OCT MONTHLY BUDGET STATEMENT:-$284B V -$275.0BE
DIS Reports Q4 -$0.20 v -$0.68e, Rev $14.7B v $14.3Be
(CN) Former China Fin Min Jiwei: Time to study the exit of monetary policy, not fiscal policy; Even if Biden is US President, US China trade frictions will not necessarily be eased - Caixin Summit
FRI 11/13
*(EU) EURO ZONE Q3 PRELIMINARY GDP Q/Q: 12.6% V 12.7%E; Y/Y: -4.4% V -4.3%E
MMM Reports Oct Rev $2.9B +3% y/y; organic Rev +2% y/y
*(US) OCT PPI FINAL DEMAND M/M: 0.3% V 0.2%E; Y/Y: 0.5% V 0.4%E
(US) Fed’s Bullard (non-voter): downside risks to the US economy "remain substantial"; monetary and fiscal policy have been "very effective"
(US) NOV PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 77.0 V 82.0E
(US) NYC Mayor de Blasio: People should prepare for potential school closures; parents should have a plan for the rest of the month of November, beginning as early as Monday