Tuesday Morning Reads
- The Top Is In!
- Recovery Hopes
- Fresh Records for Major Indexes
- G.M. Scales Back Alliance
- Mishandled Virus
Wall Street closed lower yesterday, but enthusiasm about vaccines helped drive historical performances for the averages in November. The S&P 500 (SP500) rose 10.9% for the month, its best November ever. The DJIA (DJI) gained 11.9% for its best month (at any point in the year) since 1987, and the Nasdaq (COMP) rose 11.8% for its best November since 2001. Energy (NYSEARCA:XLE) was by far the best monthly sector performer, up more than 30%. Other cyclical plays like financials (NYSEARCA:XLF) and Industrials (NYSEARCA:XLI) placed second and third. Defensive sectors trailed in November, with utilities (NYSEARCA:XLU) actually falling into the red.
Moderna (NASDAQ:MRNA) earlier on Monday asked U.S. and European health regulators to authorize use of its COVID-19 vaccine after a full analysis of its pivotal study showed it to be 94.1% effective - with 100% efficacy in preventing severe infection. A panel of outside experts advising the U.S. FDA will meet Dec. 17 to review the evidence for Moderna's vaccine and vote on whether to recommend that the agency authorize its emergency use. A similar meeting has been set for Dec. 10 for the Pfizer (NYSE:PFE)/BioNTech (NASDAQ:BNTX) vaccine. It is unclear how long the FDA will take to make a decision, but Moderna CEO Stéphane Bancel says it is possible the agency could decide within a few days of the advisory panel meeting, or between Dec. 18-20. While both vaccines have shown more than 90% efficacy, mRNA-1273's less-rigorous distribution and shipping requirements give the Moderna drug a slight edge. Both nonetheless will be used given current production constraints. Moderna rose more than 20% yesterday, its market cap reaching $60B. It’s higher by another 12% in premarket action. (18 comments)
Completing its strategic review, Exxon (NYSE:XOM) expects 15% global workforce reductions by the end of 2021. Capital spending next year is seen at $16B-$19B, and then $20B-$25B annually through 2025. Next up is elimination of less strategic assets like certain dry gas resources in the Appalachian and Rocky Mountains, Oklahoma, Texas, Louisiana and Arkansas in the United States, and in western Canada and Argentina. That’s expected to produce a mammoth, non-cash, after-tax charge of $17B-$20B in Q4. CEO Darren Woods on the moves: "Continued emphasis on high-grading the asset base - through exploration, divestment and prioritization of advantaged development opportunities - will improve earnings power and cash generation, and rebuild balance sheet capacity to manage future commodity price cycles while working to maintain a reliable dividend." (144 comments)
Amazon.com (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) are teaming on a new cloud computing offering using Mac OS, a move to support a growing customer audience developing apps for Apple devices. Amazon Web Services will make Apple computers available in its data centers, starting with the Mac Mini. That will enable Apple developers to create and test apps remotely rather than maintaining their own machines. And those developers could help feed Apple's increasing pivot toward software and services. And it offers an edge (for now) over big-cloud rivals Microsoft (NASDAQ:MSFT) and Google (GOOG, GOOGL), which don't yet offer access to Macs. The initial computers will be a version of Mac Mini that has been previously available - they've just been adapted to work with Amazon's cloud and security infrastructure, and have Wi-Fi and Bluetooth turned off - but those will be updated as Apple launches new equipment (and Apple just unveiled a Mac Mini powered by its own M1 chip). (15 comments)
To review: Bitcoin (BTC-USD) started November at about $13.8K. On the Tuesday prior to Thanksgiving, it had come within a handful of dollars of touching its epic 2017 high just shy of $20K (also hit near Thanksgiving). By the time holiday meals had begun across the country last week, it had plunged to roughly $16.3K. It’s been rallying since, and crossed back over $19K on Monday, rising as high as $19,835 vs. the previous record of $19,782 set on Dec. 18, 2017.
"We are just getting started," said Grayscale's Michael Sonnenshein, appearing on CNBC. Addressing what some see as excessive speculation in crypto, Sonnenshein says inflows into Grayscale's various crypto vehicles don't indicate unhealthy investor fervor. Crypto-related names like Microstrategy (NASDAQ:MSTR), Riot Blockchain (NASDAQ:RIOT), and Marathon Patent (NASDAQ:MARA) all posted gains in the 20%-50% range on Monday. Bitcoin has pulled back a hair from yesterday’s record, currently selling for $19.5K. (97 comments)
What else is happening...
Zoom (NASDAQ:ZM) shares drop despite raising guidance and Q3 revenue that more than quadrupled.Sports betting in Colorado continues to grow.Thanksgiving slump at the pump points to weak Christmas for oil refiners.Wendy's (NASDAQ:WEN) joins with Rebel Foods in ambitious push for 250 cloud kitchens in India.
Monday's Key Earnings
In Asia, Japan +1.34%. Hong Kong +0.86%. China +1.77%. India +1.1%.
In Europe, at midday, London +1.92%. Paris +1.04%. Frankfurt +0.94%.
Futures at 6:20, Dow -0.57%. S&P -0.41%. Nasdaq +0.01%. Crude -0.1% to $45.29. Gold +1.13% at $1801. Bitcoin +6.8% to $19.781.7.
Ten-year Treasury Yield +15 bps to 0.857%
Today's Economic Calendar
8:55 Redbook Chain Store Sales
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:00 Powell Testifies Before Senate Banking Committee
11:00 Fed's Brainard: “Community Reinvestment Act Modernization”
1:15 PM Fed's Daly Speech
3:00 PM Fed's Evans Speech