Barron’s Weekly Market Updates – November 19, 2021
Friday, November 19, 2021
Nasdaq Posts 46th Record Close of 2021 Amid Broader Market Slump. The Nasdaq Composite index finished at a record high amid an otherwise lackluster end of the week for the broader market. The Nasdaq booked its 46th record closing high of 2021, gaining 64 points, or 0.4%, to close at 16,057. Meanwhile, the Dow Jones Industrial Average closed down 269 points, or 0.8%, at 35,602. The S&P 500 index ended the session down 7 points, or 0.1%, at 4698. For the week, the Dow closed down 1.4%, while the S&P 500 posted a weekly gain of 0.3%, and the Nasdaq Composite’s record run was aided by a weekly gain of 1.2%.
House Democrats Pass Biden’s Social-Spending Bill
House Democrats passed President Joe Biden’s cornerstone social-spending agenda Friday, which some have estimated at nearly $2 trillion, inching one step closer to passing it into law after months of stalled negotiations and an eight-hour filibuster attempt by Minority Leader Kevin McCarthy.
The Build Back Better bill contains funding for universal pre-K, paid leave, electric-vehicle tax credits, expanded Medicaid benefits, increased funding for Pell Grants, and other initiatives that Biden has been pushing for during his presidency.
“We have a Build Back Better bill that is historic, transformative, and larger than anything we have ever done before,” House Speaker Nancy Pelosi said Friday.
FDA Authorizes Pfizer and Moderna Covid-19 Vaccine Boosters for All Adults
Moderna and Pfizer both said early Friday that the Food and Drug Administration had expanded its emergency use authorizations for their respective Covid-19 vaccines to allow booster doses for all adults ages 18 and above.
Boosters were previously only authorized for adults who had initially received the Moderna or Pfizer vaccines if they were 65 or older, or if they were over 18 and worked in certain jobs or were at high risk of severe disease.
The Debt-Ceiling Debate Is Back. This Time, It’s Different.
When lawmakers return to Capitol Hill after Thanksgiving, they will revive an issue that brought both sides of the political aisle to the brink in October. The deadline to raise the nation’s debt ceiling is coming up, yet again.
Already there are signs this time may be different, however. Senate Majority Leader Chuck Schumer (D., N.Y.) and Senate Minority Leader Mitch McConnell (R., Ky.) met this week to discuss raising or suspending the debt ceiling by mid-December, the time when Treasury Secretary Janet Yellen expects the government to default on its debts without legislative action.
U.S. Government to Pay Pfizer $5.29 Billion for Covid-19 Oral Pill
The U.S. government has agreed to buy 10 million treatment courses of Pfizer‘s investigational Covid-19 oral antiviral pill in a $5.29 billion deal.
Pfizer asked the Food and Drug Administration on Tuesday to authorize the experimental pill, Paxlovid. The pill reduced the risk of hospitalization among 1,219 high-risk patients by almost 90% in advanced clinical trials. The trial recorded no deaths among people who took the treatment.
Congress Tries to Tackle Cryptocurrencies. Lawmakers Aren’t Getting Far.
Democrats and Republicans in Congress are staking out sharply divergent views on cryptocurrencies.
Speaking at a hearing this week, Democrats laid out a case for broad “guardrails” to protect consumers and investors—arguing that the markets have become rife with manipulation, fraud, and “stablecoin” tokens that could actually destabilize the broader financial system.
The U.S. Government and Bill Gates Get Behind Nuclear Power
Nuclear power got a boost from the infrastructure bill signed into law this week by President Biden, which could at the very least forestall the industry’s decline. With government support and the endorsement of major investors like Bill Gates, nuclear power looks as if it has a place in a carbon-free future.
The legislation sets aside $6 billion to help fund nuclear plants in danger of closing. Several plants have needed help from the states where they are located in recent years as other sources of electricity have become cheaper, and running nuclear facilities has not always been operationally profitable. A 2018 report from the Union of Concerned Scientists found that “more than one-third of U.S. nuclear plants are unprofitable or scheduled to close.” Having a federal financing program would ease the pressure on states and make it more likely plants could stay open.
Federal legalization of weed got a baby step closer this week, with the introduction of a Republican bill to decriminalize marijuana, but U.S. cannabis operators seem more willing to bet on state reforms.
Companies are waiting for recreational sales to start in New York, New Jersey, Virginia, and Connecticut after voters approved measures in those populous states. But the big votes on recreational weed will probably be in Florida and Pennsylvania.
Boeing is running into more delays correcting problems that have halted deliveries of its popular twin-aisle 787 jet, The Wall Street Journal reported Friday.
Boeing is slowing down production of 787 jets while it continues to correct quality issues discovered in recent months, according to the Journal. Boeing, without any problems or delays, would like to be making five 787 jets a month, but today’s rate is more like two a month. Large jets like the 787 cost much more than smaller planes like the 737 jet, but the sales volumes are lower.
Austria Imposes National Lockdown as Covid-19 Fears Rock Europe
A resurgence of coronavirus cases in Europe has sent Austria into a national lockdown, with Germany seemingly poised to reissue similar restrictions.
Austrian Chancellor Alexander Schallenberg said Friday that the country would head into a new national lockdown that could last up to 20 days, starting Monday, which would include the closing of all nonessential shops. The country will also institute the first Covid-19 vaccination mandate in Europe, requiring all citizens to be vaccinated by law as of February 2022.
J&J Says Its Drug Pipeline Is Being Underestimated
Days after announcing plans to shed its consumer-health division, Johnson & Johnson made the case that Wall Street is dramatically underestimating the growth potential of its pharmaceutical business.
At a company event this week, the company detailed a drug pipeline that it says will lead to $60 billion in revenue for the pharmaceutical division in 2025. That is well above the $55.4 billion that company watchers currently expect the division to generate that year, according to FactSet.