Barron’s Weekly Market Updates – November 27, 2020
Friday, November 27, 2020
Stocks Rise During Thanksgiving Week. U.S. stocks finished the day and week in positive territory on Black Friday, with the technology-laden Nasdaq Composite leading the way higher in a holiday-shortened session. The Nasdaq Composite Index finished at a record on the session, ending up 0.9% at about 12,206, the S&P 500 index closed up 0.2% at 3638, and the Dow Jones Industrial Average eked out a 0.1% gain to close at 29,910, just below its milestone at 30,000. For the week, the Dow finished 2.2% higher, the S&P 500 logged a 2.3% gain, and the Nasdaq Composite ended nearly 3% higher. Equity markets close at 1 p.m. in the trading session after Thanksgiving.
U.K. Pushes for AstraZeneca Vaccine Approval Amid Questions Over Trial Data
The British government on Friday formally asked the country’s medicine regulator to assess the coronavirus vaccine candidate being developed by AstraZeneca and the University of Oxford, even though some experts have questions about its trial data.
The move “marks a significant first step” in getting the vaccine approved for deployment, should it meet the regulator’s requirements, the Department of Health and Social Care said.
It comes after the British drugmaker’s CEO Pascal Soriot told Bloomberg an additional study was needed following efficacy data released on Monday, which has since been questioned by a number of experts. However, Soriot said the development was unlikely to delay regulatory approval in the U.K.
Regeneron Is Allowed to Sell the Covid Antibody It Served Trump
Covid-19 patients hoping to avoid the hospital now have a second antibody treatment available to them. This past weekend, Regeneron Pharmaceuticals got an emergency-use authorization from the U.S. Food and Drug Administration to sell the cocktail of two antibodies that it supplied President Trump when he came down with the virus last month.
Eli Lilly received FDA authorization for a Covid antibody on Nov. 9. Both treatments are infusions of synthetic antibodies to the SARS-CoV-2 virus. Clinical trials showed that antibodies given to outpatients with mild to moderate Covid were able to sharply reduce blood levels of the virus and reduce emergency-room visits and hospital admissions by half. Neither the Lilly nor the Regeneron treatment has yet been shown to reduce Covid deaths. And a trial of Regeneron’s treatment in severely ill, hospitalized Covid patients was halted when some patients got worse. So the FDA’s authorization is only for mild-to-moderate patients who are at risk of hospitalization.
Salesforce.com is in advanced talks about buying workplace messaging app Slack Technologies, The Wall Street Journal reported Wednesday, citing people familiar with the matter.
Any deal for Slack would value the company at more than its current $17 billion market capitalization, the newspaper reported. The Journal said that some of the people indicated that a deal could be reached within days, but added that there was no guarantee the discussions would lead to a transaction.
Black Friday Sales: Amazon, Target, and Other Retailers to Watch
It’s Black Friday, and while today might not have as much importance this year, when the holiday shopping season started much earlier than usual, there are still plenty of deals to be had—and shoppers are taking advantage.
The Covid-19 pandemic has caused many retailers to eschew an early opening on Thanksgiving, but they were quick to advertise Black Friday deals online. Experts predict digital holiday sales will jump 35% this year. Companies are preparing for the rush. Amazon.com, which has been seeing a brisk business since the pandemic began, announced it will spend more than half a billion dollars on bonuses for frontline workers this season, while Target announced Cyber Monday will begin Sunday, with flash deals on Monday itself.
Former Federal Reserve Chairman Janet Yellen stands to become the first female U.S. Treasury secretary. She would be just the second person, however, to make the leap from the head of the central bank to the head of the Treasury Department, following G. William Miller from the Carter administration.
Yellen has decades of experience in economic policy making. She was a Fed governor from 1994-97, led the Council of Economic Advisers from 1997-99, was president of the Federal Reserve Bank of San Francisco from 2004-2010, and held the No. 2 job at the Fed from 2010-14, before moving into the top spot in 2014-18 when Ben Bernanke declined to be reappointed.
Employment News Is Worse Than Expected as Claims Rise Again
The number of people newly seeking unemployment benefits came in higher than expected for the week ended Nov. 21, offering more evidence that the path of the economic recovery remains uneven.
There were 778,000 people filing initial claims last week, marking an increase of 30,000 from the prior week’s upwardly revised figure, the Labor Department said. It was the second consecutive weekly increase, a sign of deterioration in the labor market.
New-Home Sales Are Still Ultrahigh. Properties Are Scarce.
New-home sales remained sky-high in historical terms in October as properties changed hands at a seasonally adjusted annual rate 41.5% above the year-earlier level, according to government data.
Sales slipped 0.3% to an annual rate of 999,000 from a revised September rate of 1,002,000, according to figures the Census Bureau and the Department of Housing and Urban Development released on Wednesday. The consensus call among Wall Street economists was for sales of 972,500.
Home Prices See Their Biggest Increase in 6 Years. Why the Surge Could Continue.
Home prices climbed to new highs in September at the fastest annual growth rate in multiple years, according to the latest S&P CoreLogic Case-Shiller index reading released Tuesday.
On a national level, home prices rose about 7% in September from the year prior, according to a news release. That’s faster than August’s annual increase of 5.8%, and the fastest annual increase since May 2014. Month over month, the index gained 1.4% on a seasonally adjusted basis.
Deere’s Blowout Earnings Are Good News for Caterpillar and Others
Deere capped off its fiscal year with blowout fourth-quarter numbers and better financial guidance for the coming fiscal year than Wall Street was projecting. It’s good news for both shareholders and investors looking for information about construction demand this coming year.
Deere earned $2.39 a share from $8.7 billion in equipment sales. Wall Street was looking for $1.49 in per-share earnings from $7.7 billion in equipment sales. Equipment sales for the latest quarter dropped about 1% year over year, but earnings per share were higher than a year earlier.
ViacomCBS Is Selling Its Book Publisher for $2.2 Billion
ViacomCBS has agreed to sell Simon & Schuster to the German media company Bertelsmann for nearly $2.2 billion in cash, the companies said. It’s a big number for the book-publishing subsidiary and a significant step in the continuing consolidation of that industry.
Since the merger of Viacom and CBS last year, the combined company has undertaken a review of its portfolio with an eye toward divesting divisions not core to its new streaming-focused mission. A sale of the book business, whose roster of authors includes Stephen King, Judy Blume, and Ernest Hemingway, had been expected soon. CBS’s “Black Rock” headquarters in midtown Manhattan is also for sale, the company has said.