Closing Stock Market SummaryThe S&P 500 gained 0.4% on Thursday, setting intraday and closing record highs, as strength in the large growth stocks outweighed weakness in the value stocks. The Nasdaq 100, which is heavily exposed to mega-cap growth, rallied 1.3% to outdo the record-setting advance in the Nasdaq Composite (+0.8%).
The Dow Jones Industrial Average (-0.1%) and Russell 2000 (-0.1%) closed slightly lower, burdened by the losses in value stocks. The Russell 1000 Value Index fell 0.4%.
Two factors that catalyzed the outperformance of the Nasdaq 100 were noticeable drops in interest rates and positive earnings results and guidance from Qualcomm (QCOM 156.11, +17.63, +12.7%). The former was rooted in tempered rate-hike/inflation expectations after the FOMC meeting yesterday. The latter helped drive NVIDIA (NVDA 298.01, +32.03, +12.0%) to a 12% gain.
Accordingly, the S&P 500 information technology sector, which is home to the semiconductor stocks, rose 1.5%. The consumer discretionary sector (+1.5%) tied for the lead amid strength in Amazon.com (AMZN 3477.00, +93.00, +2.8%) and Tesla (TSLA 1229.91, +16.05, +1.3%).
The broader market, however, didn't look so hot with the ratio of advancing to declining issues favoring the latter at the NYSE and Nasdaq. Laggards were found in the financials (-1.3%), real estate (-1.1%), and health care (-0.8%) sectors.
Investors shied away from the rate-sensitive financial stocks amid the decline in Treasury yields: the 2-yr yield fell six basis points to 0.41%, and the 10-yr yield fell six basis points to 1.52%. The U.S. Dollar Index rose 0.5% to 94.32.
Moderna (MRNA 284.02, -61.90, -17.9%) held back the health care sector, and even the Nasdaq 100, with an 18% decline following some disappointing earnings news. Roku (ROKU 289.39, -24.27, -7.7%) was another high-profile earnings loser.
In other developments, WTI crude futures ($78.77, -2.04, -2.5%) extended their pullback below $80/bbl after OPEC+ agreed to maintain its current production schedule for December. The Joint Committee on Taxation said the Build Back Better Act will raise $1.5 trillion over 10 years in new taxes. Weekly jobless claims continued to trend in the right direction.
Reviewing Thursday's economic data:
- Initial jobless claims for the week ending October 30 decreased by 14,000 to 269,000 (consensus 277,000). Continuing claims for the week ending October 23 decreased by 134,000 to 2.105 million.
- The key takeaway from the report is that the declining level of initial claims fits the script of a labor market that is reportedly brimming with job openings.
- Third quarter productivity decreased 5.0% (consensus -1.5%) after increasing an upwardly revised 2.4% (from 2.1%) in the second quarter. Unit labor costs surged at an annual rate of 8.3% (consensus +5.8%) after increasing a downwardly revised 1.1% (from 1.3%) in the second quarter.
- The key takeaway from the report is that it was the lowest level of productivity since the second quarter of 1981 and reflects the labor cost pressures that are building with the weak productivity.
- The September trade deficit was worse than expected, hitting a record high $80.9 billion (consensus $71.0 billion) after an upwardly revised $72.8 billion deficit (from $73.3 billion) in August.
- The key takeaway from the report is the connection that supply chain issues, transportation bottlenecks, and COVID prevention measures have detracted from global trading activity.
Looking ahead, investors will receive the Employment Situation Report for October and Consumer Credit for September on Friday.
- S&P 500 +24.6% YTD
- Nasdaq Composite +23.7% YTD
- Russell 2000 +21.7% YTD
- Dow Jones Industrial Average +18.0% YTD
After Hours Summary: Busy earnings night -- EXPE +12.7%, DDOG +11.3%, SYNA +6.8%, YELP +5.2%, UBER +1% are higher; PTON down big -27.7% on weak outlook; CGNX -13.4%, OLED -4.9%, SQ -4.7% also lowerAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: GDYN +22.5%, BILL +14.8%, CFLT +13.5%, BIGC +13.3%, FROG +13%, EXPE +12.7%, DDOG +11.3%, GPRO +9.5%, FNKO +9.1%, BHF +8.3%, LGF.A +8.1%, CC +7%, SYNA +6.8%, IHRT +6.6%, NVAX +6.5% (also completes rolling submission to WHO for listing of NVX-CoV2373), CHUY +6.4% (also announces new $50 mln share repurchase auth), PINS +6.3%, AMEH +6.1% (also names new co-CEO), ATUS +5.8%, ENDP +5.3%, YELP +5.2%, TMST +5%, ATSG +4.9%, MP +4.9%, AL +4.8%, ALRM +4.8%, DK +4.8%, PCTY +4.8%, PRDO +4.8% (also extends stock buyback program), SHAK +4.7%, NET +4.5%, NWSA +4.3%, ANGI +3.9%, MNST +3.7%, AMN +3.6%, EOG +3.5% (also increases dividend, declares special dividend, authorizes share repurchase program), CVET +3.4%, MELI +3.4%, LYV +3.2%, CABO +3.1%, FTNT +2.9%, INGN +2.9%, IAC +2.7%, CWK +2.5%, ILMN +2.4%, CUBE +2.3%, AIG +2.1%, QDEL +2.1%, AXON +2.1%, MCHP +1.9% (also increases dividend), GMAB +1.6%, CYRX +1.5%, NKTR +1.5%, VXRT +1.5%, WW +1.4%, ED +1.2%, NTRA +1.2%, DVAX +1.2%, AOSL +1.2%, OXY +1%, UBER +1%, VIR +0.9%, VRAY +0.9%, MED +0.6%, CDXS +0.4%, FRT +0.4%, OHI +0.3%, OTEX +0.3%, SFM +0.2%, BGS +0.1%, DRH +0.1%, GDOT +0.1%, LOCO +0.1%, PFSI +0.1%
Companies trading higher in after hours in reaction to news: AMEH +6.1% (names new co-CEO), EVC +1.7% (acquires 365 Digital), MPLN +1.2% (stock offering), ENVA +1.1% (authorizes $150 mln share repurchase plan), NGCA +1% (Virgin Orbit to procure 20 flights of the LauncherOne rocket), HYRE +0.9% (announces expanded partnership to significantly increase car supply), SNCR +0.8% (will supply its personal cloud solution to Telkomsel, Indonesia's largest mobile operator), ASR +0.2% (reports October traffic), PNW +0.2% (increases dividend)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: PTON -27.7% (seeing a softer than anticipated start to DecQ), EBS -16.3%, PBYI -16%, CGNX -13.4% (also increases dividend), TRHC -12.7%, AXNX -12.3%, CMBM -11.8%, IRTC -9.3%, SLQT -9.2%, SWCH -8.5%, PGNY -7.9% (also CEO to become Exec Chairman; names new CEO), MITK -7.7%, TDC -7.7% (also announces collaboration with Amazon Web Services), CNDT -6.8%, VLDR -6.8% (also names new CEO), APPN -6%, REZI -6%, MNDT -5.6%, LTHM -5.5%, FND -5.1%, OLED -4.9%, SQ -4.7%, CLNE -4.1%, BE -3.8%, RKT -3.7%, ZGNX -3.7%, AVLR -3.4%, NLOK -3.2%, BL -3.1%, FSLR -3.1%, LLNW -3.1%, GMED -3%, RDFN -2.9%, WPM -2.9%, GSAT -2.7%, WELL -2.4% (also to acquire four senior housing portfolios for $1.3 bln; also forms partnership with Kisco Senior Living), GBT -2.2%, GKOS -2%, RUN -1.6%, MDRX -1.4%, NFG -1.3%, WWE -1.2%, DNLI -1.2%, CVNA -1%, PCOR -0.9%, AMH -0.8%, DBX -0.8%, HTA -0.7%, NPTN -0.3%, AGS -0.3%, RGA -0.2%, SWKS -0.2%, USM -0.2%, Y -0.2%, AGO -0.2%, GSKY -0.2%, MSI -0.1%, MTD -0.1%, MTZ -0.1%, ONTO -0.1%, PBA -0.1%, REG -0.1%, SXI -0.1%
Companies trading lower in after hours in reaction to news: MRUS -6% (stock offering), MOS -4% (files for mixed securities shelf offering), PRQR -3.7% (files for $300 mln mixed securities shelf offering; also stock offering), TRNO -3.4% (stock offering), FTCI -2.2% (awarded first solar project in Africa), NMM -1.5% (names new CFO and COO), REGN -0.6% (files mixed securities shelf offering), REAL -0.4% (provides business update for October), NRXP -0.4% (FDA declines to issue EUA for ZYESAMI for patients with Critical COVID-19 respiratory failure), SFT -0.3% (co-CEO stepping down), CNS -0.2% (names new CEO; also declares special dividend of $1.25/sh), UNM -0.2% (announces availability of Unum Vaccine Verifier), AMC -0.1% (to sell its popular AMC Theatres Perfectly Popcorn at non-movie retail locations), AEL -0.1% (commits $1 bln to Monroe Capital's software partnership), ITT -0.1% (files mixed securities shelf offering)
PROJECT SYNDICATE
Prominent economists and climate policy officials express their concerns that the agreements and solutions adopted at the Glasgow COP26 summit will offer few tangible results. “If the threat of devastating global warming fails to jolt the world into meaningful collective action, it is difficult to see what will. But as the United Nations Climate Change Conference (COP26) in Glasgow gets down to the nitty-gritty, many fear that governments will once again pretend to support the climate cause while hoping that others will solve the crisis and pick up the tab.”
BUSINESSWEEK
-GlobalFoundries hopes to turn profitable amid the chip shortage. After years of losses, the newly public company shifted its focus to the low end of the market.
-Private equity funds are touting investments that can help the environment and society, but the impact is hard to measure.
SCIENCE
-A debate over whether the U.S. National Institutes of Health (NIH) funded unacceptably risky virus research in China has cast a spotlight on federal funding of what are known as gain-of-function (GOF) virology experiments. But ScienceInsider has learned that the only GOF experiments the United States approved and funded under a 2017 policy—two influenza studies that kicked off controversy over GOF research 10 years ago—have ended.
THE LANCET
-The Covid-19 pandemic has created an increased urgency to strengthen mental health systems in most countries. Mitigation strategies could incorporate ways to promote mental wellbeing and target determinants of poor mental health and interventions to treat those with a mental disorder. Taking no action to address the burden of major depressive disorder and anxiety disorders should not be an option.
BRITISH MEDICAL JOURNAL
-For researchers who were testing Pfizer’s vaccine at several sites in Texas during the fall of 2020 speed may have come at the cost of data integrity and patient safety. A regional director who was employed at the research organization Ventavia Research Group has told The BMJ that the company falsified data, un-blinded patients, employed inadequately trained vaccinators, and was slow to follow up on adverse events reported in Pfizer’s pivotal phase III trial.
JIM CRAMER’S MAD MONEY
- POSITIVE: Marvell Technology, Adobe, Coupang, Sea Limited, Bank of America, Khosla Ventures Acquisition II, iStar
- CAUTIOUS: Himax Technologies, The Container Store
SPECULATIVE: Matterport
TALKING POINTS MEMO
- Midway through Thursday’s hearing on whether former President Trump can block a subpoena issued by the House Jan. 6 Committee for records from his administration, U.S. District Judge Tanya Chutkan had a question: Why was the panel asking for records going all the way back to April 2020?
POLITICO
-As Speaker Nancy Pelosi furiously worked to unite her caucus around a centerpiece of the party’s domestic agenda, Sen. Joe Manchin is making it clear that he’s not paying much attention to what the House is crafting, memorably saying Wednesday that he has “no idea” what they are doing.
THE HILL
-Progressives are declaring victory ahead of a possible vote Thursday on President Biden’s social spending and climate package, while saying they shouldn’t be blamed for their party losing the governor’s race in Virginia.
BETAVILLE:
Vodafone, the UK-listed telecoms group, has come under the spotlight amid a fresh round of takeover talk.
People following the situation have heard speculation Vodafone is being "looked at" by a mystery predator.
The identity of the potential acquirer interested in Vodafone isn't clear, said some of these people following the situation.
Last year Betaville Intelligence reported Vodafone was at the centre of bid speculation, with analysts suggesting a strategic acquirer, such as Comcast, from the US might be interested in the company.
However, people following the situation suggested this time round the potential acquirer eyeing Vodafone could be European and possibly a financial buyer.
Readers should be aware that Vodafone is currently buying back its own shares, suggesting the compant isn't in "live" takeover talks and that the mystery purchaser has yet to make a formal approach.
To be clear, the above story is UNCOOKED. In case you don't remember I have pasted the definition of UNCOOKED below: