Market Recap Week Ending December 11th
Monday – Dow (148) to 30,069 Nasdaq +55 to 12,519 (record high) and the S&P (7) to 3,691. The Dow and the S&P were down because of the unwavering increase in Covid19 cases and the new restrictions being implemented across the country and especially in California. The seven-day average of new cases hit 196,200, a 20% increase from a week ago. Northern California’s 5 Bay Area counties shut down all non-essential businesses apart from retail (20% maximum capacity) and restaurants (take out only). As a result, the reopening trade is taking on water and the stay-at-home names continue to outperform. Only three of the eleven S&P sectors were up today; Communication Services, Utilities, and Tech. Energy was the biggest laggard, down 2.44%…All Quiet on the Stimulus Front: although Senator Mark Warner said that a bill was closer to getting done on Sunday, there was no new news today…Tesla (TSLA) became only the sixth company to reach a $600 billion valuation today. Shares rallied 7.1% today and the company has added $100 billion to its market cap in the last nine trading sessions. Tesla is scheduled to be added to the S&P 500 on December 21st…Pfizer is to meet with FDA regulators on Thursday for emergency use of their Covid19 vaccine. If the FDA gives approval, shots will be available on a limited basis as soon as December 21st. DoorDash (DASH) and Airbnb (ABNB) are scheduled to IPO on Wednesday and Thursday, respectively. Both boosted their target prices from $75-$85/share to $90-$95/share (DASH) and from $44-$50/share to $56-$60/share (ABNB)….
Tuesday – Dow +104 to 30,173 Nasdaq +62 to 12,582 (record high) and the S&P +10 to 3,702 (record high). Six of the eleven S&P sectors traded higher today with the volatile energy sector leading the charge up 1.57%…Pfizer (PFE) began distributing its Covid-19 vaccine in the UK today. Johnson and Johnson (JNJ) rallied 1.7%, Moderna (MRNA) rose 6.5% and PFE was up 3% on the news. Elsewhere on the Covid-19 front, the U.S. has added 1 million new Covid-19 cases in the last 4 days…FireEye (FEYE) one of the largest cybersecurity companies in the U.S. was hacked by a nation state identified as Russia. The hackers targeted government agencies that are customers of the company as well as tools used to test cybersecurity defenses…Stitch Fix (SFIX) shares rocketed up 39% on a massive earnings beat…The House passed the National Defense Authorization Act (NDAA) with a veto proof margin. The President has vowed to veto the bill unless lawmakers use the NDAA to repeal Section 230 of the Communications Decency Act which would make social media companies liable for the content posted on their sites and is completely unrelated to the defense bill. The NDAA also contains a provision to strip military bases of Confederate General’s names. The bill now heads to the Senate…DoorDash (DASH) priced its IPO at $102, higher than its upwardly revised range of $90-$95/share. Shares will begin trading tomorrow morning…Senator McConnell dropped his insistence on liability protection for corporations against Covid19 liability but tied his concession to eliminating state and local government help from the stimulus bill. Democrats immediately rejected the tradeoff. There is still no talk regarding stimulus checks….
Wednesday – Dow (105) to 30,068 Nasdaq (243) to 12,338 and the S&P (29) to 3,672. Stocks opened higher and promptly sold off until staging a brief rally into the bell. Eight of eleven S&P sectors traded down with Tech in the rearguard down 1.88%…Speaking of tech, Facebook (FB) was sued by the Federal Trade Commission, 46 states, Guam, and the District of Columbia. The suit requests that the company be broken apart due to anti-trust practices; the stock traded down 1.93%…DoorDash (DASH) debuted today and priced at $102/share after revising their target price to $90-$95 on Monday night. The stock opened at $182 and closed @ $189.51…Tomorrow, Airbnb (ABNB) will IPO. The deal has been priced @ $68/share, above their recently revised range of $56-$60/share…Tesla fell 7% after JPMorgan placed a $90/share price target on the company (TSLA closed at $604.48/share today). Stimulus talks are dragging on again. The White House got back in the game for the first time since prior to the election and pitched a deal with $600 one time check but would not include extending the jobless benefits of $300/week that were included in the original bipartisan proposal. The Democratic leadership pronounced the administration’s proposal DOA…Tomorrow the FDA is poised to grant emergency use approval to Pfizer (PFE) for their Covid-19 vaccine. The first doses were injected into patients today in the UK and if as expected, approval is granted tomorrow, patients in the U.S. could begin receiving the vaccine as soon as December 21…
Thursday – Dow (69) to 29,999 Nasdaq +66 to 12,405 and the S&P (4) to 3,668. Jobless claims were horrendous. After outperforming last week and beating expectations by 63k claims, the number came in today at 815k claims vs expectations of 725k claims. This is the first time claims have climbed above 800k since October 15th, when they registered at 898k…Only three of the eleven S&P sectors were positive today; Energy +2.93%, Financials 0.16%, and Technology +0.07%. The story of the day was Airbnb (ABNB). The hospitality stock went public today at $68/share, opened at $146/share, and rallied to $165 before closing at $144.71… After the close, the FDA advisory panel recommended approval for Pfizer’s Covid-19 vaccine as expected. A final decision by the FDA is expected as soon as tomorrow and if approved, doses of the vaccine will ship immediately to all 50 states…The Senate, is as usual, playing its role of reactionary body, and is on the verge of shutting down the government. One of the two great Senators from Kentucky, Rand Paul, is filibustering the NDAA bill that was discussed yesterday, and the stimulus bill remains on life support as the other great Kentucky Senator, Mitch McConnell, will only drop corporate liability immunity if support for state and local governments is also dropped. Senators Bernie Sanders (I-VT) and Josh Hurley (R-MO) are pushing for an up or down vote on a new round of $1200 stimulus checks….
Friday – Dow +47 to 30,046 Nasdaq (69) to 12,377 and the S&P (5) to 3,663. All three indices finished the week in the red as the markets saw no end in sight to the stimulus negotiations. Congress did pass a stopgap spending bill to avoid a government shutdown until December 18th…Disney’s 4-hour investor day was the talk of the Street; the stock popped 13.59% on the strength of its 86.8 million Disney + subscribers along with the incredible monetization of the Marvel, Star Wars and Pixar franchises across their toy, movie and theme park platforms…The FDA granted emergency use approval (EUA) to the Pfizer (PFE) and BioNTech (BNTX) Covid-19 vaccine; doses could be administered as soon as Monday or Tuesday according Alex Azar, Secretary of Health and Human Services. Moderna’s vaccine is expected to receive EUA as soon as next week…The Senate actually passed a piece of legislation today; the NDAA was forwarded to the President with veto proof approval from both houses of Congress. The President has threatened to veto the bill over several provisions included within.
The week in review…Dow (172) or (0.56%) NDAQ (87) or (0.70%) and the S&P (36) or (0.97%). The major themes for this week were Covid-19 infections and deaths, the approval of Pfizer’s vaccine and the stimulus bill. As I noted last week, yesterday was the two-week anniversary from the Thanksgiving holiday when more than 1 million Americans travelled for the holiday. And what do you know, more than 200,000 cases were reported for the fourth straight day, including more than 220,000 cases yesterday along with a new record of 3,157 deaths on Wednesday and another 2,923 dead yesterday. With the approval of the Pfizer vaccine and the anticipated approval of Moderna’s next week, much needed help is on the way…The stimulus plan is the definition of Lucy holding the football for Charlie Brown. Just as the beloved Peanuts character was never be able to kick the football, a meaningful stimulus bill will not be passed barring a change of leadership in the Senate…Next week brings the last full trading week of the year before the Christmas and New Year’s holidays. Undoubtedly, there will be more fuss and volatility over the stimulus bill. On Wednesday, November Retail Sales will be reported. Friday is quadruple witching, whereby market index futures, market index options, stock options and stock futures all expire, usually resulting in increased volatility. To top the week off, at the close on Friday, Tesla (TSLA) will be added to the S&P 500. Market observers are expecting the largest market on close order in the history of the exchanges to facilitate the requisite purchasing needed to be done by the buy side.
P.S. If you know of any friends or family members who could benefit from our services and these types of communiques during these unique times, we are here to help.
Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities…AMZN, AAPL, Bitcoin (physical), Chainlink (physical), GBTC, GOOGL, LAZR, MSFT, NFLX, TSLA, and VLDR.