Dow to Fall Slightly After Closing Above 30,000 for First Time
Stock futures are pointing to a narrowly mixed Wall Street open, a day after the Dow Jones Industrial Average jumped past the 30,000 mark for the first time. Dow futures implied a roughly 30-point decline at the open, while S&P 500 futures were little changed. Futures for the tech-heavy Nasdaq were slightly higher.
The Dow is up more than 13% this month and is on track to post its best monthly gain since 1987. Possibly lost in the fuss over Dow 30,000 is that the S&P 500 also posted a record close Tuesday — and that the Dow’s 2020 performance pales in comparison to other major averages. The Dow is up just 5.3% this year, compared with 12.5% for the S&P 500 and 34.2% for the Nasdaq Composite. The Dow and S&P 500 were joined Tuesday in record territory by the small-cap Russell 2000, as well as the Dow transports.
The economic calendar is jampacked today with the markets closed Thursday for Thanksgiving and only a half-day of trading Friday. At 8:30 a.m. ET, the Labor Department is out with its weekly look at initial jobless claims, expected to fall to 733,000 for the week ended Nov. 21 from 742,000 the prior week.
At the same time, the government’s October report on durable goods orders is expected to show a 0.6% increase compared with September’s 1.9% jump. A second look at third-quarter GDP is also out at 8:30 a.m. ET, with the annual economic growth rate expected to be the same 33.1% that was reported a month ago.
October personal income and spending are out at 10 a.m. ET, with income expected to be down 0.1% and spending seen rising 0.3%. In September, income had risen 0.9% while spending rose 1.4%.
Also at 10 a.m. ET, the government’s new home sales report for October should show a 1.5% increase to an annual rate of 973,000 units, according to consensus forecasts. And the University of Michigan’s final November consumer sentiment index is expected to stay at the mid-month level of 77.
All that may get less attention than the minutes of the Federal Reserve’s most recent Open Market Committee meeting, which are set to be released at 2 p.m. ET.
Deere (DE) is the only company of note releasing quarterly earnings this morning, while there are no companies scheduled to issue quarterly numbers after today’s closing bell.
IN THE NEWS TODAY
Doctors are advising public health officials and drugmakers to warn Americans that coronavirus vaccines may have rough side effects, in hopes of ensuring people are not scared off from receiving a second shot. Vaccines from Pfizer (PFE) and Moderna (MRNA) both require two inoculations. “We really need to make patients aware that this is not going to be a walk in the park,” Dr. Sandra Fryhofer of the American Medical Association said during a meeting of an expert panel that advises the Centers for Disease Control and Prevention. “They are going to know they had a vaccine. They are probably not going to feel wonderful. But they’ve got to come back for that second dose.”
Coronavirus cases continue to rise in the U.S., with the seven-day average of new infections now at a record-high 174,225, according to a CNBC analysis of data compiled by Johns Hopkins University. That is up 10.6% compared with last week. Hospitalizations for Covid-19 patients are growing in 44 states and Washington, D.C. However, in Europe, new cases have declined about 6% in the past week, which follows a 10% fall in the prior week, according to the World Health Organization. It’s an indication that the second round of lockdowns in many European countries are slowing transmission. Deaths in Europe, however, account for about half of new global fatalities. (Associated Press)
* EU says first virus vaccinations possible by Christmas (Associated Press)
President-elect Joe Biden will begin to get the classified presidential daily briefing, as the Trump administration’s delayed embrace of the formal transition of power moves forward. Biden’s team also has now been briefed on the current administration’s response to the coronavirus pandemic, Health and Human Services Secretary Alex Azar said Tuesday. That comes after Biden and his advisors had been warning that a failure to coordinate with the Trump administration could have devastating consequences, particularly around vaccine distribution. (CNBC)
* Biden says Trump administration outreach has been ‘sincere’ as transition begins
* Republicans sue to stop Wisconsin vote certification (Associated Press)
The incoming Treasury secretary would need to obtain congressional approval to put back to use $455 billion in funds that the Trump administration is clawing back from Federal Reserve and other pandemic lending programs. That’s because Treasury Secretary Steven Mnuchin is putting the money into the department’s General Fund. Democrats criticized the move, although a Treasury spokesman denied the money will be off-limits because it will be moved from the Exchange Stabilization Fund. Biden is expected to name former Fed Chair Janet Yellen to lead the Treasury Department. (Reuters)
Purdue Pharma has pleaded guilty to three felonies related to the handling of its medication OxyContin, which came as part of a deal with prosecutors to resolve an investigation into the drugmaker’s role in the U.S. opioid crisis. Among the company’s criminal violations were illegal kickbacks to doctors and an electronic health-care records company, with the goal of keeping prescriptions flowing for the addictive painkiller. Purdue had settled earlier with the Justice Department over civil claims. Roughly 450,000 people have died in the U.S. from opioid-related overdoses since 1999. (Reuters)
YouTube cracked down on One America News Network after the right-leaning media organization posted a fake cure for Covid-19. OANN, which has been promoted by President Donald Trump as an alternative to Fox News, is barred from posting new videos and conducting livestreams for a week. YouTube, which is owned by Alphabet (GOOGL), had been facing criticism for allowing OANN to spread misinformation, including false claims about the presidential election. (CNBC)
STOCKS TO WATCH
Gap (GPS) reported quarterly earnings of 25 cents per share, missing consensus estimates by 7 cents, though the apparel retailer’s revenue did beat forecasts. Gap’s bottom line was hurt by increased marketing and shipping costs resulting from a shift to online shopping by consumers. The company’s online sales surged 61% during the quarter compared with a year ago.
Nordstrom (JWN) earned 34 cents per share for its latest quarter, compared with expectations of a 6 cents per share loss. Revenue did come in below forecasts for the retailer, partly because of a slide in demand for formal wear. Nordstrom saw a 37% jump in online sales.
HP Inc. (HPQ) beat estimates by 10 cents with adjusted quarterly earnings of 62 cents per share, with the computer and printer maker seeing revenue top estimates as well. A surge in laptop sales driven by homebound students and workers helped offset lower sales of office equipment.
Dell (DELL) earned an adjusted $2.03 per share for its latest quarter, well above the $1.40 consensus estimate, with revenue also coming in higher than Street forecasts. Its quarterly story was similar to that of rival HP, with a jump in demand for Dell’s desktop and laptop computers.
Viacom (VIAC) is near a deal to sell its Simon & Schuster book publishing unit to German media giant Bertelsmann for more than $2 billion, according to people familiar with the matter who spoke to The Wall Street Journal.
The government plans to send 6.4 million doses of Pfizer’s (PFE) COVID-19 vaccine to communities across the United States within 24 hours of FDA approval, according to government officials who spoke to The Washington Post.
The first batch of College Football Playoff rankings for the pandemic-altered season are out, but familiar faces are in the top four. Alabama is No. 1, followed by Notre Dame, Clemson and Ohio State. The University of Cincinnati checked in at No. 7, which is the highest ranking ever for a non-Power Five school. (Associated Press)