Early Look

Wednesday, December 30, 2020

Stock futures in the U.S. are looking higher, rebounding after yesterday’s choppy trading session after hitting record intraday highs, as investors worried about the path of economic reopening and whether the Senate would authorize additional pandemic aid checks (greater amounts of $2,000 vs. the $600 approved last week). Stocks edged lower for the most part on Tuesday, though the Russell 2000 SmallCap index, which is on track for its best quarterly return ever (as per CNBC), dropped nearly 2% in a bout of profit taking. Market gains were erased yesterday midday after U.S. Senate Majority Leader Mitch McConnell blocked immediate consideration of the measure calling for an increase in stimulus payments from $600 to $2,000. Final passage of the proposal would require 60 votes and the backing of a dozen Republicans. More positive vaccine news helping market sentiment overnight as the University of Oxford and AstraZeneca (AZN) coronavirus vaccine has been authorized for emergency use in the U.K., which has ordered 100M doses of the shot. In Asian markets, The Nikkei Index fell -123 points to 27,444, the Shanghai Index rose 35 points to 3,414 and the Hang Seng Index jumped 578 points to 27,147. In Europe, the German DAX is slightly higher by 10 points to 13,770, while the FTSE 100 is up a few points to 6,610. Investors are now turning their focus from the fight over stimulus payments to the coming Senate runoff election in Georgia on Jan. 5, which could swing the balance of power to the Democrats in the upper chamber of Congress. In economic data, the National Association of Realtors will release its Pending Home Sales Index for November, the Census Bureau will report the international trade balance in goods for November, and the Institute for Supply Management will release its Chicago Purchasing Managers Index for December. Bitcoin prices continue its meteoric surge, up 2.8%, nearing the $28,000 level again (which was reached this past weekend).

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -8.32 points, or 0.22%, to 3,727.04

·     The Dow Jones Industrial Average fell -68.30 points, or 0.22%, to 30,335.67

·     The Nasdaq Composite slipped -49.20 points, or 0.38%, to 12,850.22

·     The Russell 2000 Index declined -36.89 points, or 1.85% to 1,959.36

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:30 AM EST      Advance Goods Trade Balance for November…prior (-$80.42B)

·     9:45 AM EST      Chicago PMI for December…est. 57.0

·     10:00 AM EST    Pending Home Sales MoM for November…est. 0.0%

·     10:30 AM ET      Weekly DOE Inventory Data

Sector News Breakdown

Energy, Industrials and Materials

·     The American Petroleum Institute (API) reported that U.S. crude inventories fell 4.8 million barrels last week, saw a 718,000 barrel drop in gasoline inventories and a 1.88-million-barrel fall in distillate stocks. Official figures from the Energy Information Administration are due Wednesday morning.

·     Matthews (MATW) files to sell 3M shares of Class A common stock

·     Vectrus Systems (VEC) has been awarded an $882M cost-plus-fixed-fee contract for operation, maintenance, and defense of Army communications.

Financials

·     RentPath has terminated the agreement to be acquired by CoStar Group (CSGP) following the FTC’s decision to sue to block the transaction.

Healthcare

·     The University of Oxford and AstraZeneca (AZN) coronavirus vaccine has been authorized for emergency use in the U.K., which has ordered 100M doses of the shot

·     Moderna (MRNA) confirmed that the company is engaged in discussions with the government of South Korea to potentially provide 40M or more doses of the Moderna COVID-19 Vaccine to support South Korea’s aim of providing vaccines to the public as soon as possible

·     Osmotica Pharmaceuticals (OSMT) -30%; said the FDA has issued a Complete Response Letter regarding the company’s New Drug Application seeking approval for the investigational agent arbaclofen extended-release tablets to treat spasticity resulting from multiple sclerosis

·     Regeneron (REGN) announces encouraging initial data from covid-19 antibody cocktail trial in hospitalized patients on low-flow oxygen; first antibody therapy to demonstrate anti-viral effect in patients hospitalized with covid-19

·     Sundial Growers (SNDL) closed the acquisition of a special purpose vehicle for consideration of C$58.9M in cash utilizing available cash reserves of C$110M prior to investment closure

·     An affiliate of China’s state-owned drug maker Sinopharm said its COVID-19 vaccine showed 79.34% efficacy and it has requested regulatory approval of the shot, moving a step closer to become China’s first approved vaccine for general public use – Reuters

Technology, Media & Telecom

·     JD.Com’s (JD) board authorized company to explore feasibility of potential spin-off of JD cloud &AI business to Jingdong Digits Technology in exchange for certain equity interest in JD Digits

·     China’s market regulator said on Wednesday it has fined JD.Com Inc (JD), Alibaba’s (BABA) Tmall and Vipshop (VIPS) 500,000 yuan ($76,656.55) each for irregular pricing

·     Apple Inc’s (AAPL) copyright infringement claims against Florida startup Corellium was dismissed by a Federal judge; Correllium’s software helps security researchers find vulnerabilities in Apple products including the iPhone

·     MicroVision (MVIS) entered into a $13M At-the-Market (ATM) equity offering agreement