Plus, coronavirus cases continue to spike in the U.S. on the eve of Election Day, two mall owners filed for bankruptcy protections, and Dunkin Brands as agreed to be acquired by Inspire Brands.
Stocks were higher to start Monday with the Dow adding 250 points, or 1%. The S&P 500 gained 1%, while the Nasdaq rose 1.1%.
Election Day Eve. Ahead of tomorrow’s election, former Vice President Joe Biden is holding a national lead over incumbent President Donald Trump, with an NBC News/Wall Street Journal poll showing 52% of support for Biden versus 42% for Trump. A report from Axios said that Trump told associates that he intends to declare victory early if the results show him ahead, even if the outcome is not fully known, and Trump told reporters this weekend that he intends to send his lawyers to battleground states “as soon as the election is over” to dispute results. Biden said in response that he won’t let Trump declare an early victory before the election results are clear, which could take weeks. “My response is the president is not going to steal this election,” Biden told reporters in Philadelphia. “The world is still largely in a holding pattern as investors await clarity on the U.S. election,” said Adam Crisafulli, founder of Vital Knowledge, in a note. “The world will likely be a lot clearer in just a few days thanks to the election being over, stimulus talks resuming in Washington, [and] further central bank support.”
As the election looms, the spike in coronavirus cases in the U.S. continued over the weekend, with more than 81,400 new infections reported on Sunday. Dr. Anthony Fauci said in an interview with The Washington Post, “We’re in for a whole lot of hurt. It’s not a good situation. All the stars are aligned in the wrong place as you go into the fall and winter season, with people congregating at home indoors. You could not possibly be positioned more poorly.” Fauci added that the U.S. needed to make an “abrupt change” in public health practices and behaviors, and that the nation could surpass 100,000 new coronavirus cases a day and a rising death counts in the coming weeks. As of Monday morning, confirmed cases in the U.S. have risen to 9.2 million, while nation’s coronavirus death count has risen to more than 231,000.
In earnings news, Clorox shares are up nearly 5% this morning after it reported its strongest quarterly sales growth in more than two decades and raised its full-year revenue guidance as the coronavirus continues to fuel demand for home cleaning products and disinfectants. Clorox reported fiscal first quarter earnings of $3.22 per share, up 103% year-over-year and well ahead of Wall Street’s consensus estimate for $2.32 per share. Net sales in the quarter rose 27%, the biggest quarterly jump since 1998, to $1.92 billion. “Clorox just reported its best quarter since the start of the COVID-19 pandemic, which is saying a lot given how strong demand has been for its products throughout,” Barclays analysts wrote in a note.
Mall owners CBL & Associates and Pennsylvania Real Estate Investment Trust have both filed for Chapter 11 bankruptcy protections as the coronavirus continues to put pressure on the retail real estate industry. Pennsylvania REIT, the largest mall owner in Philadelphia, filed its petition to execute a prepackaged financial restructuring plan, saying that it plans to unlock $150 million in new borrowing in an effort to recapitalize the business and extend its debt maturities. While CBL, which operates 107 properties across 26 states, in its filing, listed estimates assets and liabilities in the range of $1 billion to $10 billion. “After months of discussions and consideration of a number of alternatives, CBL’s management and the Board of Directors firmly believe that implementing the comprehensive restructuring… will provide CBL with the best plan to emerge as a stronger and more stable company,” CBL CEO Stephen Lebovitz said in a statement.
And Dunkin Brands has agreed to be acquired by Inspire Brands for $11.3 billion, including debt, bringing chains like Arby’s and Dunkin Donuts under the same umbrella in one of the largest ever deals in the restaurant space. Inspire Brands, which owns Arby’s, Buffalo Wild Wings, and Sonic Drive-In, said its all-cash deal to take the owner of the Dunkin Donuts and Baskin-Robbins chains private would value it at $106.50 per share. “Today’s announcement is a testament to our world-class group of franchisees, licensees, employees, and suppliers who have worked together to transform Dunkin’ and Baskin-Robbins into modern, relevant brands,” Dunkin’ Brands CEO Dave Hoffmann said in a statement. “This team’s grit and determination has enabled us to deliver outsized performance and made our brands among the most elite in the quick service industry. I am particularly proud of our actions since March of this year. During the global pandemic, we have stood tall. We’ve had each other’s backs and are now stronger than ever.”
Stocks We’re Watching
Five9 Inc (NASDAQ: FIVN): Five9 shares gained as much as 9% on Friday after the cloud contact center software provider reported third quarter revenue that rose 34% year-over-year to $112.1 million. “We delivered outstanding third quarter results with revenue of $112.1 million, growing 34% year-over-year and 12% sequentially, both all-time highs for us as a public company, and Adjusted EBITDA margin was 21.5%, also a third quarter record. Positive industry trends continue to accelerate and help drive our performance,” said Five9 CEO Rowan Trollope. “The contact center is the new front door for many businesses. We believe the premise to cloud transition and digital transformation trends will accelerate, and demand for AI driven automation will increase, placing Five9 at the forefront of a massive opportunity. We continue to execute on our go-to-market initiatives, which balance the strength of our direct salesforce with a diverse group of channel partners. Additionally, we are receiving very positive feedback on the enhanced product capabilities we have delivered over the last quarter. Finally, today we announced the execution of a definitive agreement to acquire Inference Solutions Inc. (“Inference”), a leader in the emerging Intelligent Virtual Agent market. Leveraging virtual agents to meet increasing customer interactions is rapidly becoming a requirement of the modern contact center. We are excited to build upon this acquisition and believe we are well positioned for continued growth.”