Plus, coronavirus cases hit a record in states ahead of Election Day, Wayfair reported a 66% rise in revenue, and Ant Group’s global record-setting IPO was suspended in Shanghai.
Stocks were higher to start Tuesday with the Dow gaining 577 points, or 2.1%. The S&P 500 added 1.8%, while the Nasdaq rose 1.5%.
Election Day 2020 is finally upon us as Americans head to the polls across the nation. Nearly 100 million ballots have already been cast through early in-person voting and mail-in ballots, with millions more expected to vote throughout the day today. Stocks have rallied this morning as the market hinges its hopes on a winner for president being declared tonight, however, this year’s surge of mail-in voting due to the coronavirus pandemic may mean the final result will be delayed for days, or even weeks. “A declared winner would certainly be better for these markets, agnostic of who it is,” said Art Hogan, chief market strategist at National Securities. “If we wake up tomorrow and we don’t have a clear winner, that shouldn’t surprise the market. But if we’re talking about this in the middle of next week and about court cases and recounts, that’s going to be the worst-case scenario.”
Ahead of Election Day, coronavirus cases hit record highs in 21 states, including key swing states Michigan, Ohio, and Pennsylvania. As the outbreak continues its unrelenting surge across the U.S., former FDA Commissioner Dr. Scott Gottlieb warned that the country will likely see more than 1,000 COVID-19 deaths per day for a “sustained period of time.” “We’re probably going to see significant spread across the entire United States in a confluent epidemic that we’re much better prepared to deal with, so I don’t think that we’re going to see the excess death that we saw with the first wave of this pandemic when it struck New York,” Gottlieb said. “But the sheer fact that we’re going to be infecting so many people right now is probably going to mean that the death tolls get well above 1,000 for a sustained period of time.” In a leaked memo, Dr. Deborah Birx, coordinator of the White House coronavirus task force, said, “We are entering the most concerning and most deadly phase of this pandemic… leading to increasing mortality. This is not about lockdowns. It hasn’t been about lockdowns since March or April. It’s about an aggressive balanced approach that is not being implemented.”
Humana shares are up more than 4% this morning after delivering a beat on third-quarter profit estimates and raising the lower end of its full-yer adjusted profit forecast. The health insurer posted earnings per share of $3.08, beating analysts’ estimates for earnings of $2.81 per share. Ferrari shares are up 8% after it said it earned $1.08 per share on $1 billion in sales in its third quarter, while analysts expected earnings per share of $0.96 on $1 billion in sales. Wayfair reported revenue of $3.8 billion, up 66.5% from a year earlier and ahead of Wall Street expectations for $3.65 billion. “In the midst of continued uncertainty about the economy and the pandemic, Wayfair delivered another quarter of strong operating and financial results,” CEO Niraj Shah said in a statement. “Category momentum is vibrant, demand is moving online at an accelerated pace, and we expect the home to be even more important than usual when it comes to celebrating the holidays this year. Our long-term mind-set and strategic investments in merchandising, selection, service and delivery both in North America and in Europe are translating to share gains, sustained profitability, and positive free cash flow generation. While today’s unique environment has accentuated these trends, we are confident that there is a long runway for continued strong profitable growth ahead for Wayfair—well beyond when the current circumstances have passed.”
Apple announced another big event for November 10, where it’s expected to announce new Macs. The tagline on the invites for the live-streamed event was “One More Thing,” and Apple said earlier this year that it planned to release new Macs with its own chips based on ARM, instead of Intel, processors. Apple has held launch events in the past two months focusing on new Apple Watch and iPhone 12 models. In a research note from earlier this year, TF Securities analyst Ming-Chi Kuo said Apple could launch an iMach desktop with a new design and laptops using the new Apple chips. “We expect that ARM Mac models outperform Intel Mac models by over 50%-100%,” Kuo said at the time. Mac sales have been a highlight for Apple during the pandemic, with Apple reporting $9 billion—up 28% year-over-year—in Mac sales in the quarter ending in June.
And Ant Group’s world record-setting IPO in Shanghai and Hong Kong was suspended today with China derailing the company’s $35 billion share sale. The Shanghai stock exchange suspended the listing after Jack Ma was called in for “supervisory interviews” by related agencies, according to a statement, due to “significant change” in the regulatory environment and “such major issues could lead to your company no longer complying with requirements on listing or information disclosure.” “It’s a pretty bad look, where you have a China company conducting the world’s largest IPO, locking in billions from global investors and getting halted on the eve,” said Yu Tianjiao, a Hong Kong-based analyst from Sanford C. Bernstein. “Longer term, investors are going to reevaluate Ant’s price, people who gave it lofty valuations as a tech company will have to start thinking about it more as a financial services firm and question the growth potential.”
Stocks We’re Watching
Assurant Inc (NYSE: AIZ): Assurant shares gained nearly 5% yesterday after reporting third quarter earnings. The company reported a net loss of $34.9 million, or $0.58 per share, compared to the prior year period net loss of $59.5 million, or $0.96 per share. “Our third quarter 2020 performance further underscores the resiliency and strength of our market-leading lifestyle and housing businesses, and the attractive growth opportunities ahead,” said Assurant President and CEO Alan Colberg. “Given favorable year-to-date loss experience in Global Housing, we are raising our 2020 outlook to 17 to 21 percent growth in net operating income per share, excluding catastrophe losses. With our recently announced acquisition of HYLA Mobile and the evaluation of strategic alternatives for Global Preneed, we can deepen our focus on the many opportunities being driven by the convergence of the connected mobile device, car and home. Combined with our differentiated P&C offerings, we expect to sustain above-market growth and deliver superior cash flow long term.”