Plus, the presidential election is down to just five key states, Qualcomm delivered a big earnings beat, and pot stocks soaring higher today.
Stocks were higher to start Thursday with the Dow gaining 613 points, or 2.2%. The S&P 500 added 2.4%, while the Nasdaq traded 2.6% higher.
The presidential election has come down to just a few states, with votes still being counted in Arizona, Nevada, Georgia, Pennsylvania, and North Carolina. According to the Associated Press, Joe Biden has 264 Electoral College votes out of the 270 needed to win the White House, while President Donald Trump has 214. Biden now needs to win just one additional outstanding state—such as Nevada with its 6 Electoral College votes, where he is narrowly in the lead, or Georgia, where his campaign believes mailed votes will push him over the top—assuming he can hold Arizona, a state the AP has already called in his favor but the Trump campaign says it can still win. A Biden win in Pennsylvania would also clinch the race. Even if Biden takes the White House, Democrats may fall short of the blue wave of support that they had hoped for that would have given them control of both chambers of Congress. Democrats would need to win three of the five Senate seats that are still undecided to leave the chamber with a 50-50 split.
U.S. daily coronavirus cases topped 100,000 for the first time on Wednesday, with 102,831 new COVID-19 infections reported compared to 91,530 the day before. The grim daily record comes alongside data showing soaring hospitalizations from the virus in many states, with the surge most pronounced in the Midwest and Southwest. The rising number of hospitalizations is a clear signal that the increasing number of positive cases is not simply due to an increase in testing but instead represents the rising number of infections leading to more people developing severe enough cases of COVID-19 to require treatment. In positive coronavirus news, AstraZeneca said today that it expects vaccine data to be available within the next eight weeks. “Results from late-stage trials are anticipated later this year, depending on the rate of infection within the communities where the clinical trials are being conducted. Data readouts will be submitted to regulators and published in peer-reviewed scientific journals,” AstraZeneca said.
Jobless claims edged lower last week, but came in above forecasts. The Labor Department reported initial claims of 751,000 for the week ended October 31, compared to economists’ estimates for 741,000 claims. Continuing claims fell by 538,000 to 7.29 million in the week ended October 24, while the number of people claiming support in a federal program that offers extended assistance increased as more Americans exhausted their regular state benefits with nearly 4 million people claiming Pandemic Emergency Unemployment Compensation. “Bottom line, overall the labor market continues to repair itself but the pace at which it is doing so is slowing down,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Qualcomm shares are up more than 13% this morning after the chipmaker posted a fiscal fourth quarter earnings beat. The company reported adjusted earnings per share of $1.45 on revenue of $6.5 billion, compared to Wall Street expectations for earnings of $1.17 per share on revenue of $5.93 billion. “With global smartphone volumes steadily recovering, Qualcomm is well-positioned to benefit from the long-term 5G investment cycle and we anticipate strong earnings through F2022 and beyond,” Canaccord Genuity analysts wrote in a note Wednesday while also raising its price target to $175 from $150. General Motors also delivered an earnings beat, reporting earnings per share of $2.83, versus estimates for $1.38 per share, on revenue of $35.48. Canada Goose reported an earnings beat as well, reporting revenue of $194.8 million. “We have accelerated our best strategic opportunities in today’s environment. Mainland China has already returned to growth and our digital business is accelerating in a meaningful way at the right time,” said Dani Reiss, President & CEO. “This is a strong backdrop as we head into peak Canada Goose season.”
And pot stocks surged higher this morning with Aurora Cannabis shares jumping 26%, Aphria gaining more than 11%, and Tilray rising 25%, each reversing their slumps from the day before on renewed optimism over the living of restrictions on marijuana sales in five states this week. Arizona, Mississippi, Montana, New Jersey, and South Dakota were added this week to the 44 sates that allow marijuana for medical or recreational purposes. But even with the wins demonstrating growing support for cannabis in the U.S., federal legislation for legalized pot nationwide may be off the table for now, particularly if Democrats fail to win control of the Senate. Still, a divided government may bode well for the enactment of the Secure and Fair Enforcement Banking, or SAFE Act, which would enable cannabis banking. “This is likely to become the primary focus for the cannabis industry,” said Jaret Seiberg, senior policy analysts at Cowen & Co, in a note. “The downside is that the SAFE Act would not be needed if there was a sweep as Democrats would have legalized cannabis.”
Stocks We’re Watching
Ayr Strategies Inc (OTC: AYRSF): Ayr Strategies shares gained nearly 11% yesterday following the cannabis company’s announcement that it has agreed to acquire a vertically integrated operation in Arizona, including cultivation and processing facilities and three licensed dispensaries, expanding its footprint to five U.S. states. “Arizona has been a terrific medical market, third in the U.S. in terms of patient penetration at 3.4% and currently generating approximately $800 million in annual revenue. Yesterday, voters decided to make it a recreational use market as well. We are thrilled to be able to leverage our experience, talent, brands and success in Nevada and Massachusetts to bring quality and choice to the Arizona market,” said Jonathan Sandelman, Chairman and Chief Executive Officer of Ayr. “In addition to great operating assets, we are bringing on great talent, adding 110 people to the Ayr team. Now in five states and highly cash-flow generative, we are positioning ourselves as one of the top multi-state operators in the U.S.”