Plus, no winner yet in the presidential election, coronavirus cases rose to another record, and CVS delivered an earnings beat.
Stocks were lower to start Friday with the Dow dropping 136 points, or 0.5%. The S&P 500 slid 0.6%, while the Nasdaq fell 1.2%.
No winner yet. As of early Friday morning, Democrat Joe Biden has taken the lead in Pennsylvania and a slim lead in Georgia, and has urged patience while the count continues. President Donald Trump, on the other hand, has made baseless claims of voter fraud and his campaign has mounted several legal challenges, with two cases thrown out and other rulings in his favor failing to alter the race’s trajectory toward Joe Biden. “These lawsuits don’t have a chance of making a difference to the outcome of the election,” said Wendy Weiser, who leads a democracy program at New York University’s Brennan Center for Justice. “They are manufacturing, both through their lawsuits and other action, a way of riling up supporters to believe this election is being stolen.” More results are expected today, including from Arizona, and Nevada.
October’s employment growth was better than expected, with the Labor Department reporting that nonfarm payrolls increasing by 638,000 and the unemployment rate was at 6.9%. Economists had been expecting a payroll gain of 530,000 and an unemployment rate of 7.7%. “The strength of this report is really amazing in the face of rising coronavirus cases,” said Michael Arone, chief investment strategist at State Street Global Advisors. “You would have expected that to start to show up in the data, particularly in places like leisure and hospitality, where the numbers are incredibly strong.” Jennifer Lee, senior economist at BMO Capital Markets, said, “It’s hard to look at months or weeks past because you know what’s lying ahead and that’s an increase in virus cases. That continues to be the dark cloud looming ahead. But the fact that the jobless rate took such a big decline, that’s extremely encouraging.”
Speaking of increasing virus cases, the U.S. saw another record number of daily coronavirus cases, reporting 121,888. That’s nearly 20,000 more cases than the previous single-day record set on Wednesday. Thirteen states—including Colorado, Idaho, Indiana, Iowa, Maine, Minnesota, Nebraska, and Utah—saw a record number of cases on Thursday, while reported cases are rising across the majority of the U.S. The World Health Organization said today that it will review biosecurity measures across the globe after Danish health authorities found a mutated form of the coronavirus present int the country’s mink farms, raising questions about the effectiveness of future COVID-19 vaccines. Danish Prime Minister Mette Frederiksen said earlier this week that the government would cull all 15 million minks in Danish farms to try to reduce the risk of the animals re-transmitting the new strain of the coronavirus to humans. Frederiksen called the situation “very, very serious,” warning the mutated virus could have “devastating consequences” worldwide.
In earnings news, CVS shares are up nearly 9% this morning after the pharmacy chain reported better-than-expected third quarter revenue and raised its guidance for the year. CVS reported earnings of $1.66 per share on revenue of $67.06 billion, compared to estimates for earnings per share of $1.33 on revenue of $66.66 billion. “If we told you a year ago that to date 6 million people would have gone to their local CVS pharmacy for a diagnostic test related o some virus, I would probably get an eyeball roll,” said CEO Larry Merlo on the earnings call. “The reality is that’s happened, and it really speaks to the strategy that we’ve talked about in terms of meeting people where they are.” Also on the earnings call, CVS announced Merlo will be stepping down from his role as CEO and will be replaced by Karen Lynch on February 1. Lynch is currently executive vice president of CVS Health and president of Aetna, the health insurer the company acquired in 2018. And Roku shares are up more than 11% after it reported third quarter revenue rose 73% to $415.7 million. Roku also said its streaming platform revenue rose 78% to $319 million, while player revenue rose 62% to $132 million. “We are pleased with the resilience of our business and cautiously optimistic about the holiday season,” Roku said in a letter to shareholders.
And Apple has began taking preorders for its final two new iPhone 12 models, the iPhone 12 Pro Max and the iPhone 12 mini. It is also accepting orders for its HomePod Mini smart speaker. The iPhone 12 Pro Max starts at $1,099 and has the largest display ever on an iPhone. The Pro Max also includes some extra features over the $999 iPhone 12 Pro, including better low-light camera performance. “In past phone cycles, we have felt that AAPL makes a strong case why tech-savvy consumers should gravitate towards the highest end solution (iPhone X in 2017, iPhone XS in 2018, iPhone 11 Pro in 2019), but we do not believe such a case was made as strongly in 2020,” Deutsche Bank analysts said in a note in October. While the iPhone 12 Mini offers many of the same features as the regular iPhone 12, it comes in a smaller size that may appeal to people who don’t want a large phone and is the cheapest of the four new models at $699.
Stocks We’re Watching
LightPath Technologies (NASDAQ: LPTH): LightPath Technologies reported fiscal first quarter 2021 results yesterday, posting revenue growth of 26% year-over-year to $9.5 million. “Strong performance in the first quarter of fiscal 2021 reflects our continued trajectory of growth. Our growth and strong performance can be seen both sequentially, compared to the fourth quarter of fiscal 2020, as well as compared to the first quarter of last fiscal year, in which we suffered from significant operational challenges that impacted results in that quarter,” said Sam Rubin, President and CEO of LightPath, in a statement. “Despite the coronavirus (“COVID-19”) pandemic, which has disrupted supply chains and caused economic upheaval beyond the toll on global health conditions, we have been able to deliver strong results and have positioned the Company for more profitable and longer-term growth.”