Plus, President-elect Joe Biden said he would ask all Americans to wear masks for the first 100 days of his presidency in an effort to slow surging coronavirus cases, the Cheesecake Factory settled with the SEC, and Petco filed to go public.
Stocks were higher to start Friday with the Dow adding 115 points, or 0.4%. The S&P 500 rose 0.5%, while the Nasdaq traded 0.4% higher.
November nonfarm payrolls rose by just 245,000, well below economists expected gain of 440,000. The jobless rate decreased to 6.7% from 6.9% in October. While the unemployment rate met expectations, it fell along with a drop in the labor force participation rate to 61.5%. A more encompassing measure of joblessness edged lower to 12%, while the number of Americans outside of the work force remained just above 100 million. In total, the U.S. economy has brought back 12.3 million of the 22 million jobs lost in the first two months of the coronavirus crisis, with 10.7 million Americans still considered unemployed. “Overall, it is a disappointing report,” economists at Jefferies said in a note. “With COVID cases surging again and policies being put in place to try and slow the spread, hiring has slowed down. Also, worker availability is a significant limiting factor as well, with many unable to go to work due to COVID concerns or family care obligations.”
With the job market rebound slowing markedly in November, the prospects for lawmakers to approve another stimulus package by year-end are growing. House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell talked stimulus for the first time since the election on Thursday, with the congressional leaders discussing their “shared commitment to completing an omnibus [spending bill] and COVID relief as soon as possible,” according to Pelosi spokesman Drew Hammill. Republicans are warming to the idea of using the bipartisan $908 billion proposal as a basis for a deal, even as McConnell still has yet to publicly throw his support behind the plan.
The U.S. reported another record for new daily coronavirus cases, hospitalizations, and deaths, recording 217,664 new cases, 100,667 hospitalizations, and 2,879 deaths. As the coronavirus outbreak in the U.S. continues to worsen, President-elect Joe Biden said he would ask all Americans to wear a mask to prevent the spread of the deadly virus for the first 100 days of his administration, and would issue a “standing order” requiring face coverings in federal buildings and interstate transportation. Biden also said that he has asked Dr. Anthony Fauci to stay on as the government’s top infectious disease expert in an expanded role, advising the president directly. “I asked him to stay on the exact same role he’s had for the past several presidents, and I asked him to be a chief medical adviser for me as well, and be part of the COVID team,” Biden said.
The Cheesecake Factory settled with the SEC for misleading investors with its COVID-19 disclosures. The case marks the first time the regulator has charged a company for misleading investors about the financial impacts of the pandemic. While the Cheesecake Factory didn’t admit to the SEC’s findings, the restaurant chain has agreed to pay a $125,000 fine and to not conduct further violations of the reporting provisions of securities laws. According to the SEC, the Cheesecake Factory’s regularity filings from March 23 and April 3 were “materially false and misleading.” While the company said its restaurants were “operating sustainably” during the early days of the pandemic even as states across the nation implemented lockdown measures, internal documents from the time showed the company was losing around $6 million in cash per week with only 16 weeks of cash remaining. The SEC also said Cheesecake Factory failed to disclose that it had already told its landlords that it would not pay rent in April in its March 23 filing.
And Petco is cashing in on your pandemic puppy. Petco Health and Wellness filed an S-1 for an initial public offering as consumer spending on pets rises during the coronavirus pandemic. The retailer hasn’t yet shared the number of shares that will be available or the pricing for its IPO, but the company will be listed on the Nasdaq with the ticker “WOOF.” Petco said that in the ten months ended October 31, its net sales rose 9% year-over-year to $3.58 billion, while same-store sales have jumped 9.6% so far this year. The last time Petco was publicly traded was in 2006. While it nearly went public five years ago, it was instead acquired by private equity firms CVC Capital Partners and Canadian Pension Plan Investment Board for $4.6 billion.
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Zscaler Inc (NASDAQ: ZS): Zscaler shares surged nearly 30% yesterday following the security software vendor for the cloud’s fiscal first quarter results, posting 52% year-over-year revenue growth to $142.6 million. CEO Jay Chaudhry said on the company’s earnings call, “COVID was a catalyst in changing the mindset of shaking off inertia, resulting in a reduced need for educating customers about the value of the Zscaler architecture over legacy approaches.”