Plus, the U.S. surpassed 15 million coronavirus cases, Lowe’s said it expects sales to grow by 22% next year, and DoorDash sold 33 million shares at $102 a piece in its IPO.
Stocks were higher to start Wednesday with the Dow adding 128 points, or 0.4%. The S&P 500 rose 0.2%, while the Nasdaq traded around the flatline.
Stimulus, again. Treasury Secretary Steven Mnuchin made a surprise re-entry into the stimulus fray, delivering a $916 billion proposal that opens up a new path to a year-end deal despite objections from Democrats over elements of his plan. Mnuchin’s $916 billion plan delivered to House Speaker Nancy Pelosi includes $600 stimulus payments to individuals, $160 billion in aid for state and local authorities, and “robust” protections for employers from COVID-19 related lawsuits. Missing from the plan—which is essentially a joint proposal from the White House, Senate Majority Leader Mitch McConnell, and House Republican leader Kevin McCarthy—is the bipartisan proposal for $300 a week in supplemental unemployment aid. While House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said in a joint statement that the plan from Mnuchin marked “progress” as it brings McConnell closer to the bipartisan $908 billion framework unveiled last week, the Democratic leaders said the omission of supplementary jobless benefits was “unacceptable.”
The U.S. surpassed 15 million coronavirus infections, adding more than 1 million cases in just four days. With cases on the rise across the country, health experts warn that the full effect of a Thanksgiving-related bump in cases and hospitalizations won’t be realized for another 7-10 days. “That should be sometime probably next week or a week and a half,” said White House coronavirus advisor Dr. Anthony Fauci, adding that the U.S. could expect “the full brunt” from the virus coming off the Thanksgiving holiday season, and could see a “surge upon surge” of new cases heading into Christmas and New Years. “And then we’re going to enter into the Christmas season, again with more traveling and with more congregating at family and social gatherings. So we’re in for a very challenging period.”
In vaccine news, U.K. regulators warned that people with a history of “significant” allergic reactions should not receive the coronavirus vaccine developed by Pfizer and BioNTech, which the country first began dosing yesterday. The country’s Medicines and Healthcare products Regulatory Agency updated its guidance on who should receive the vaccine, cautioning that “any person with a history of a significant allergic reaction to a vaccine, medicine or food (such as previous history of anaphylactoid reaction or those who have been advised to carry an adrenaline autoinjector) should not receive the Pfizer BioNTech vaccine,” following two members of Britain’s National Health Service who had received the vaccine experienced allergic reactions to the shot.
Lowe’s shares are up more than 6% this morning after it said it expects sales to grow by about 22% next year as its turnaround efforts gain momentum and it continues to see a boost from the popularity of home improvement projects amid the coronavirus pandemic. The retailer said it expects to earn between $7.53 to $7.63 per share next year amid a 23% rise in same-store sales. “Our commitment to retail fundamentals has been essential to our 2020 financial success,” said Lowe’s CEO Marvin Ellison. “Our supply chain, in-store and digital systems would have collapsed under the weight of the unprecedented customer demand created by the pandemic without this focus.”
And DoorDash sold 33 million shares in its IPO at $102 a piece, pricing above its range. the offering on Tuesday values the company at $32.4 billion, based on common stock outstanding and $38.7 billion on a fully-diluted basis. The company previously said it expected to sell shares at between $90 and $95. DoorDash is the first IPO in a wave of late-year public debuts, including the expected debut of Airbnb later this week, followed by e-retailer Wish next week, and fintech company Affirm and kids’ game maker Roblox later this month. DoorDash controls about 50% of the U.S. food delivery market, well ahead of Uber Eats and GrubHub. The biggest overhand of the the company may be uncertainty about what the business looks like in a post-COVID world, especially with a widespread vaccine rollout expected by mid-2021. DoorDash warned in its prospectus, “The circumstances that have accelerated the growth of our business stemming from the effects of the COVID-19 pandemic may not continue in the future, and we expect the growth rates in revenue, Total Orders, and Marketplace GOV to decline in future periods.”
Stocks We’re Watching
Stitch Fix Inc (NASDAQ: SFIX): Stitch Fix shares rocketed as much as 53% yesterday following the clothing subscription service delivering an earnings beat. For its fiscal first quarter, the company reported earnings of $0.09 per share on revenue of $490.4 million, topping estimates for a loss of $0.20 per share on revenue of $481.2 million. “In Q1, we delivered $490 million in net revenue, reflecting 10% year-over-year growth, and grew our active client count to nearly 3.8 million, reflecting 10% year-over-year growth,” said Stitch Fix founder and CEO Katrina Lake. “This quarter we are proud to have achieved several multi-year highs, including our highest sequential client addition on record and the highest level of successful first Fixes in the past five years. Our powerful personalization engine is evolving, and innovations in our Fix and direct buy offerings will expand our addressable market, deepen client engagement and grow wallet share over time. We’re excited about the momentum in our business, confident in the future ahead, and we expect to deliver between 20% and 25% growth for the full year.”