Plus, an FDA panel could vote to recommend approval of Pfizer and BioNTech’s coronavirus vaccine today, Facebook was hit with antitrust lawsuits from the FTC and 48 states and territories, and Airbnb priced its IPO above range.
Stocks were mixed to start Thursday with the Dow dropping 42 points, or 0.1%. The S&P 500 traded just above the flatline, while the Nasdaq rose 0.5%.
Initial jobless claims totaled 853,000 last week, rising from the upwardly revised 716,000 total from the week prior and far higher than the 730,000 expected by economists. Continuing claims rose by 230,000 to 5.76 million, marking the first time the figure has gone up since late August. “Given the recent behavior of initial claims, we will likely see further increases in continuing claims going forward,” wrote Thomas Simons, money market economist at Jefferies. “Evidence has been building indicating that claims hit an inflection point in early November due to rising COVID case numbers and forced the imposition of social distancing policies that really hurt the service sector of the economy.” The number of Americans claiming Pandemic Emergency Unemployment Compensation, a federal program that extends benefits to those who have exhausted state benefits, fell slightly to 4.53 million for the week ended November 21 as the program nears an end absent any action from Congress before the end of the year.
As jobless claims rise, Treasury Secretary Steven Mnuchin said progress has been made in negotiating a COVID-19 relief deal following talks with both Republican and Democratic senators Wednesday night. “We had a very productive call yesterday with a lot of people, so I think we’re making a lot of progress,” Mnuchin said this morning. “There’s more discussions going on today.” Still, Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi have yet to give any sign that they’re ready to directly engage in negotiations on a new stimulus package, though deteriorating economic data may put pressure on them to engage. McConnell is now on board with a $916 billion proposal released on Tuesday by Mnuchin, which excludes supplemental unemployment benefits in favor of $600 stimulus checks for individuals, while Pelosi sees the rival $908 billion bipartisan plan released last week—which does not include stimulus checks but does include extended unemployment benefits—as the best path forward to get to a deal to aid the struggling U.S. economy before the end of 2020.
The U.S. recorded 3,124 new COVID-19 deaths on Wednesday, the deadliest single-day tally of the pandemic thus far, and reported more than 221,000 new coronavirus infections. As the cases and death counts rise, an influential FDA panel is scheduled to vote today on whether to recommend the approval of Pfizer and BioNTech’s coronavirus vaccine for emergency use. Following the panel vote, the FDA could make a decision on approving the vaccine for emergency use as early as Friday, and if approved, the federal government is expected to ship 2.9 million doses of the Pfizer-BioNTech vaccine to jurisdictions across the nation within 24 hours of approval.
Facebook was hit with two separate antitrust lawsuits on Wednesday from the Federal Trade Commission and a coalition of attorneys general from 48 states and territories. Both lawsuits are seeking remedies for the alleged anti-competitive conduct that could result in Facebook being required to divest Instagram and WhatsApp. “Since toppling early rival Myspace and achieving monopoly power, Facebook has turned to playing defense through anticompetitive means,” the FTC states in its lawsuit. “After identifying two significant competitive threats to its dominant position — Instagram and WhatsApp — Facebook moved to squelch those threats by buying the companies, reflecting CEO Mark Zuckerberg’s view, expressed in a 2008 email, that ‘it is better to buy than compete.’” Facebook responded to the lawsuits by calling the claims “revisionist history” of the two acquisitions that were approved by the government several years ago. “The most important fact in this case, which the Commission does not mention in its 53-page complaint, is that it cleared these acquisitions years ago,” said Facebook’s chief counsel Jennifer Newstead. “The government now wants a do-over, sending a chilling warning to American business that no sale is ever final.”
Airbnb sold shares in its IPO at $68, pricing above range. The offering values the company at $47 billion on a fully diluted basis. The home-rental company priced its IPO above a marketed range of between $56 to $60 to raise about $3.5 billion. Between Airbnb and DoorDash’s IPO yesterday, IPO volume is at an all-time high for December, surpassing the $8.3 billion mark set for the month in both 2001 and 2003, with Affirm, ContextLogic, Roblox, and Wish still yet to debut this month. The listings will add to what has already a record year for IPOs, with more than $166 billion raised on U.S. exchanges, including Airbnb and DoorDash. Airbnb’s offering is being led by Morgan Stanley and Goldman Sachs, and shares will trade on the Nasdaq under the symbol ABNB.
Stocks We’re Watching
Conversion Labs Inc (NASDAQ: CVLB): Conversion Labs shares gained as much as 13% yesterday following its announcement that it had received approval to uplift to the Nasdaq Capital Market beginning today, December 10, under the symbol CVLB. “As the leading securities exchange for emerging growth stocks, we anticipate a Nasdaq listing will elevate our corporate profile and increase awareness of our growth story across the financial community,” said Conversion Labs CEO, Justin Schreiber. “We expect this to support greater liquidity, broaden our shareholder base of retail and institutional investors, and attract analyst coverage.”