Plus, Moderna’s COVID-19 vaccine was approved for emergency use by the FDA, Tesla shares are down on its first day in the S&P 500, and Nike shares are up after an earnings beat.
Stocks were lower to start Monday with the Dow dropping 204 points, or 0.7%. The S&P 500 and Nasdaq both slid 1.4%.
They finally did it. Congress reached a deal on Sunday for a $900 billion coronavirus relief package. The deal includes $600 checks to Americans plus $600 per child, $300 per week in federal unemployment insurance through mid-March, $284 billion for the Paycheck Protection Program, $8 billion for COVID-19 vaccine distribution, and extends the federal eviction moratorium through January 31, 2021. Lawmakers plan to pass the relief bill, as well as a funding bill to fund the government through September 2021, on Monday. House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said the package “delivers urgently needed funds to save the lives and livelihoods of the American people as the virus accelerates,” but said the plan was inadequate and that they would push for more relief spending after President-elect Joe Biden takes office on January 20.
Moderna’s COVID-19 is beginning to be distributed across the U.S. today after the FDA authorized the vaccine for emergency use late Friday. Several countries announced plans to shut their borders to Great Britain over the weekend as news of a highly contagious new variant of the coronavirus led the British government to impose harsh lockdowns in London and other areas in southern England where infections of the COVID mutation are heavily concentrated. The U.K. warned that the new coronavirus variant is up to 70% more transmissible than the original strain of the disease, though there’s no evidence to suggest it causes a higher death rate.
Tesla shares are down nearly 5% this morning on its first day of trading on the S&P 500. The electric vehicle maker is now one of the heaviest-weighted stocks in the index, representing 1.6% of the benchmark. Institutional buying of the stock surged on Friday as index-tracing managers rushed to add Tesla to their funds, with nearly $60 billion worth of stock changing hands at $695 per share. “There is strong precedence for positive returns for stocks prior to S&P 500 inclusion and post announcement,” said Sanford C. Bernstein analyst Toni Sacconaghi, “but very limited precedent for near term out performance post inclusion.”
Nike shares jumped more than 5% to a fresh intraday high to start Monday after the sneaker maker delivered an earnings beat. For its second quarter, Nike reported earnings per share of $0.78 on revenue of $11.24 billion, compared to estimates for earnings of $0.62 per share on revenue of $10.56 billion. Nike said its digital sales were up 84% in the quarter as consumers visited its website during the pandemic to buy athletic apparel and footwear to keep up their fitness routines and personal health. “Nike’s across-the-board second-quarter beat further demonstrates both consistency in execution and the competitive advantages of its global scale, customer loyalty, unique product, and technological innovation,” said Barclays analyst Adrienne Yih, who reiterated her Overweight rating on the stock and boosted her price target from $150 to $174 – 20% higher than the price as of this writing.
And your awkward family Christmas video call should go off without a hitch. Zoom Video Communications said it is confident it can meet increased demand for Christmas Day, which may be one of its busiest days ever for call volume as the coronavirus pandemic continues to keep families apart. Zoom said that it will remove its 40-minute session limit over the holidays for users who don’t pay for the service, helping it to better compete with other video conferencing platforms including Skype, Google Meets, Apple’s FaceTime, and Facebook’s Messenger and WhatsApp. “We operate our own global (co-located0 data centers around the globe, providing significant control and flexibility when it comes to routing both audio and video traffic,” a Zoom spokesperson said. “In addition, we work with public cloud providers to help with increased demand.”
Stocks We’re Watching
Catalent Inc (NYSE: CTLT): Catalent said today that Novan Inc has entered into a Master Services Agreement with the company for support of chemistry, manufacturing and control (CMC) activities and development of an intranasal formulation of berdazimer sodium for use in Novan’s coronavirus program. “This is a tremendous opportunity for Catalent and Novan,” said Jonathan Arnold, President of Oral & Specialty Delivery, Catalent. “We are proud to leverage Catalent’s broad knowledge and expertise in formulation and inhalation technologies to help address the pressing needs associated with the COVID-19 pandemic.”