Plus, Netflix shares are up after reporting surpassing 200 million subscribers for the first time, Morgan Stanley delivered an earnings beat, and Procter & Gamble boosted its fiscal 2021 outlook.
Stocks were higher to start Wednesday with the Dow adding 200 points, or 0.6%. The S&P 500 rose 1% to a new intraday all-time high, and the Nasdaq jumped 1.6% to a new record.
Stocks are higher as President-elect Joe Biden and Vice President-elect Kamala Harris prepare to take their oaths of office, and as President Donald Trump’s term comes to an end. Amid a locked-down Washington D.C. and a socially distanced ceremony, Biden is expected to plead for national unity in his inaugural address as political, economic, and health crises grip the nation. In his first hours in the Oval Office, Biden plans to sign more than a dozen executive orders to address challenges including reversing Trump’s environmental actions and his Muslim travel ban, halting the construction of the border wall between the U.S. and Mexico, rejoining the Paris Climate Accord, and extending the eviction and foreclosure moratoriums.
Among Biden’s executive orders to be signed immediately following his inauguration will be an order that will launch a “100 Days Masking Challenge” to help stem the spread of the coronavirus in the U.S., as well as orders for the nation to rejoin the World Health Organization and to bolster key COVID-19 personnel. Biden has tapped Dr. Anthony Fauci to lead a U.S. delegation at the WHO’s annual meetings this week, reversing outgoing President Trump’s plan to withdraw from the international aid group. “Once the United States resumes its engagement with the WHO, the Biden-Harris Administration will work with the WHO and our partners to strengthen and reform the organization, support the COVID-19 health and humanitarian response, and advance global health and health security,” a statement said.
Netflix shares have soared as much as 15% this morning to briefly trade at an all-time high following the streaming giant’s earnings report late Tuesday. The company said in its fourth quarter earnings report that it is “very close” to being free cash flow positive and is considering buybacks for the first time. While Netflix missed on earnings per share, it delivered a revenue beat reporting revenue of $6.64 billion versus $6.26 billion expected by analysts, and beat expectations for net subscriber additions, posting 8.5 million new subscribers compared to 6.47 million expected, to a total of more than 200 million subscribers for the first time ever. Following the earnings report, Wells Fargo analysts said in a note, “We’ve gone from [an] historical bear on NFLX to a card-carrying bull,” and upgraded their price target on the stock from $510 to $700 per share.
Morgan Stanley also beat expectations, posting adjusted profit of $1.92 per share on revenue of $13.64 billion, compared to expectations of profit of $1.27 per share on revenue of $11.54 billion. “The firm produced a very strong quarter and record full-year results, with excellent performance across all three businesses and geographies,” CEO James Gorman said in the release. “Our unique business model continues to serve us well as we further execute on our long-term strategy with the acquisitions of E*TRADE and Eaton Vance.” Morgan Stanley’s equities trading business saw $2.49 billion in revenue, $350 million more than estimates, while its wealth management division produced $5.68 billion in revenue, beating estimates by nearly half a billion dollars.
And Procter & Gamble shares are down more than 1% this morning even after it boosted its outlook for the second consecutive quarter after its revenue rose 8% last quarter as the coronavirus pandemic continued to fuel demand for its cleaning products. The Tide owner said it now expects sales growth of 5% to 6% in fiscal 2021, and is also forecasting a gain for adjusted earnings of between 8% and 10%. For its fiscal second quarter, Procter & Gamble reported earnings per share of $1.64 on revenue of $19.75 billion, versus Wall Street expectations for earnings of $1.51 per share on revenue of $19.27 billion. “We delivered another strong quarter of results across all key measures – top line, bottom line and cash,” said P&G Chairman, President and CEO, David Taylor, in a statement. “We remain focused on executing our strategies of superiority, productivity, constructive disruption and improving P&G’s organization and culture. These strategies enabled us to build strong business momentum before the COVID crisis, accelerated our progress in calendar year 2020 and remain the right strategies to deliver balanced growth and value creation over the long term.”
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Cocrystal Pharma Inc (NASDAQ: COCP): Cocrystal shares gained as much as 62% yesterday after the biotech announced that it has completed all research obligations under the Merck exclusive worldwide license and collaboration agreement, and that Merck is now solely responsible for further development of the influence A/B antiviral compounds that were discovered using Cocrystal’s unique structure-based technologies and Nobel Prize-winning expertise. “Through a highly productive relationship with Merck, teams from both companies worked collaboratively to rapidly advance the discovery and initial development of promising proprietary influenza A/B antiviral compounds,” said Gary Wilcox, Ph.D., Chairman and Chief Executive Officer of Cocrystal. “Under the agreement announced in January 2019, Merck had an option for Cocrystal to perform up to 12 months of additional work if the initial two years of collaboration did not progress as expected. We are pleased our collaboration achieved its goals within the timeline and that there is no need for Merck to exercise the option. As this program advances, Merck is now responsible for funding continued development of the compounds.”