Friday, August 7, 2020
A positive week. U.S. stocks ended Friday’s choppy session mixed, but all three major indexes posted solid gains for the week. On Friday, the Dow Jones Industrial Average rose 0.2%, to 27,434, while the S&P 500 index edged up 2 points to about 3,351, gaining less than 0.1%. The Nasdaq Composite Index finished off 0.9%, decisively ending a streak of seven gains in a row. That streak had taken the tech-heavy index to a series of record closes and a finish above the psychologically significant mark of 11,000 for the first time on Thursday. For the week, the Dow gained 3.37%, while the S&P climbed 1.9% and the Nasdaq rose 1.5%. Friday’s results came as Wall Street watched Congress get down to brass tacks on another coronavirus aid package before the summer recess; that recess appeared in doubt as reports suggested that talks may spill over into the weekend.
A Covid Vaccine Could Be Ready Sooner Than You Think
The recent flare-ups in Covid-19 are disheartening. One strange benefit of a higher infection rate, however, is that it could speed the conclusion of vaccine tests now under way.
Promising Covid vaccine candidates are in pivotal Phase 3 trials from Moderna with BioNTech, and AstraZeneca with Oxford University. Just behind them are Johnson & Johnson and a team of Sanofi and GlaxoSmithKline.
As Morgan Stanley analysts Matthew Harrison and David Risinger explained in a Thursday note, the Phase 3 vaccine trials compare the number of infections between volunteers who got the vaccine and those who got a placebo shot. The more rampant Covid is in test locations, the sooner it will be apparent whether the vaccine is offering protection.
Facebook Stock Rallied Today. Look to Its TikTok Rival, Reels, for the Reason.
Investors on Thursday sent Facebook stock soaring, the day after the launch of its Reels short-video products for Instagram.
While the market may have not quite known what to make of Instagram’s Reels upon Wednesday’s release, investors seem to now understand the TikTok rival’s potential. One of Facebook’s strategies to build out Instagram’s Reels product has been to attract TikTok’s content creators and convince them to move their short-videos over ahead of the product’s launch.
Uber Earnings Reveal a Larger Than Expected Loss
Uber Technologies posted weaker-than-expected results for the June quarter, as it still balances a dramatic falloff in its ride-sharing business with a spike in its food delivery arm.
Uber reported adjusted revenues of $1.9 billion, down 33% year over year and falling short of the Wall Street analyst consensus of $2.2 billion. Mobility revenue fell 66%, and delivery revenue surged 162%. The company lost $1.02 a share in the quarter, wider than the Street consensus at 86 cents.
EV Truck Maker Lordstown Motors Is Getting Bought
Lordstown Motors—the company building a new electric truck at a former General Motors plant—is being acquired by a special purpose acquisition company, or SPAC.
DiamondPeak is buying the EV startup. That’s the company that investors can trade which will morph into Lordstown Motor eventually. When the deal is done, DiamondPeak will change its stock ticker to RIDE.
Nikola Stock Sank Because of What Management Said — and Didn’t Say — On Its First Earnings Call
Nikola stock dropped immediately after the company reported a quarterly loss. Earnings, however, shouldn’t really matter. Nikola doesn’t generate any sales and the recent past for the company looks nothing like its immediate future. The company’s earnings conference call was what investors needed to pay attention to.
Nikola stock, however, didn’t recover in the immediate aftermath of the conference call either—mainly because of what company management didn’t say.
Winners and Losers Are Emerging in Airline Stocks
Shares of Spirit Airlines surged after the carrier said it could furlough up to 30% of its staff this fall.
The developments seem to fit a pattern: With demand looking weaker, investors want to see airlines cut costs dramatically, and carriers that do so may be rewarded with higher share prices.
Rocket Mortgage IPO Shapes Up to Be Big
Rocket Companies, the parent of Rocket Mortgage and Quicken Loans, will raise $1.8 billion in one of the biggest IPOs of the year so far. But that’s far less than the mortgage originator had initially hoped for.
Rocket, which priced its offering of 100 million Class A shares at $18 Wednesday evening, is selling fewer shares at a lower valuation than initially hoped. The company initially expected to price 150 million shares within a range of $20-$22 per share, which would have made the deal the second-largest IPO this year, behind Bill Ackman’s Pershing Square Tontine Holdings, a special purpose acquisition company. The pricing still places the deal within the top 10 biggest IPOs this year so far, though.
Plug Power’s Earnings Were Solid, But the Real Good News May Lie Ahead
Fuel cell maker Plug Power reported second-quarter earnings that were better than expected this week. And while beating Wall Street estimates is a good thing, but that isn’t why the stock jumped.
Sure, investors are excited about the company’s legacy fuel-cell business, a technology that powers machines such as industrial fork lifts. But they are even more excited about the future. Plug management is talking about applying fuel-cell technology to heavy-duty trucks—along the lines of the newly public Nikola.
GM’s Cadillac Is Coming for Tesla. The Lyriq Is on the Way.
The 111-year-old General Motors is serious about a future with all electric vehicles, and about making sure Tesla, the husky teenager on the automotive block, doesn’t shove it into the shadows. GM launched its electric Lyric Cadillac SUV Thursday evening.
It feels a little odd to say General Motors—a firm selling millions of cars generating hundreds of billions in sales—is coming for Tesla —a company selling hundreds of thousands of cars generating tens of billions in sales. But that’s automotive reality these days.
Share This Story, Choose Your Platform!
About the Author: Tara Bruce
Related Posts
