January 23, 2021

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Dow futures fall, but index heads toward best month in more than three decades

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Stock futures were mostly lower Monday morning as investors gave back some of last week’s gains, which sent the S&P 500 and Nasdaq to fresh record highs and the Dow above 30,000 for the first time ever.

The three major indices are poised to cap off November with major monthly gains. Based on Friday’s closing prices, the Dow was set to post a monthly gain of 12.9% for its best month since early 1987. The S&P 500 tracked toward a rise of 11.3%, and the Nasdaq headed for an 11.9% advance in November, which would each be the best gains since April this year.

Investors last week rode a wave of upbeat news about impending COVID-19 inoculations, with AstraZeneca (AZN) becoming the latest drug-maker to announce strong efficacy data about its vaccine candidate last week. Moderna (MRNA) said Monday it will file for emergency use authorization with the U.S. Food and Drug Administration for its vaccine candidate, joining Pfizer (PFE), which has already applied for an EUA.

Stocks set to benefit most from the lasting economic reopening that a vaccine might confer ticked lower after soaring last week, as traders extended November’s rotation into cyclical stocks and away from some of the high-flying tech names that had led earlier on during the pandemic. Shares of Carnival Corporation (CCL), Norwegian Cruise Line Holdings (NCLH), American Airlines (AAL), and United Air Lines (UAL) jumped by double digit percentages last week alone, far outpacing the broader market’s 2.3% advance over that time frame. Boeing (BA), American Express (AXP) and Chevron (CVX) led last week’s gains in the Dow.

The steady drumbeat of vaccine updates compounded with more developments around President-elect Joe Biden’s cabinet selections, with key nominees having been viewed as market-positive. And since election results were first called by media outlets earlier this month, many investors cheered the likelihood of a divided government, though control of the Senate will not be ultimately known until January.

“A trifecta of recent positive catalysts should continue to buoy markets. Equities have welcomed a decisive Biden victory and a divided Congress, and news flow on vaccine efficacy has been much better than expected,” Barclays equity strategists led by Maneesh Deshpande said in a note last week. “Importantly, corporate earnings continue to surprise to the upside and we expect this trend to continue. A reversal of the significant mutual fund YTD outflows should provide additional support.”

Still, the COVID-19 situation in the U.S. grew more dire, and the winter months are expected to be especially grim as Americans travel for the holidays and outdoor activities become tougher to come by. COVID-19 cases in the U.S. have so far topped 4 million in November alone, more than doubling the one-month record of 1.9 million from just a month earlier. In total, more than 13.2 million Americans have been infected, and 266,000 have died, according to Johns Hopkins data.

8:34 a.m. ET: Delivery company DoorDash eyes IPO that could raise as much as $2.8 billion

DoorDash, the nation’s largest delivery company, is set to raise up to $2.8 billion in its initial public offering, becoming one of the latest companies to join the torrent of public debuts this year.

According to a securities filing Monday, DoorDash will sell 33 million shares for between $75 to $85 apiece, to give the company a market capitalization of more than $30 billion on the high end of the range.

In the nine months ending September 30 this year, DoorDash’s revenue more than doubled over last year to $1.9 billion, from the $885 million during the same period last year. Its net losses narrowed to $149 million over that time frame, versus $667 million over the same months in 2019.

8:23 a.m. ET: General Motors announces smaller deal with electric car-maker Nikola

General Motors (GM) said in a statement Monday that it had revised the terms of its deal with newly public electric-car maker Nikola (NKLA), which was first announced in early September.

Under terms of the new agreement, GM will supply its Hydrotec fuel-cell system for Nikola’s commercial semi-trucks. However, the company will no longer take an equity stake in Nikola, nor will it help manufacture Nikola’s Badger electric pickup truck, as had been planned earlier.

Shares of Nikola sank more than 7% in early trading following the announcement, while shares of GM were down less than 1%.

7:05 a.m. ET Monday: Stock futures point to a lower open

Here were the main moves in markets, as of 7:05 a.m. ET Monday morning:

  • S&P 500 futures (ES=F): 3,620.75, down 15.75 point or 0.43%

  • Dow futures (YM=F): 29,679.00, down 195 points or 0.65%

  • Nasdaq futures (NQ=F): 12,256.5, down 1 points or 0.01%

  • Crude (CL=F): -$0.64 (-1.41%) to $44.89 a barrel

  • Gold (GC=F): -$13.80 (-0.77%) to $1,774.30 per ounce

  • 10-year Treasury (^TNX): +1.3 bps to yield 0.855%

NEW YORK, NEW YORK – NOVEMBER 24: People walk past the New York Stock Exchange (NYSE) on November 24, 2020 in New York City. As investor’s fear of an election crisis eases, the DowJones Industrial Average passed the 30,000 milestone for the first time on Tuesday morning. (Photo by Spencer Platt/Getty Images)

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2020-11-30 08:41:12

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