The Bear Den by Shortside Jonny
Monday, November 16, 2020 – DIA 299.98 +1.64%, QQQ 293.20 +.78%, SPY 362.57 +1.25%
No economic data. Moderna (MRNA) 97.95 +9.58% released phase 3 COVID-19 vaccine data showing 94.5% efficacy. The drug was reported to have storage attributes which are beneficial for large scale deployment, stable in normal refrigeration for up to 30 days, and stable for 6 months when frozen. Along with Pfizer’s vaccine, pending reviews, the US government could well have enough vaccine to cover the US population by next year. Rotation continued as the market advanced on the news. Stocks that had suffered under the lockdown and depressed economic activity did well. The energy sector which may have found a multiyear cycle low did well Chevron (CVX) 88.96 +7.14%, Schlumberger (SLB) 20.04 +11.33% advanced. Retailers were also very strong Gap (GPS) 24.16 +9.47, and Nordstrom’s (JWN) 19.19 +10.86%. On the downside, Zoom (ZM) 399.15 -1.1% (work from home favorite) has corrected 32% from its all-time high of 588.84 on October 19.
Tuesday, November 17, 2020 – DIA 298.31 -.56%, QQQ 292.27 -.32%, SPY 360.62 -.05%
Retail sales data disappointed. For October .1% vs. .5% expected. On a month over month basis .3% vs. .5% expected. But the big retail news of the day was the announcement by Amazon (AMZN) 3135.66 +.15% that it will enter the online pharmacy business. Chain pharmacy companies Walgreen’s Boots Alliance (WBA) 39.855 -9.63%, CVS Caremark (CVS) 67.14 -8.62% were hit hard on the news. In other major news Boeing (BA) 210.05 +3.78% announced it expects China to purchase 8600 planes valued at $1.4 Trillion over the next 20 years. In a sign of a potentially more restrictive regulatory environment the utility sector came under pressure, Consolidated Edison (ED) 79.25 -4.18%, American Electric Power (AEP) 86.73 -2.78%, Excel (XEL) 72.63 -2.78%, and Southern Company (SO) 62.36 -2.74.
Wednesday, November 18, 2020 – DIA 294.80 -1.18%, QQQ 290.11 -.74%, SPY 356.25 -1.21%
Building Permits MoM (leading indicator) came in light 1.545M vs. 1.56M Expected. Housing Starts MoM (coincident indicator) 1.53M vs. 1.46M. COVID-19 dominated the news of the day, as Pfizer (PFE) 36.32 and its vaccine partner BioNTech (BNTX) 90.44 +4.04 released additional information pointing to a 95% efficacy rate from data derived from the phase 3 study. Meanwhile, until the vaccines arrive, the country is seeing cases multiply dramatically with increased infection rates and hospitalizations being reported. Reinforcing the spike and trend higher, news that NYC schools would close wore on the market, and by the end of the day, markets were lower. Lockdown beneficiary ZOOM (ZM) 415.04 +3.34% was up and a proxy for lockdown winners. Boeing (BA) 203.30 -3.21% had favorable news on the re-approval for flights of its 737-Max jets. The stock gapped higher on the much-anticipated event but came under “sell the news” pressure closing down on the day. News of Tesla’s (TSLA) 486.64 +10.20% inclusion in the S&P 500 index drove the stock higher. Lowe’s (LOW) 146.74 -8.21% earnings disappointed. The shares have underperformed recently, and a bearish “Head and Shoulders” chart pattern has appeared to have formed.
Thursday, November 19, 2020 – DIA 295.33 +.19%, QQQ 292.38 +.78%, SPY 357.96 +.47%
Continuing Jobless Claims (week of Nov. 6) came in less than expected 6.372M vs. 6.47M Expected. Initial Jobless Claims came in higher-than-expected 742K vs. 707K. The markets spent most of the day in consolidation mode, closing positive on the day. Fiserv Inc. (FISV) 113.02 +4.68% announced a $6.5 billion buyback program. NetEase (NTES) 89.22 +4.35% blew out earnings estimates coming in $.79 vs. $.39. Workday (WDAY) 230.80 +3.22% moved up ahead of its earnings release. On the downside, United Healthcare (UNH) 337.00 -2.18% failed to break through from recent 52-week highs and now is close to what may be termed a False Breakout.
Friday, November 20, 2020 – DIA 292.53 -.73%, QQQ 290.38 -.68%, SPY 355.33 -.68%
The market opened mixed but closed down on continued media focus on Covid-19 infection rates and government-imposed restrictions (lockdowns). Go to lockdown stock Zoom (ZM) 439.60 +6.11% which advanced in a continued rally attempt. It's become a COVID on -COVID off name as cases spike and as actions are taken to lock down, we see Zoom react, and vice versa when we see positive vaccine news Also, reacting positively to lockdowns are the at-home crafts retailers like craft marketplace Etsy (ETSY) 140.06 +4.13% which moved higher. On the downside, Workday (WDAY) 209.40 -9.27% beat earnings but gave a poor outlook. Again, with more COVID-19 cases spiking, travel and leisure stocks took a drubbing. Norwegian Cruise Lines (NCLH) 19.99 -4.90%, Carnival (CCL) 17.37 -4.51% and Las Vegas Sands (LVS) 55-90 -4.54%
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