Equities Mixed As Markets Assess Impacts of Vaccine News…..
U.S. stocks closed mixed following yesterday’s noticeable jump, as the markets evaluated what the broader impacts of yesterday’s positive COVID-19 vaccine news from Pfizer and BioNTech could mean. The report fostered a level of uncertainty regarding the implications on a potential new fiscal relief package, while also extending the rotation to cyclically-natured value stocks out of growth stocks. Moreover, the markets appeared to assess the potential impact on the industries that were boosted by the stay-at-home standard of living ushered in by the pandemic, as the Technology sector lagged. In equity news, Target and Ulta Beauty announced a strategic partnership, Beyond Meat posted an unexpected loss, and the FDA granted Emergency Use Authorization for Eli Lilly’s investigational COVID-19 treatment. Treasury yields extended a recent jump as bond prices fell, and the U.S. dollar took a breather after yesterday’s gain. Crude oil prices continued to rise and gold rebounded somewhat from yesterday’s tumble. In economic news, small business optimism held steady, while job openings came in a bit shy of estimates. Asia finished mostly higher and Europe closed higher as the markets continued to be buoyed by the Financials and Energy sectors.
The Dow Jones Industrial Average rallied 263 points (0.9%) to 29,421, the S&P 500 Index was down 5 points (0.1%) at 3,546, and the Nasdaq Composite was down 160 points (1.4%) to 11,554. In heavy volume, 1.2 billion shares were traded on the NYSE and 4.6 billion shares changed hands on the Nasdaq. WTI crude oil traded $1.07 higher at $41.36 per barrel and wholesale gasoline added $0.03 to $1.19 per gallon.
Small business optimism holds steady, job openings miss forecasts…..
The National Federation of Independent Business (NFIB) Small Business Optimism Index for October remained at September’s 104.0 level, compared to the Bloomberg estimate of a slight increase to 104.1. Four of the 10 index components improved during the month, while five declined and one was unchanged. The NFIB noted that all the data was collected prior to Election Day, and its Uncertainty Index was the highest since November 2016, likely driven by the election and uncertain conditions in future months due to the COVID-19 pandemic and possible government-mandated shutdowns.
The report said other key findings included that earnings trends have improved to pre-crisis levels, inventory investment plans increased, and real sales expectations rose, but owners expecting better business conditions over the next six months declined. Finally, the NFIB said small business owners are looking to hire, reporting a historically high level of job openings in October.
The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, showed 6.44 million jobs were available to be filled in September, versus forecasts calling for 6.50 million jobs, and up from August’s downwardly-revised 6.35 million figure. The report showed the hiring rate dipped to 4.1% from August’s 4.2% rate and separations remained at the prior month’s 3.3% pace.
Treasuries added to yesterday’s drop, as the markets react to the presidential election results and the favorable news on the COVID-19 vaccine front. The yield on the 2-year note added 1 basis point (bp) to 0.18%, while the yields on the 10-year note and the 30-year bond rose 3 basis points (bps) to 0.95% and 1.74%, respectively.
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