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Stimulus Hopes Persist? Markets Gain 1-2%; Plus MDLZ, PYPL, NCLH, RCL

Mark Vickery
·3 min read

Renewed hopes for post-election stimulus helped boost market indexes to solid gains to start a new week and month of trading: the Dow rose 1.6%, or 423 points; the S&P 500 +1.23% or 40 points; and the Nasdaq crossed into the green later in the day, finishing +0.42% or 46 points. The small-cap Russell 2000 outperformed all of them Monday, +1.96%, while the small-cap S&P 600 rose an even higher +2.14%.

That these smaller growth firms would be bidding up on this strongest day in the market for four weeks suggests new stimulus money is again starting to be priced into stocks, especially domestic small-caps without a relatively wide range of revenue streams. We also see Value stocks beginning to assert themselves in the market, which would further suggest economic improvements, again which might be sparked by new stimulus. Just when this new congressionally ordained windfall would take place, however, is a bigger question.

All 11 sectors of the S&P 500 closed positive today, led by Energy, which swung from the red early in the day to +3.7%; Materials rose 3.4%; Staples were up 1.6%. A strong 3.5% upswing in WTI Crude Oil may suggest some seasonal strengthening on the Oil & Gas market as colder weather months continue to approach, along with lower global inventories of oil barrels.

Major cruise line companies Norwegian NCLH and Royal Caribbean RCL have continued their suspension of new ship sailings through the remainder of 2020. Protocols to be enacted in the future — Covid testing facilities on-board, social distancing/mask wearing, etc. — will likely be pursued between now and when the next sailing are expected in 2021.

Snack giant Mondelez MDLZ posted in-line earnings after Monday’s close at 63 cents per share, on revenues that outperformed expectations: $6.67 billion versus $6.49 billion in the Zacks consensus. North America net sales grew nearly 13% on higher volumes and prices, offset somewhat by -17% growth in Latin America. Organic revenue growth guidance rose to 3.5% for the full year. The company which makes Oreos, Triscuits, Halls cough drops and Trident gum, to name a few, has not posted an earnings miss since Q4 2016. Shares are down 1.2% on the news, roughly flat year to date.

PayPal PYPL made easy work of its Q3 earnings results, beating on the bottom line by 13 cents to $1.07 per share on revenues of $5.4 billion, which beat the $5.04 billion in the Zacks consensus and rose 25% year over year. Total Payments Volume to 247 billion in the quarter was +36% from the year-ago quarter, and the company has raised earnings guidance for the full fiscal year. Yet shares are taking a hit in the after market following a stellar 2020 so far, up 70% year to date.

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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
 
Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report
 
Norwegian Cruise Line Holdings Ltd. (NCLH) : Free Stock Analysis Report
 
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
 
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