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4:00 p.m. ET: Stocks close at new records, riding risk wave
Each of the three major stock indices soared to new closing highs again Friday, riding the momentum of a December rally that has yet to falter despite the absence of fresh news.
Here’s where markets settled at the end of regular equity trading:
S&P 500 (^GSPC): +0.49%, or 15.86 points
Dow (^DJI): +0.28%, or 78.13 points
Nasdaq (^IXIC): +0.42%, or 37.74 points
10-year Treasury yield (^TNX): +1.1 bps to 1.919%
Gold (GC=F): -0.23% to $1,481.00 per ounce
The Dow stayed in positive territory Friday morning even as a decline in shares of component Nike (NKE) capped gains. The athletic-wear maker late Thursday announced quarterly earnings and revenue that topped expectations.
3:15 p.m ET: Google/Alphabet’s Sundar Pichai awarded more stock
Alphabet’s (GOOG) newly instated Chief Executive Officer Sundar Pichai would receive a hefty $240 million in performance-based stock awards over the next three years, the highest ever promised to any executive of the search giant.
Pichai would also take home $2 million in annual salary starting 2020, according to a regulatory filing on Friday. That compares with a $1 salary received by Larry Page in the same role last year.
2:25 p.m. ET: United Steel swoons after barrage of bad news
U.S. steelmakers are facing slowing demand in the manufacturing sector, even though mills have enjoyed protection because of Trump administration tariffs. U.S. Steel has been a laggard in the domestic industry, with aging plants that are less efficient than rivals with newer technology. That’s led to a spate of operational initiatives under different names that have shifted multiple times since 2014.
1:45 p.m. ET: Goldman’s perma bull argues for immigration
In new research, Goldman Sachs’ Abby Joseph Cohen makes the case for the reliance of U.S. growth on population increases, fueled by immigration:
Over the last decade, 42% of the net growth in U.S. population, and 54% of the net growth in the workforce, can be attributed to immigration. During the same period, the birth rate of native-born Americans has decreased, and the death rate has increased, due to aging. Immigrants now comprise roughly 15% of the total U.S. population. And because they tend to be younger than native-born Americans, immigrants now comprise about 17% of the U.S. workforce.
Immigrants are heavily represented in highly-skilled areas such as IT, mathematics, engineering and healthcare. The native-born pipeline has proven inadequate at filling these positions. Foreign-born workers are also found in many low-end service jobs that are not easily scaled by automation. These occupations, at both ends of the skills spectrum, are projected by the U.S. Department of Commerce to grow rapidly in the coming decade.
1:15 p.m. ET: Comcast may tier pricing on its streaming platform: CNBC
The intensifying streaming wars are forcing new entrants to try and explain to consumers why they should pay for a new service. According to a report by CNBC, Comcast (CMCSA) may offer live streaming of NBC content on its Peacock platform — a big departure from Netflix, Disney+ (DIS) or Apple TV+ (AAPL) — while offering viewers more ad-free bang for their buck:
Users will be greeted by streaming content, similar to turning on traditional television, according to people familiar with the matter. The showcased video could be a live offering from NBC News Now, NBC’s free streaming news service that will integrate with Peacock, or an on-demand show, said the people, who asked not to be named because the product is still confidential.
Different versions of Peacock are still being beta-tested, as the service won’t launch until April, the people said.
Also, there’s this:
There will be two tiers of Peacock that require payment — a limited-advertising version that will cost about $5 per month and an advertising-free version that will cost about $10 per month, the people said.
12:15 p.m. ET: S3 Analytics: Tesla shorts have taken a nearly $8B bath
Tesla’s (TSLA) wild ride from a low of $178.97 in June to its current levels above $400 per share have wrongfooted short-sellers. Recall that CEO Elon Musk has ripped the bearish investor class for wreaking havoc on shareholder value (despite missed targets and a grim Q1 that caused even one Wall Street bull to throw in the towel).
In a research note, S3 Analytics calls it “a tale of two securities” that has cost the shorts nearly $8 billion:
Tesla is truly a tale of two securities, while the stock is up a respectable +21% for the year, it is up a blistering +126% since it’s low of $178.97 on June 3rd. Tesla short sellers were in the “best of times” and up +$5.16 billion in net-of-financing mark-to- market profits as Tesla lost -46% of its value from January 1st to June 3rd 2019, nearly offsetting the -$5.75 billion of mark-to-market losses they incurred from 2016-2018.
But since June 3rd, Tesla shorts were facing the “worst of times” and are down -$7.60 billion in mark-to-market losses. Tesla shorts are now “in the winter of despair” and down -$2.43 billion in mark-to-market losses for year-to-date 2019. Tesla shorts are down -$1.16 billion in mark-to- market losses this week alone.
12:00 p.m. ET: United to ground its fleet of Boeing 737 MAXs until June
United Airlines (UA) announced on Friday that it would ground its fleet of 737 MAX planes until June 4, 2020, at the earliest, resulting in the cancellation of thousands of flights each month as fallout from Boeing’s troubled flagship ricochets across the economy. Boeing’s stock (BA) is down 1% on the session, amid a broad market rally.
10:50 a.m. ET: Money is rotating back into stocks
As recession fears ease, billions of dollars are flowing back into stocks and equity funds, an investor tells Yahoo Finance’s On the Move:
“It seemed as though investors are trying to play catch up because they have a fear of missing out (FOMO) on the next upside movement in stocks,” said Kevin Mahn the president and chief investment officer at Hennion & Walsh Asset Management. “I think it’s that fear that’s going to carry forward at least into the first quarter of next year and propel stocks even higher.”
10:40 a.m. ET: Who owns stocks? Half of US does, Deutsche says
Deutsche Bank’s Torsten Slok points out that almost 1/2 of the U.S. population owns shares:
Half of the US population owns equities directly or indirectly (i.e. in pension accounts). Of all stocks owned by US households 84% are owned by the Top 10%
In other words, the ubiquity of retirement accounts means that a sizable chunk of U.S. workers are passively invested in the markets — not just wealthy investors.
10:30 a.m. ET: Analysts stay ‘very bullish’ on Nike
At least eight brokerages boosted their price target on the Dow-component’s stock on Friday, with Deutsche Bank making the most bullish move by raising it to $120, above Nike’s current share price of about $100.
“Given Nike’s significant scale and IT spend advantage, coupled with its early lead in digital, we remain very bullish on the company’s ability to continue to maintain its momentum in digital,” said Evercore ISI analyst Omar Saad.
10:25 a.m. ET: New data shows IPO market tightened for Chinese companies
Fewer Chinese companies came to the U.S. public market in 2019, amid tightening security in the U.S. and relaxed rules at home, Yahoo Finance’s Krystal Hu reports. Compared to 35 deals last year that generated proceeds of $9 billion, only 25 Chinese companies listed in the U.S. in 2019 — and raised less than half of 2018’s money, according to data compiled by Renaissance Capital.
10:15 a.m. ET: Alibaba spinoff Alipay valued at $150 billion
The world’s most valuable private tech unicorn isn’t WeWork, Airbnb, Juul, Palantir, or Stripe. It’s Chinese payments firm Ant Financial Services, a spinoff from Alibaba that is valued at an eye-popping $150 billion.
Ant Financial’s core product, mobile payments wallet Alipay, quietly passed the 1 billion mark in September, Yahoo Finance’s Dan Roberts reports.
9:50 a.m. ET: UK Parliament (finally) approves Brexit
Britain’s lawmakers have voted to approve Prime Minister Boris Johnson’s bill to withdraw the U.K. from the European Union, Johnson’s first test of the commanding parliamentary majority he won just a week ago and setting the stage for a January 31 exit.
The pound (GBP) is adding to the day’s gains, but off the spike high above $1.34 it hit last week after the Tories won the general election. Eurasia Group’s Mujtaba Rahman warned that the risks are far from over as the country moves toward striking a trade and border deal with the EU:
In light of the strength of the divergence narrative at the centre of government, we now think a low alignment equilibrium is a more realistic landing zone between the UK and EU than a high alignment one. With minimal, dynamic level playing field commitments, tariffs will become a real possibility. Although ministers do not exclude the possibility that both sides could keep talking to finalise a deal if necessary, whether on trade or other chapters, without calling it a formal extension, we think the politics will prove harder. Indeed, there remains much scepticism in Brussels about the ease with which an extension independent of the Withdrawal Agreement may be done.
The risk that no mutually acceptable landing zone materialises in the timeframe available to negotiators on both sides is therefore a very real possibility. We therefore assign a 15-20% risk of no UK-EU deal next year.
Far from taking the heat out of Brexit, 2020 looks set to be another bumpy year.
9:30 a.m. ET: Stocks hold near record highs as Nike caps gains
Wall Street opened at new record highs, as traders probed the upside in the absence of fresh news. Dow component Nike (NKE), however, dropped by more than 1% after announcing quarterly earnings and revenue that mostly topped expectations, but fell short on margins and sales.
Here’s where markets began trading on Friday:
S&P 500 (^GSPC): +0.47%, or 15.14 points
Dow (^DJI): +0.39%, or 111.05 points
Nasdaq (^IXIC): +0.40%, or 35.19 points
10-year Treasury yield (^TNX): flat to 1.9350%
Gold (GC=F): flat to $1,483.40 per ounce
Separately, investors were cheered by third quarter growth figures, which were unrevised at 2.1%. It suggests the economy is in good health heading into 2019’s final stretch. JPMorgan Chase noted on Friday that modest downward revisions to inventories have “positive implications for Q4” growth, which the bank expects to check in at 2.0%.