European shares have followed Wall Street into the red this morning as a worrying rise in Covid cases sees jittery investors sell off stocks. Hot off the heels of the positive news that Pfizer’s vaccine was up to 95% efficacy, the US death count hitting the milestone 250,000 mark caused markets to slide. This shows how delicately poised markets are and that news of a vaccine is not sufficient, approval and vaccinations being rolled out is what will make the real difference.
US markets opened higher yesterday and stayed that way until lunchtime, before selling off sharply in the afternoon. The daily US death toll hit its highest level in six months on Tuesday and the daily new case count is running above the 150,000 mark. That is around a quarter of the global total daily new cases. The Dow Jones Industrial Average and S&P 500 both closed the day 1.2% lower. In the S&P, the energy sector fell hardest, losing 2.9% overall.
In corporate news, Boeing’s 737 Max airliner – which has been grounded for more than a year after two fatal crashes – cleared a crucial hurdle to be allowed to return to the skies. The plane was cleared to fly in the US by the FAA, although that clearance does not extend internationally and changes to the planes will be required before they can be flown with passengers. Pilots will be required to complete additional training, and the FAA has to inspect each individual plane. The approval news wasn’t enough to lift Boeing stock, which followed the pattern of the broader market on Wednesday and closed 3.2% lower.
Lowe’s stock sinks despite firm doubling online sales
At the bottom of the S&P 500 yesterday were home improvement supplies firm Lowe’s, Norwegian Cruise Line and energy company Phillips 66. Lowe’s stock slumped by more than 8%, despite reporting a doubling in online sales, it marginally missed earnings expectations in its Wednesday quarterly earnings update. Oppenheimer analyst Brian Nagel told CNBC that the market is less interested in online sales gains than the broader question of what is next for the company once the Covid-19 crisis comes to a close and elevated home improvement demand subsides.
Nvidia also delivered quarterly earnings on Wednesday, where it beat both revenue and earnings expectations. The firm’s share price still fell back in after-hours trading, however, as the company predicted a decline in data centre sales – a division that has been a key growth driver in 2020.
S&P 500: -1.2% Wednesday, +10.4% YTD
Dow Jones Industrial Average: -1.2% Wednesday, +3.2% YTD
Nasdaq Composite: -0.8% Wednesday, +31.5% YTD
Micro Focus soars 30% on upbeat outlook
After gaining 0.9% on Wednesday, the FTSE 250 is now back into single-digit loss territory in 2020, at -9.98%. Business software firm Micro Focus International was the biggest winner in the index yesterday, with its share price jumping 30% after delivering a promising forecast in its earnings report. Year-to-date, the firm’s share price is still down more than 60%.
The FTSE 100 was led to its 0.3% gain on Wednesday by RSA Insurance Group, homebuilder Taylor Wimpey and energy firm SSE, which all added more than 4%. There were no major events on Wednesday affecting sentiment, but pharmaceutical company Pfizer offered up additional data on the efficacy of its Covid-19 vaccine, which showed it protected 94% of over 65-year-olds in a phase three trial.
FTSE 100: +0.3% Wednesday, -15.3% YTD
FTSE 250: +0.9% Wednesday, -10% YTD
What to watch
Intuit: Finance and accounting software firm Intuit has gained 35% in 2020, including a 14% increase over the past three months. The firm sells popular products TurboTax and QuickBooks, and owns a huge portion of the online tax preparation market in the US. Intuit delivers its latest set of quarterly earnings today, after beating expectations last quarter. Wall Street analysts’ expectations for the firm have ticked up over the past three months, with an earnings per share figure of $0.41 anticipated for the latest quarter.
NetEase: Chinese internet technology firm NetEase is a major provider of online and mobile games and internet services in China. The company has a Nasdaq listing in the US, and has added nearly 40% to its share price year-to-date. Netease delivers its latest quarterly update on Thursday morning New York time, with its dividend and how gaming demand has sustained in China after several months of Covid-19 being effectively contained. Wall Street analysts lean heavily towards a buy rating on the stock.
Workday: Financial and human capital management software firm Workday offers businesses access to a range of applications through the cloud, and as such has gained more than 35% in 2020 so far on the back of mass remote working. That rally has stalled recently, however, with the stock close to flat over the past month. Workday will report quarterly earnings today; demand for its cloud-based human capital management solutions will be a key point of focus, according to Zacks Equity Research. Over the past three months, multiple analysts have upgraded their view of the stock to a buy rating.
Crypto corner: Unfortunate bitcoin holder spends $47,000 on single transfer
An unlucky bitcoin holder has spent $47,000 in transaction fees to send 0.01088549 bitcoins (around $193) by mistake.
In most likelihood the mistake was made by accident with an unknown user setting the fee manually – in this case paying 2.66038352 Bitcoin to send a much smaller sum, according to Decrypt.
This is not the costliest blunder an unknown cryptoasset holder has made though. Back in June, an ethereum holder spent $2.6 million to send $130 of ETH – an extraordinarily large fee.
Typically the average bitcoin transfer fee is about 0.00025 BTC – or around $4.45. In October a so-called ‘bitcoin whale’ moved over $1 billion-worth of the cryptoasset but paid a fee of just around $3.
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