Archives of “November 2020” month

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China COVID-19 vaccine producer Sinovac still trying to find info on halt of trial

  
  Analysis

Chinese vaccine producer Sinovac said it is still trying to find out more details on the halted trials of their vaccine candidate.

Earlier headline:
  •  China COVID-19 vaccine trial halted because of a death, unrelated to vaccine
The Brazilian health regulator on Monday halted trials of Sinovac’s COVID19 vaccine in the country due to unspecified “adverse incident.”

Federal Reserve says assets may have a large decline if coronavirus is not contained

  
  Analysis
Major points from the report (Headlines via Reuters):

 

  •  business debt has risen sharply; reduction in economic activity has weakened ability to service debt
  • household loan defaults may rise
  • banks continue to be well-capitalized, though challenging conditions remain
  • strains in household, business sectors mitigated by government lending, relief and low interest rates
  • protracted slowdown could harm finances of even households with high credit scores, leading to defaults
  • sources of vulnerability in household, business sectors unevenly distributed
  • Fed includes climate change risks in financial stability report for first time
  • climate risks could result in more frequent, severe financial shocks
  • disruptions in global dollar funding markets are ‘important risk’ to financial system
  • fiscal stimulus, lower interest rates, emergency lending facilities and asset purchases supported stronger-than-expected economic recovery
  • uncertainty remains high and investor risk sentiment could shift quickly if recovery proves less promising or efforts to contain coronavirus disappoint
  • most banks’ common equity tier 1 (cet1) ratio recovered to pre-pandemic levels in the second quarter as demand for bank credit waned and earlier drawdowns were repaid
  • yields on corporate bonds dropped to historically low levels but remain elevated for airlines, energy and leisure industries heavily affected by pandemic
  • true status of bank loan credit quality is not reflected in loan delinquencies because of loss-mitigation programs, government stimulus payments, and ppp loans
  • delinquency rates on commercial mortgage-backed securities have spiked
  • as programs expire, some accounts in loss mitigation could result in higher bank delinquency rates later this year and early next year, followed by higher charge-off rates and losses
  • all told, a great deal of uncertainty about the future path of these losses remains
  • strength in housing sector reflects robust demand from households but downside risks remain, given unusually large number of mortgage loans in forbearance programs
  • leverage is at historically low levels at broker-dealers but is at post-2008 highs at life insurance companies
  • leverage remains elevated at hedge funds relative to past five years
  • funding strains on mortgage servicers eased after policy actions, but uncertainties remain
  • money markets have stabilized but would be vulnerable without the emergency facilities in place
  • outflows from long-term mutual funds that hold less liquid assets have mostly reversed
  • redemption waves had run-like characteristics that highlighted significant structural vulnerabilities in the sector
  • collateralized loan obligation fundamentals have improved but are still weak compared with pre-pandemic levels

NASDAQ tumbles into the close. Dow and S&P close higher but near session lows

  
Analysis, US Market

Dows best day since June 5

The major indices opened sharply higher on the back of the Pfizer news on a vaccine. The gains were led by the Dow industrial average the S&P index. The NASDAQ index went along for the ride early on. However, a late day selling pushed the NASDAQ into negative territory. The Dow industrial average and S&P index also close near session lows but still higher on the day.

  • All the major indices reached intraday all time record highs.
  • Dow had his best day since June 5
  • Covid gainers got hammered today including Zoom, Home Depot, Whirlpool, Amazon and Netflix

A look at the final numbers shows:

  • S&P index rose 41.06 points or 1.17% at 3550.50. The high price reached 3645.99. The low price extended to 3547.48
  • NASDAQ index fell -181.448 points or -1.53% at 11713.78. It’s high price reached 12108.06. The low price reached 11703.49
  • Dow industrial average rose 834.57 points or 2.95% at 29157.97. It’s high price reached 29933.83. The low price extended to 29130.66.
Some losers today included:
  • Zoom, -17.4%
  • Crowdstrike, -10.76%
  • Whirlpool, -10.4%
  • snowflake, -9.49%
  • Netflix, -8.56%
  • Square, -7.09%
  • Costco, -5.39%
  • Amazon, -5.06%
  • Facebook, -5.04%
  • Home Depot, -5.03%
winners included:
  • American Express, +21.43%
  • United Airlines, +19.23%
  • American Airlines, +15.18%
  • Bank of America, +14.27%
  • Boeing, +13.71%
  • J.P. Morgan, +13.62%
  • Walt Disney, +11.87%
  • Citigroup, +11.64%
  • PNC financial, +11.57%
  • Exxon Mobil, +10.34%
  • MasterCard, +9.93%
  • Southwest Airlines, +9.72%

For those questioning the timing of the Pfizer vaccine news

  
  Analysis

Did they wait until after the election?

Did they wait until after the election?
Who cares!? Maybe they did, maybe they didn’t.
If you’re a financial market participant and that’s what you’re thinking about today, then you’re in the wrong game. This is the best news anyone has had this year and the opportunities in markets today are spectacular; focus on that.
I’m sick of politics. It’s been non-stop politics for four years because some of it mattered for financial markets. We can only hope that politics are going to matter less in the next four years because I would much rather be trading on economic fundamentals and news like this.
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