Highlights

Wall Street Breakfast

Author: bmotrader   |   Latest post: Wed, 20 Jan 2021, 8:50 AM

 

Wall Street Breakfast: Vaccine Rollout

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Less than two days after the FDA granted emergency authorization for Pfizer (NYSE:PFE) and BioNTech's (NASDAQ:BNTX) COVID-19 vaccine, nearly three million doses of the shot have been transported across the country. It's part of an historic mission to vaccinate more than 100M people by the end of March, with 145 sites in the U.S. poised to receive the vaccine today, and nearly 500 locations set to get their first doses on Tuesday and Wednesday. Five of the first vaccinations will take place at a national ceremonial "kickoff event" scheduled for this afternoon at George Washington University Hospital. Despite dry runs and contingency planning, a lot can go wrong. "Everything has to come together - the packaging, the dry ice, the vials, the material itself. It all has to come together to the same place and have enough of it and exactly the right people there ready to take it," said Yossi Sheffi, director of the MIT Center for Transportation & Logistics.

Covid - Inoculation challenges

According to official guidelines from the CDC, healthcare workers should be the first to get Pfizer's (NYSE:PFE) vaccine, alongside people that live and work in long-term care. That group consists of about 24M Americans, which will take up most of the doses that will be produced by the end of the year. The goal is for rest of the U.S. population to be vaccinated by summer 2021, though some hurdles remain. 1) The logistics hurdles mentioned above, 2) Roughly four in 10 Americans say they would "definitely" or "probably" not get a vaccine, according to a recent survey by Pew Research. To achieve herd immunity, experts say that about 70% of the population needs to be vaccinated or have natural antibodies. (25 comments)

Stocks - Futures point to another vaccine rally

Hopes for a continuing economic recovery saw cyclicals lead the advance for futures overnight as the U.S. gears up for a historic vaccine rollout. Dow +0.8%; S&P 500 +0.6%; Nasdaq +0.4%. "The vaccine has and will likely continue to provide a tailwind to the market that is allowing investors to look beyond record case levels, hospitalizations and deaths," said analysts at JPMorgan. On the stimulus front, a bipartisan group of lawmakers is readying a two-part proposal with $908B in pandemic relief, though disagreements remain between the two parties over liability protections for businesses and funding for state and local governments. The best chance for passing a bill would be to attach it to the 12-bill omnibus package Congress must pass by Friday to fund the federal government. It's a big week: The Federal Reserve will hold its final meeting of 2020 on Tuesday and Wednesday, with any guidance on continued asset purchases watched closely by Wall Street.

M&A - Merger Monday

A bout of dealmaking began over the weekend as AstraZeneca (NASDAQ:AZN) bulked up its rare disease portfolio with the $39B purchase of Alexion Pharmaceuticals (NASDAQ:ALXN), marking its biggest acquisition on record. Elsewhere in the pharma sector, GlaxoSmithKline (NYSE:GSK) was reported to be in the race to buy Eidos Therapeutics (NASDAQ:EIDX) by putting in an offer of $120/share, compared to the one already agreed to from BridgeBio Pharma (NASDAQ:BBIO). Other industries also saw increased activity. Educational-software maker Pluralsight (NASDAQ:PS) agreed to a $3.5B sale to Vista Equity Partners, Huntington Bancshares (NASDAQ:HBAN) unveiled an all-stock merger with TCF Financial (NASDAQ:TCF), and Electronic Arts (NASDAQ:EA) announced a $1.2B deal for U.K. videogame company Codemasters, trumping an earlier agreement with rival Take-Two Interactive (NASDAQ:TTWO). Looking ahead, the deals we will see will be "mainly conducted by the large companies that fared well during the COVID crisis and will be larger than normal, on average," writes SA contributor Baruch Lev.

Events - Hack at the highest level

Multiple federal government agencies, including the U.S. Treasury and Commerce Department, have reportedly had some of their networks breached as part of a global cyber espionage campaign believed to be the work of the Russian government. Staff emails were monitored for months, though the full scope of the hack isn't yet clear. Sources told Reuters that the breaches were related to a broad campaign that also involved the recently disclosed hack at FireEye (NASDAQ:FEYE), while a Washington Post report suggested the agencies were breached through a network management system called SolarWinds (NYSE:SWI). "The U.S. government is aware of these reports and we are taking all necessary steps to identify and remedy any possible issues related to this situation," said National Security Council spokesman John Ullyot. SWI -14.8% premarket.

Trade - Never-ending Brexit talks

In an unsurprising turn of events, U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed on Sunday to push Brexit trade talks beyond their latest deadline, sending sterling up 1.6% to $1.3431. "Despite the exhaustion after almost a year of negotiations, despite the fact that deadlines have been missed over and over, we think it is responsible at this point to go the extra mile," the two said in a joint statement after they spoke by phone. Meanwhile, investors continue to dump U.K. investments on fears that Britain may crash out of its Brexit transition period without a trade deal in place. U.K. equity funds have bled $2.4B over the past two months, according to data provider EPFR Global, bringing total outflows since the Brexit referendum in June 2016 to $42B. (39 comments)

Energy - Deciding on climate action

Should shareholders vote on a company's plans to tackle climate change? Unilever (UL, UN) thinks so. The consumer packaged goods giant will let stakeholders decide on its green transition, including reducing emissions to net zero (from sourcing to point of sale) by 2039, 11 years ahead of the Paris agreement deadline, as well as halving the environmental impact of products by 2030. "The economy-wide shift to net-zero emissions will require a greater and deeper level of engagement between companies and their investors about their climate transition plans," the conglomerate said in a statement. A climate action plan will be shared ahead of Unilever's annual general meeting on May 5, and the company will then seek a non-binding advisory vote every three years on any "material" changes.

On The Move - Key test flight aborted

Shares of Virgin Galactic (NYSE:SPCE) opened down 14% in premarket trade after a highly-anticipated weekend test flight ended prematurely as the engine of its SpaceShipTwo vehicle 'Unity' did not fully ignite. The spaceflight attempt was the company's first with the vehicle in nearly 22 months, with its previous mission reaching an altitude of nearly 90 kilometers on a test launch from the Mojave Desert in California. It was also the first of three remaining spaceflight tests the company plans to conduct to complete development of its spacecraft system as it looks to usher in an era of space tourism. Virgin Galactic has about 600 customer reservations on its books, most of which were sold at a price of $200K to $250K per ticket several years ago. Another 400 have expressed an interest in booking tickets to the edge of space when sales fully reopen in 2021. (91 comments)

Trending - Back to the office? Google says not so fast

Extending the remote work period for most of its staff due to the coronavirus pandemic, Google (GOOG, GOOGL) has pushed back the planned return to the office by a few months, to September 2021, NYT reports. More importantly, the tech giant is laying out a "series of proposed changes that may substantially alter how its employees and people at other technology companies will work." In an email to the staff on Sunday night, CEO Sundar Pichai said the company will test the idea of a "flexible workweek" once it is "safe to return to the office" to increase "productivity, collaboration, and well-being." Under the pilot plan, employees would be expected to work at least three days a week in the office for "collaboration days" while working from home for the others.

What else is happening...

Design refresh? Tesla (NASDAQ:TSLA) announces production shutdown for Model S and X.
Public Storage (NYSE:PSA) names new trustees to board after Elliott takes stake.
Cinemark (NYSE:CNK) eyeing AMC theater locations in case of default - NYP.
Alibaba (NYSE:BABA) fine signals another Chinese push to regulate tech firms.
Germany goes into lockdown on Wednesday, with non-essential stores to close.
Home price growth will rise at slower pace in 2021 - NAR panel.
    
Today's Markets

In Asia, Japan +0.3%. Hong Kong -0.4%. China +0.7%. India +0.3%.
In Europe, at midday, London +0.4%. Paris +1.1%. Frankfurt +1.2%.
Futures at 6:20, Dow +0.8%. S&P +0.6%. Nasdaq +0.4%. Crude +1.1% to $47.06. Gold -0.9% at $1827.20. Bitcoin +0.8% to $19108.
Ten-year Treasury Yield +3 bps to 0.92%

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