The Stock Market This Week: November 9-13
The Stock Market This Week: November 9-13
By: Stacey Nickens
- Earnings Reports
- McDonald’s delivered an upbeat earnings report, posting earnings of $2.22 per share compared to the estimated earnings of $1.90 per share. U.S. sales picked up in the third quarter and helped the fast food chain.
- Beyond Meat reported a loss of $0.28 per share. Analysts had expected Beyond Meat to post earnings of $0.05 per share. Their revenue also came in significantly lower than expected.
- Lemonade exceeded third-quarter earnings expectations. The digital renters’ insurance company showed revenue growth of 64% to $17.8 million. They also increased their full-year revenue guidance.
- Lyft similarly beat expectations and reported smaller losses than expected. Their revenue was still down 48% over the past year; however, Lyft reported $499.7 million in revenue compared to the $495.8 million expected in revenue. The ride sharing service reported that they are starting to see an uptick in demand after the pandemic crippled the industry.
- Economic News
- The Small Business Optimism Index for October remained unchanged.
- September job openings increased slightly to 6.436 million. There were fewer job openings in the federal government, in part due to a drop in demand for Census workers. Retail and educations services also saw fewer job openings. Food services, wholesale trade, transportation, and warehouse services saw job openings increase.
On Monday, major indexes rose after Pfizer announced some positive vaccine news. Pfizer announced that their small COVID-19 vaccine trial had a 90% efficacy rate among participants. As a result, many hard-hit industries (such as hospitality and travel) outperformed in daily trading. The balance turned against tech and growth stocks, chipping at their lofty valuations. As a result both the Dow Jones (+3%) and the S&P 500 (+1.2%) climbed higher, while the Nasdaq tumbled 1.5%. The financial and energy sectors both thrived as cyclical stocks performed strongly. However, with growth stocks falling, the communication services, information technology, and consumer discretionary sectors finished in the negative. Notably, the market also seemed bolstered by the possibility of a split Congress. A split Congress could bring about more political moderation and reduce the likelihood of sweeping policy changes. In individual company news, McDonald’s delivered an upbeat earnings report, posting earnings of $2.22 per share compared to the estimated earnings of $1.90 per share. U.S. sales picked up in the third quarter and helped the fast food chain. McDonald’s plans to introduce more plant-based options, competing with Beyond Meat who delivered disappointing earnings results on Monday. Beyond Meat reported a loss of $0.28 per share. Analysts had expected Beyond Meat to post earnings of $0.05 per share. Their revenue also came in significantly lower than expected.
On Tuesday, positive vaccine news continued to bolster the Dow Jones. Pfizer’s Monday announcement preceded ElI Lilly’s overnight report that they had received emergency use authorization for their antibody therapy. Cruise lines, airlines, and lodging companies all saw gains during the trading day as these companies stand to benefit from a successful vaccine. In general, value stocks in the energy, consumer staples, industrials, materials, and financial industries performed strongly. Both the Dow Jones and S&P 500 followed these industries upward before paring some of their gains before market close. In the end, the S&P 500 fell 0.1%, and the Dow Jones added 0.9%. Comparatively, the pandemic’s safe haven – tech stocks – struggled to perform in daily trading. As a result, the Nasdaq fell 1.4% as the information technology, consumer discretionary, and communication services industries finished in the negative. In individual company news, Boeing stock got a boost from the news that the FAA would approve their 737 Max by November 18. Economic reports were neutral or positive. The Small Business Optimism Index for October remained unchanged, while September job openings increased slightly to 6.436 million. There were fewer job openings in the federal government, in part due to a drop in demand for Census workers. Retail and educations services also saw fewer job openings. Food services, wholesale trade, transportation, and warehouse services saw job openings increase.
On Wednesday, tech stocks recovered some of their losses from earlier in the week. The communication services, information technology, and consumer discretionary industries had a much stronger day. As a result, the Nasdaq gained 2.01%. Consumer staples, real estate, and utilities also finished in positive territory and helped the S&P 500 rise 0.8%. However, the energy, financials, health care, industrials, and materials sectors finished in the negative. With a shift away from value towards growth, the Dow Jones fell 0.1%. Analysts believe this market recalibration is an overall healthy move. As the economy continues to recover, the market may return to standing on all of its legs. The market would theoretically then rely less on tech and mega-cap stocks and more on value and smaller cap equities. The next couple of months may feature an oscillation between these areas of the market as the market redistributes its weightings. In individual company news, Lemonade exceeded third-quarter earnings expectations. The digital renters’ insurance company showed revenue growth of 64% to $17.8 million. They also increased their full-year revenue guidance. Lyft similarly beat expectations and reported smaller losses than expected. Their revenue was still down 48% over the past year; however, Lyft reported $499.7 million in revenue compared to the $495.8 million expected in revenue. The ride sharing service reported that they are starting to see an uptick in demand after the pandemic crippled the industry.
This article will not be updated on Thursday, November 12, or Friday, November 13. Please seek other news sources for market updates.
