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| | Top News  Shutterstock Stocks rallied to fresh record highs Friday following a stronger than expected jobs report that showed 531,000 jobs added in October and a revised gain of 312,000 in September. All three major market indexes closed at new all-time highs, even after a late drop in tech stocks weighed on the final Nasdaq number. Pfizer said interim data showed its COVID-19 pill reduced the risk of hospitalization or death by 89%, which boosted classic reopening plays such as airlines and cruise ships. And positive momentum carried over from the Fed's signal this week that inflation is "transitory" and likely would not require a fast rise in interest rates. For the week, the S&P 500 gained 2%, pushing its year-to-date gains to 25%, the Dow added 1.4%, and the Nasdaq rallied 3.1% for its best weekly showing since April. | | Energy Clean energy investors this week set their sights on the COP26, a U.N.-sponsored climate summit in Glasgow. It follows mixed climate reviews coming out of the G20 last weekend, with some citing breakthroughs such as a commitment to stop financing new coal-fired power plants overseas and others saying the communique offered little specifics. Complicating matters is a global energy crunch that has prompted China to turn to coal to avert power shortages, Europe to seek more Russian gas and the U.S. blaming the OPEC oil "cartel" for soaring gasoline prices. Why is it important? The goal of the COP26 is to finalize the 2015 Paris Agreement, which aimed to limit the rise in average world temperatures to well below 2, preferably to 1.5 degrees Celsius compared with pre-industrial levels. However, that meeting left out concrete details on how to achieve that objective, as well as how countries report emissions, what standards are used and who is responsible for auditing the data. Carbon offset trading is another area that will be discussed, as well as rules governing that framework. President Biden headed into Glasgow with a half-a-trillion-dollar plan to cut greenhouse gas emissions, or what National Climate Advisor Gina McCarthy called the "largest investment to combat the climate crisis in American history." The current framework agreement is still pending congressional approval, however, with a $150B program aimed at pushing utilities to draw more power from clean energy sources under pressure from Sen. Joe Manchin. Countries and companies also detailed what they are doing independently of the Paris climate accords, including cutting methane emissions, as well as pledges for electric vehicles. Thought bubble: Developing nations want wealthier countries like the U.S. to fork over more money to help ease the energy transition, saying it's unfair to sacrifice for the good of the planet after America spent decades industrializing without any restrictions on its growth. India's Foreign Affairs Minister Subrahmanyam Jaishankar specifically cited a need for wealthier nations to raise $100B a year to help poorer countries, calling it "less than the money [that the] NFL is making from media rights." The negotiations will ultimately boil down to questions of fairness and trust, as well as how much each nation will be able to commit given their economic resources. ( 30 comments) | | Sponsored By StartEngine  With a goal to help raise $10 billion by 2029, StartEngine has big plans... and they're already gaining momentum: - 146% revenue growth YoY in the first half of 2021.
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Disclaimer:Reg A+ offering made available through StartEngine Crowdfunding, Inc. Investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment. View StartEngine Crowdfunding, Inc's offering circular and selected risks. Past performance may not be indicative of future results. | | Real Estate Zillow ( Z) said it would wind down its Zillow Offers iBuying Service after the real-estate fintech decided forecasting home prices is too unpredictable. The company's Q3 results included a $304M writedown of inventory as a result of purchasing homes in Q3 at higher prices than its current estimates of future selling prices, while it expects to take an additional $240M-$265M of losses in Q4. It will sell its portfolio of roughly 7,000 homes over the next several quarters, which will also include a reduction of Zillow's workforce by around 25%. Stock movement: After stumbling on Monday, Zillow closed down 10% on the news on Tuesday, and fell over 20% to $64/share on Wednesday. That's down from last week's peak of nearly $104, bringing losses over the three sessions to 38%. "We've determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility," said Zillow Group (NASDAQ: ZG) co-founder and CEO Rich Barton. More explaining: "We went into the business as a big swing on the bet that we could accurately predict the price of a home six months into the future, and what happened was... COVID happened," he later told CNBC. The company also noted that market watchers shouldn't interpret Zillow's decision as a call of a top in the housing market, but it rather stemmed from higher-than-expected volatility. In fact, fundamentals of the housing market remain "quite strong," according to Barton, who stressed that the firm will "wind down our inventory in an orderly way." ( 178 comments) | | Central Banking Stocks continued their march higher following a predicted move by the Fed to wind down its pandemic-era bond purchases. The central bank will cut its monthly Treasury purchases by $10B and mortgage-backed securities by $5B, bringing an end to the program in mid-2022. Prior to the announcement, the Dow and S&P 500 were trending down, but picked up after the decision was publicized and closed in positive territory.
Markets still at records? Fed Chair Jerome Powell highlighted that tapering doesn't mean policymakers will hike interest rates any time soon. He also held to the belief that high inflation would prove "transitory," and would not likely require a rapid change in policy. An accompanying statement still hedged that risk, warning that supply chain imbalances have meant "sizable price increases in some sectors," though Fed will continue to be "patient" and "monetary policy will continue to provide strong support to the economic recovery."
"This taper was probably the best telegraphed or advertised move in monetary policy history," explained Art Hogan, chief market strategist at National Securities Corporation. "It was more dovish than markets expected," added Mona Mahajan of Edward Jones. "Anytime there's a whiff of lower rates, we tend to get favorable market reactions."
Go deeper: Even if central banks tighten policy sooner rather than later, the effects could fail to drag real yields higher, if the market assumes that it's not enough to catch up with inflation. Furthermore, much of the inflation being felt in the economy is from transportation bottlenecks and supply shortages, so hiking rates may not help that front. What they could do is hit the brakes on the demand side, but depending on who you ask, that could risk damaging the economic recovery or prevent it from overheating.
| | Earnings Peloton ( PTON) fell off the exercise bike late Thursday as shares cratered 30% to $60 in AH trading. The company slashed its annual revenue forecast by as much as $1B ($4.4B to $4.8B vs. a prior view of $5.4B), and cut estimates for subscribers and profit margins. It was also impacted by the unusual year-ago comparisons, as well as widely-reported supply chain problems and commodity cost pressures. What happened? As people return to the gym following a pandemic hiatus, demand for Peloton equipment is not what it once was. Even before the update, the stock was down about 40% YTD (and tumbled 4% in the session prior to earnings). The softer than anticipated start to Q2 challenged visibility into near-term operating performance and lead Peloton to subsequently "recalibrate" its fiscal year outlook. Back in August, the company hurt its profitability by cutting the price of its original bike by $400. Peloton further joined a chorus of corporations slamming Apple's ( AAPL) ad-related privacy changes, which have made it more difficult to target shoppers. Attempts to scale back costs won't begin to show up for a quarter or two, while the firm hopes to be profitable before EBITDA by fiscal 2023. Response from Peloton: "We remain convinced that the growth opportunity for Peloton is substantial and this informs our decision to prioritize accessibility and household acquisition over near-term profitability, particularly as our industry-leading net promoter scores and retention rates support a very strong consumer LTV (lifetime value) and unit economics." ( 191 comments) | | Covid The Biden administration unveiled the details of its vaccine mandate for the private sector after rolling out a kids vaccine campaign for children between the ages of 5 and 11. Companies subject to the rules must guarantee that employees who aren't vaccinated against COVID produce a negative test at least weekly and wear a mask in the workplace. Employers are also not obligated to provide or pay for the tests, only if collective bargaining agreements require them to do so. Bigger picture: The directive will apply to businesses with 100 or more employees, covering 84M workers nationwide. Employers who don't adhere to the requirements could face penalties of up to $13,653 for each reported violation, while the Occupational Safety and Health Administration will also check on compliance through company record-keeping and some in-person inspections. The mandate will come into force on Jan. 4, a month after a different vaccine directive goes into effect for federal contractors. "Vaccination requirements are good for the economy," President Biden wrote in a White House statement. "While I would have much preferred that requirements not become necessary, too many people remain unvaccinated for us to get out of this pandemic for good." Statistics: 37% of unvaccinated workers say they would leave their jobs rather than comply with a jab or testing mandate, according to the Kaiser Family Foundation. Another 46% would get tested weekly, while 11% say they would get the shot (6% don't know or refused to answer the poll conducted between Oct. 14-24). The mandate comes after a record 4.3M workers quit their jobs in August, the highest turnover in 20 years, and amid widespread concerns about supply chain bottlenecks and an economy that's still in recovery mode. ( 25 comments) | | U.S. Indices
Dow +1.4% to 36,328. S&P 500 +2.% to 4,698. Nasdaq +3.1% to 15,972. Russell 2000 +6.1% to 2,437. CBOE Volatility Index +1.4% to 16.48.
S&P 500 Sectors
Consumer Staples +2.4%. Utilities +0.4%. Financials -0.6%. Telecom +1.4%. Healthcare -0.7%. Industrials +1.8%. Information Technology +3.3%. Materials +3.2%. Energy +1.3%. Consumer Discretionary +5.%.
World Indices
London +0.9% to 7,304. France +3.1% to 7,041. Germany +2.3% to 16,054. Japan +2.5% to 29,612. China -1.6% to 3,492. Hong Kong -2.% to 24,871. India +1.3% to 60,068.
Commodities and Bonds
Crude Oil WTI -2.9% to $81.17/bbl. Gold +2.% to $1,820./oz. Natural Gas +3.6% to 5.622. Ten-Year Treasury Yield +0.9% to 131.83.
Forex and Cryptos
EUR/USD +0.06%. USD/JPY -0.53%. GBP/USD -1.4%. Bitcoin -0.9%. Litecoin +4.9%. Ethereum +4.%. Ripple +7.6%.
Top Stock Gainers
Fat Brands Inc Cl B (NASDAQ:FATBB) +175%. Tdh Holdings Inc (NASDAQ:PETZ) +127%. Cassava Sciences Inc (NASDAQ:SAVA) +111%. Avis Budget Group (NASDAQ:CAR) +72%. Bed Bath & Beyond (NASDAQ:BBBY) +61%.
Top Stock Losers
Deciphera Pharmaceuticals Inc (NASDAQ:DCPH) -74%. Birks Group Inc (NYSE:BGI) -54%. Chegg Inc (NYSE:CHGG) -48%. Tabula Rasa Healthcare Inc (NASDAQ:TRHC) -48%. Bluebird Bio (NASDAQ:BLUE) -44%.
Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section. | | | | | Seeking Alpha's Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day. | | | | |
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