Live Market Updates: Stocks Have Biggest Monthly Gain Since April

Live Market Updates: Stocks Have Biggest Monthly Gain Since April

Credit…Pool photo by Caroline Brehman

The chair of the Federal Reserve and the secretary of the Treasury will paint starkly different visions of the challenges facing the United States economy in the months ahead on Tuesday, further exposing a rift that began to show earlier this month.

While Jerome H. Powell, the Fed Chair, will point to ongoing uncertainty over a vaccine, the economic dangers of a surge in virus cases and the persistent risks to economic prosperity during testimony before the Senate Banking Committee, Treasury Secretary Steven Mnuchin will blame state and local lockdowns as the threat to growth, according to their prepared remarks.

The contrast underlines the divide between two economic policymakers who, earlier in the crisis, worked closely as partners. Mr. Mnuchin announced earlier this month that he would end several Fed emergency loan programs, which are meant to keep credit flowing to state and local governments and medium-sized businesses alike. The Fed has suggested it is disappointed with that decision, and Mr. Powell will address it in his remarks.

Mr. Powell plans to note that the legislation gave “sole authority over its funds” to the Treasury secretary and that the Fed will give the money back. But he will nod to the fact that the Fed believes the programs should continue working.

“Our emergency lending powers require the approval of the Treasury and are available only in very unusual circumstances, such as those we find ourselves in today,” Mr. Powell will say, signaling that he does not believe conditions have returned to normal.

While he plans to reiterate that positive clinical trial results for several vaccine candidates spell good news for the medium term, he will warn that there are still big risks on the horizon.

“For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficacy across different groups,” Mr. Powell will say. “It remains difficult to assess the timing and scope of the economic implications of these developments with any degree of confidence.”

Mr. Mnuchin and Mr. Powell will be appearing jointly on Tuesday before the Senate Banking Committee, and on Wednesday they will testify before the House Financial Services Committee.

In his prepared remarks, Mr. Mnuchin touts the strength of the economic recovery but blames continuing economic shutdowns in some parts of the country for impairing progress and causing “great harm” to American businesses and workers.

Regarding the lending programs, Mr. Mnuchin reiterates his call for the $454 billion that is being clawed back to be reallocated to provide economic relief in a new stimulus bill.

“I continue to believe that a targeted fiscal package is the most appropriate federal response,” Mr. Mnuchin says in his prepared remarks. “The administration is standing ready to support Congress in this effort to help American workers and small businesses.”

Credit…Emily Kask for The New York Times

Exxon Mobil announced on Monday that it would significantly cut spending on exploration and production over the next four years and would write off up to $20 billion of investments in natural gas.

The company struggled to adapt as oil and gas prices tumbled this spring when the coronavirus pandemic took hold. While oil prices have recovered somewhat in recent months, they remain much lower than they were at the start of the year.

The company said it was removing gas projects from its plans in Appalachia, the Rocky Mountains, Oklahoma, Texas, Louisiana, Arkansas, Canada and Argentina.

Darren Woods, Exxon Mobil’s chief executive, said in a statement that the moves were designed to “improve earnings power and cash generation, and rebuild balance sheet capacity to manage future commodity price cycles while working to maintain a reliable dividend.”

Exxon’s board of directors accepted a proposal by management to slash capital expenditures to between $16 billion and $19 billion next year, down from $23 billion in 2020. This year’s capital expenditures had already been reduced from a planned budget of $33 billion, as the company slowed projects in Africa and the Permian Basin in New Mexico and West Texas.

The company said capital spending would be limited to between $20 billion and $25 billion annually through 2025.

In 2010, Exxon Mobil acquired XTO Energy and its natural gas assets for more than $30 billion, just as gas prices were peaking. Over the next decade, the shale boom flooded the market with cheap gas.

Exxon Mobil had previously resisted writing down assets by large amounts. Several of the largest oil companies have recently written down assets, including Royal Dutch Shell by up to $22 billion, BP by more than $17 billion and Chevron by $10 billion.

But Exxon has fared worse than other major oil companies during the pandemic. It was removed from the Dow Jones industrial average in August and has suffered three consecutive quarterly losses. It recently said it would cut 14,000 jobs, or 15 percent of its global work force.

Exxon’s stock, which is down more than 40 percent over the past year, is back to where it was in 2003. Company executives continue to express confidence about the future because Exxon is producing more oil and gas in the Permian Basin and in the offshore waters of Guyana and Brazil. The company has also committed to maintaining its dividend, which yields more than an 8 percent return on its share price.

Credit…Simon Dawson/Reuters

Arcadia Group, the British retail company owned by Philip Green that includes the Topshop clothing chain, has gone into administration, a form of bankruptcy, the company said Monday. It is one of the biggest retail collapses in Britain since the start of the pandemic.

Deloitte has been appointed as the administrator. Arcadia, which has 444 stores in Britain, 22 overseas and about 13,000 employees, said it would keep operating during administration.

Ian Grabiner, the chief executive of the group, said in a statement that he had hoped the company could “ride out” the pandemic. “Ultimately, however, in the face of the most difficult trading conditions we have ever experienced, the obstacles we encountered were far too severe,” he added.

No layoffs were announced Monday, but it remained unclear how many jobs could be saved as the administrator deals with the group’s finances.

Arcadia was reportedly seeking a £30 million ($40 million) lifeline, but on Monday the Fraser Group, a retail chain owned by a rival businessman, Mike Ashley, said its offer of a £50 million loan was rejected.

On Friday, Arcadia said lockdowns to curb the spread of coronavirus have had a “material impact” on its business. In recent years, the company has struggled to keep up with fast-fashion online rivals, and its dependency on physical stores has been a disadvantage as the virus has sped up the long-running demise of the British high street.

Earlier this month, during a lockdown period when nonessential stores were forced to close in England, foot traffic on British commercial areas was down 60 percent compared with last year, according to data from Springboard. Since February, online retail sales have grown 45 percent in Britain, while clothing sales — online and in-person — have declined 14 percent, the Office for National Statistics said earlier this month.

Last year, Arcadia entered into a company voluntary arrangement, a type of agreement insolvent companies can come to with creditors and keep operating. It closed more than 80 stores and renegotiated rents of others. It also filed for bankruptcy in the United States and closed all of its stores there.

The collapse of Arcadia is a new low in the career of Mr. Green, who was once deemed the “king of the high street” but has recently been the subject of allegations of racial and sexual harassment. He lives in Monaco, is frequently photographed aboard his 295-foot-long yacht, and used to commute to London in his private jet.

In 2006, Mr. Green was knighted for “services to the retail industry.” But Mr. Green’s reputation was hurt after he sold BHS, a department store chain founded in 1928, for £1 in 2015 and the company collapsed a year later with a pension deficit of £571 million. It prompted a parliamentary investigation, and in 2017 Mr. Green agreed to pay £363 million into the pension scheme.

Credit…Amy Sussman/Getty Images

Meredith Corporation has parted ways with J.D. Heyman, the editor in chief of Entertainment Weekly magazine, the company confirmed on Monday.

A Meredith spokeswoman said that the end of the editor’s tenure at the publication would go into effect “immediately.” The reason was not disclosed. Mr. Heyman, a former longtime editor at another Meredith-owned publication, People, became the top editor of Entertainment Weekly in June 2019.

“Meredith thanks J.D. for his contributions to the E.W. and People brands over his many years of service,” the spokeswoman said. “A national search is being conducted to fill the role.”

The appointment of Mr. Heyman to the top editorial job at Entertainment Weekly came as the publication cut its print edition from weekly to monthly and shifted much of its focus to its digital media and video. The change came two years after Meredith took ownership of Entertainment Weekly as part of its $2.8 billion purchase of its previous owner, Time Inc., which started the publication in 1990.

Mr. Heyman was previously the deputy editor of People magazine, where he worked for nearly 15 years. He did not immediately respond to requests for comment.

By: Ella Koeze·Source: Refinitiv

Propelled by progress on coronavirus vaccines and investor relief over the end of a noisy presidential election in the United States, markets posted one of their biggest rallies in years in November.

The S&P 500 notched a gain of 10.8 percent for the month, its best monthly showing since April and the fourth-best month for the index in 30 years.

On Monday, parts of the stock market sensitive to the shorter-term outlook for growth were a drag as the rapidly expanding Covid-19 pandemic continues to threaten economic activity like consumer spending and travel.

Airlines and energy companies were some of the worst performers. Retailers like Gap Inc. and the apparel branding company PVH Corp., which owns Calvin Klein and Tommy Hilfiger, also tumbled after a lackluster Black Friday, the traditional start to the holiday shopping season.

While analysts expect the upsurge in the virus to slow the economy over the next few months, they say the downturn should be short-lived.

“On the other side of this potential divot in economic activity, however, awaits what we believe will be a powerful cocktail of a vaccine, further fiscal stimulus, pent-up demand for services, and increased consumer confidence associated with a broad reopening of the global economy,” Jason DeSena Trennert of Strategas Research wrote in a client note on Monday.

The market’s performance over the last month has mirrored this widespread willingness among investors to mostly look past the current nationwide surge of Covid-19 cases. Pfizer, Astra-Zeneca and Moderna suggested in November that viable vaccines could be weeks or months away.

Such drug makers saw solid market gains in November. Pfizer was about 14 percent higher. Shares of Moderna — a far smaller company — more than doubled, rising 126 percent for the month, including 20 percent on Monday after the company said that it would ask regulators in Europe and the United States for emergency approval of its vaccine candidate.

Companies in industries such as travel and hospitality that have been battered by virus — and thus reliant on a vaccine to restore their fortunes — were some of November’s best performers.

Cruise lines and casino companies also rose during the month: Carnival climbed more than 40 percent and Wynn Resorts and MGM Resorts each rose more than 30 percent.

“There is considerable pent-up demand for travel, leisure activities and holidays in the developed world,” wrote analysts with Capital Economics in a note on Monday.

The Russell 2000 index of small capitalization stocks, which is more heavily reliant on the outlook for growth in American domestic economy, rallied more than 18 percent in November.

Analysts say the rally also reflects investor relief that the 2020 election season is all but over. Despite the wave of litigation launched by President Trump seeking overturn the results of the vote, it now appears that President-elect Joseph R. Biden Jr. is all but assured of be sworn in as president on Jan. 20.

Arizona, a swing state that flipped to the Democrat officially certified Mr. Biden’s narrow victory on Monday.

Mr. Biden’s early personnel announcements for economic policy posts have been largely well-received on Wall Street. On Monday, he officially announced his economic team, including Janet L. Yellen, the former Fed chair, as the first woman to lead the Treasury Department.

Credit…Robyn Beck/Agence France-Presse — Getty Images

The stock market’s rally in November — the S&P 500 rose 10.8 percent — came as several drugmakers touted their progress in developing a coronavirus vaccine.

Investors in one of them, Cambridge, Mass.-based Moderna, reaped even bigger gains. The stock gained 126 percent in November, and surged 20 percent on Monday after the company said would apply to the Food and Drug Administration to authorize its coronavirus vaccine for emergency use. The first injections may occur as early as Dec. 21 if the process goes smoothly and approval is granted, Moderna’s chief executive said in an interview.

Moderna’s gains have far outpaced those of other vaccine developers, in part because it is a far smaller company, and in part because the announcement could help it generate actual profits for the first time. Since the company went public in December 2018, it has never posted a quarterly profit.

Still, even after a sevenfold increase in its market value this year, Moderna is worth about $60 billion; fellow vaccine-developer Pfizer’s value is more than $200 billion. For its part, Pfizer was up about 14 percent this month, while U.S.-listed depository shares of BioNTech, the smaller German firm with which Pfizer collaborated in its vaccine effort, was up more than 45 percent.

The U.S.-listed shares of Britain’s AstraZeneca, which also has a promising candidate in development, were up more than 5 percent in November.

Credit…Brittainy Newman/The New York Times

Salesforce is in talks to acquire Slack in a deal that could be announced as soon as Tuesday, according to people with knowledge of the matter who weren’t authorized to talk about the takeover publicly.

The potential deal is a bet on remote working, an area that bankers believe will be a hot spot for consolidation in the months ahead, as highly valued software companies look to roll up the fragmented market for collaboration tools.

The premise behind such moves is that work practices may never return to pre-pandemic norms, so Salesforce and others are hoping to cash in on the shift by assembling a suite of services to make remote working easier.

Software companies are riding high on surging stock prices, sitting on large cash piles and able to tap more capital easily if they need to. In addition to Salesforce, potential buyers include Adobe (which bought Workfront earlier this month), Twilio (purchaser of Segment and Sendgrid) and ServiceNow. Potential targets include Airtable, Asana, Box, DocuSign, Dropbox and Smartsheet. These deals won’t be cheap, but as the shares of buyers rise in tandem with targets, that may simply mean more stock-for-stock deals.

Slack has recorded somewhat muted growth in its share price compared with rivals, but it’s not a minor purchase: the messaging firm had a market capitalization of about $17 billion before The Wall Street Journal first reported the talks with Salesforce last week, and is now worth around $23 billion.

Representatives for Slack and Salesforce didn’t respond to requests for comment on Monday. Reached last week, Marc Benioff, Salesforce’s chief executive, had declined to comment.

Looming large in the work-from-home market is Microsoft. Its Office software is already installed on many workplace computers, which makes it easy to integrate its Slack-like collaboration tool, Teams. (Slack contends in an antitrust suit against Microsoft in Europe that its bundling of Teams with Office is anticompetitive.) Microsoft has been acquisitive throughout the pandemic, trying to scoop up TikTok and announcing a deal to buy the gaming company Zenimax Media.

It may face more regulatory scrutiny than rivals, but it can certainly afford plenty more purchases. Microsoft is sitting on roughly $136 billion in cash and it is one of the few companies with a AAA credit rating.

Erin Griffith contributed reporting.

Credit…John G Mabanglo/EPA, via Shutterstock

DoorDash is setting its sights high for its stock market debut.

The food-delivery company said on Monday that it hopes to raise up to $2.8 billion from its initial public offering, in a sale that could value the company at as much as $31.6 billion, including all shares and options. It has set a price range of $75 to $85 a share for the I.P.O.

The fund-raising goal, disclosed in the food-delivery company’s latest I.P.O. prospectus, signals the company’s ambitions as it begins pitching prospective investors. It was valued at $16 billion in a private fund-raising round in June.

The company is hoping that investors will overlook losses and a thicket of potentially costly labor regulations and clamor for a piece of a fast-growing gig-economy giant.

DoorDash expects to price its offering in the next few weeks — making it one of the last companies to go public in 2020 — and will trade on the New York Stock under the ticker symbol “DASH.”

Monday’s prospectus also shed more light on how much control DoorDash’s founders — and in particular Tony Xu, its chief executive — will hold even after the company goes public, thanks to their holdings of a special class of stock, a common feature in Silicon Valley corporate governance.

Mr. Xu, Andy Fang and Stanley Tang will control shares that give them at least 69 percent of voting power at the company. Moreover, Mr. Xu has the right to vote the shares held by his co-founders.

  • Analysts at Morgan Stanley estimate that retailers’ overall Black Friday sales fell 20 percent from last year, based on early reports of drops in store foot traffic and increases in online sales. Consumers spent $9 billion online on Friday, a 21.6 increase from last year and the second-biggest figure for online retailers ever, according to Adobe Analytics, which scans 80 percent of online transactions across the top 100 U.S. web retailers. The firm said online sales rose to $23.5 billion in the four-day Thanksgiving-to-Sunday period, up 23 percent from last year.

  • The head of the Tokyo Stock Exchange resigned on Monday, nearly two months after a technical glitch at the exchange shut down equities trading across Japan in a major if temporary disruption to the financial markets in the world’s third largest economy. The decision by the exchange’s president and chief executive, Koichiro Miyahara, followed an announcement earlier in the day by Japan’s financial regulator that it had issued a business improvement order to the exchange and its parent company, the Japan Exchange Group.

  • Ajit V. Pai, the Republican chairman of the Federal Communications Commission, said Monday that he would leave his post the day that President-elect Joseph R. Biden Jr. is sworn in, capping a tenure of sweeping deregulation across the telecommunications industry. Mr. Pai’s most prominent effort was rolling back net neutrality rules that forbid internet providers from blocking content, slowing down its delivery or charging for higher priority on their networks.

  • S&P Global, the owner of stock indexes like the Dow and the S&P 500, said on Monday that it plans to acquire IHS Markit for $44 billion, including debt. The transaction would create a financial information powerhouse at a time when data increasingly fuels automated trading. The all-stock deal — the biggest announced so far this year — would give S&P Global control of IHS Markit, whose software is used by many of the world’s biggest financial institutions.

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