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End of Day Briefing - Recap of Tuesday Jan. 26, 2021

Stocks end slightly lower as the market takes a breather in mixed session

The major averages closed slightly lower as investors continue to monitor the virus and its mutations, the uneven pace of vaccine rollouts across the states and concern that the U.S. stimulus package may not happen until mid-March, while also reacting to earnings reports that are picking up in pace and volume. After four members of the Dow Jones Industrial Average reported before the opening bell, Microsoft ($MSFT), Starbucks ($SBUX) and AMD ($AMD) are among the earnings reporting headliners this afternoon.

ECONOMIC EVENTS: In the U.S., the FHFA home price index rose 1.0% to another new record peak of 310.1 in November. The S&P Case Shiller 20-city home price index increased 1.1% to 238.5 in November. The Conference Board Consumer Confidence Index improved moderately in January to a reading of 89.3, up from a four-month low of 87.1 in December. The Richmond Fed manufacturing index dropped 5 points to 14 in January.

Meanwhile, CNBC reported that Democratic lawmakers introduced legislation to raise the federal minimum wage to $15 per hour by 2025.

TOP NEWS: Four Dow members reported before today's open, including 3M ($MMM), Johnson & Johnson ($JNJ), American Express ($AXP) and Verizon ($VZ). Following their earnings report, the quartet was split in terms of stock performance, with 3M up 3.3%, J&J rising 2.7%, AmEx down 4.1% and Verizon sliding 3.2%.

In other earnings news, former Dow constituent General Electric ($GE) rose 2.7% following its Q4 report and FY21 guidance.

In COVID-19 news, Regeneron ($REGN) announced what it called "positive initial results" from an ongoing Phase 3 clinical trial evaluating REGEN-COV used as a passive vaccine for the prevention of COVID-19 in people at high risk of infection due to household exposure to a COVID-19 patient. Passive vaccination with REGEN-COV resulted in 100% prevention of symptomatic infection and approximately 50% lower overall rates of infection, the company said.

Meanwhile, GameStop ($GME) shares continued to surge, jumping over 92% to $147.98 after Social Capital chairman Chamath Palihapitiya disclosed on Twitter that he bought February $115 calls. Amid the rally, Citron's Andrew Left told Reuters that he is still short on the stock. "If I had never been involved in GameStop and came to this right now, would I still be short this stock? 100 percent. This is an old school, failing mall-based video retailer and investors can't change the perception of that," Left told Reuters.

Additionally, shares of Geo Group ($GEO) and CoreCivic ($CXW) fell a respective 7.7% and 6% after Reuters reported that President Joe Biden plans to restrict the U.S. government's use of private prisons.

MAJOR MOVERS: Among the noteworthy gainers was Vir Biotechnology ($VIR), which rose more than 74% after it announced initial topline data from its ongoing trial of VIR-3434 in patients with chronic hepatitis B virus infection. Also higher was Beyond Meat ($BYND), which gained 17.7% after establishing a joint venture with PepsiCo ($PEP). PepsiCo shares were 1.2% higher after the news.

Among the notable losers was Vaxart ($VXRT), which declined 6.7% after announcing additional preclinical COVID-19 oral vaccine data. Also lower was Lockheed Martin ($LMT), which fell 3.8% after reporting quarterly results.


Reviewing Tuesday's economic data:

  • The Conference Board's Consumer Confidence Index increased to 89.3 in January (Briefing.com consensus 89.0) from a downwardly revised 87.1 (from 88.6) in December.
    • The key takeaway from the report is that the optimism about the short-term outlook outweighed a weakening view about current business and labor market conditions.
  • The S&P Case-Shiller Home Price Index increased 9.1% in November (Briefing.com consensus 9.0%) following an upwardly revised 8.0% reading in October (from +7.9%).
  • The FHFA Housing Price Index increased 1.0% in November.

  • Russell 2000 +8.9% YTD
  • Nasdaq Composite +5.7% YTD
  • S&P 500 +2.5% YTD
  • Dow Jones Industrial Average +1.1% YTD

Market Snapshot
Dow30937.04-22.96(-0.07%)
Nasdaq13626.07-9.93(-0.07%)
SP 5003849.62-5.74(-0.15%)
10-yr Note -1/321.042
NYSEAdv 1283 Dec 1852 Vol 1.1 bln
NasdaqAdv 1436 Dec 2381 Vol 6.6 bln

Industry Watch
Strong: Communication Services, Real Estate, Consumer Staples
Weak: Materials, Financials, Utilities, Industrials, Energy

Moving the Market

-- Market takes a breather in mixed and tight-ranged session

-- Earnings reports were mostly better than expected


Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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