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End of Day Briefing - Recap of Tuesday Dec. 1, 2020

Stocks start off December with gains after strong November

The major averages picked back up on November's strength after a slight pullback yesterday to close out a month that was still incredibly strong in terms of the market's advance. December is off on the right foot with the major averages moving up across the board in the first day of the month.

ECONOMIC EVENTS: In the U.S., Markit's manufacturing index was unchanged at 56.7 in the final November print versus the preliminary reading. The ISM manufacturing index slid 1.8 points to 57.5 in November, as expected. Construction spending jumped 1.3% in October, which was stronger than expected.

In prepared remarks for the Senate Committee on Banking, Housing, and Urban Affairs, Federal Reserve Chair Jay Powell said: "Economic activity has continued to recover from its depressed second-quarter level. The reopening of the economy led to a rapid rebound in activity, and real gross domestic product, or GDP, rose at an annual rate of 33 percent in the third quarter. In recent months, however, the pace of improvement has moderated... Recent news on the vaccine front is very positive for the medium term. For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficacy across different groups."

In COVID-19 news, Reuters reported that a partisan group of U.S. lawmakers put forward a $908B COVID-19 aid package aimed to breaking a months-long deadlock between Democrats and Republicans over new emergency relief for small businesses, unemployed people, airlines, and other industries during the coronavirus crisis.

TOP NEWS: Shares of Zoom Video ($ZM) fell over 15% despite the company reporting Q3 results and Q4 guidance that Piper Sandler analyst James Fish described as "strong against Street expectations." The share weakness may be related to higher investor expectations, the upside being primarily driven from commercial, and an elevated valuation, Fish contends. While Zoom Video reported "very strong" Q3 results last night on an absolute basis, William Blair analyst Bhavan Suri estimates that buy-side expectations for revenue were in the ballpark of $800M, compared to the company's performance of roughly $777M.

Micron Technology ($MU) rose 4.7% after the company increased its outlook for fiscal Q1, which ends on December 3, ahead of CEO Sanjay Mehrotra's presentation today at the Credit Suisse Annual Technology Conference. During the event, Mehrotra said the company has seen strength "pretty much across the board" and added that he thinks the need for more memory and storage will broaden post-pandemic.

In other guidance news, UnitedHealth ($UNH) raised its FY20 adjusted EPS view to approach $16.75, from $16.50-$16.75, as the insurer issued an updated 2020 outlook and its initial view of 2021 ahead of its annual Investor Conference with analysts and institutional investors taking place virtually today.

Additionally, Thermo Fisher ($TMO) shares closed 1.3% higher after the company increased its fiscal 2020 adjusted earnings per share guidance.

In other news, Reuters reported that Tesla ($TSLA) CEO Elon Musk said he was open to discussing a tie-up of his company with a rival car maker. "We are definitely not going to launch a hostile takeover. If somebody said it would be a good idea to merge with Tesla, we would have this conversation," Musk was quoted as having said at an Axel Springer event in Berlin.

Meanwhile, Reuters also reported that Airbnb ($ABNB) is seeking a valuation of up to $34.8B in its initial public offering. In a filing, the company established a target price range of $44-$50 apiece to sell 51.9M shares, which would bring in $2.6B at the high end of the range.

MAJOR MOVERS: Among the noteworthy gainers was BlackBerry ($BB), which jumped more than 19% after the company and Amazon Web Services ($AMZN) announced a deal to develop BlackBerry's Intelligent Vehicle Data platform. Also higher was Virgin Galactic ($SPCE), which rose 6.5% after it was awarded a NASA base contract for flight and integration services.

Among the notable losers was Nikola ($NKLA), which declined 14.9%, adding to yesterday's losses after Deutsche Bank analyst Emmanuel Rosner said he views the revised General Motors ($GM) partnership as "particularly negative" for Nikola shares. Also lower was Momo ($MOMO), which fell about 5.6% after reporting quarterly results.


  • Nasdaq Composite +37.7% YTD
  • S&P 500 +13.4% YTD
  • Russell 2000 +10.1% YTD
  • Dow Jones Industrial Average +4.5% YTD

Market Snapshot
Dow29823.86+185.28(0.63%)
Nasdaq12355.02+156.37(1.28%)
SP 5003662.47+40.82(1.13%)
10-yr Note -30/320.924
NYSEAdv 2167 Dec 920 Vol 1.1 bln
NasdaqAdv 2064 Dec 1516 Vol 6.4 bln

Industry Watch
Strong: Financials, Communication Services, Information Technology
Weak: Industrials

Moving the Market

-- S&P 500 and Nasdaq close at fresh record highs

-- Bullish momentum, recovery optimism

-- 2s-10s yield curve spread widens to 2020 high of 76 basis points


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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