Republican Senate Majority Leader Mitch McConnell on Dec. 8, in Washington, DC.
Kevin Dietsch-Pool/Getty ImagesIt’s all about government stimulus.
Senate Majority Leader Mitch McConnell is wavering in his support of a second Covid-19 relief package worth about $900 billion and the market doesn’t like it.
S&P 500 and Dow Jones Industrial Average as well as the Nasdaq Composite futures are all off about 0.8% Friday morning. There seems to be little differentiation between tech and all other stocks. It’s just a risk-off day for investors.
The sticking point for Republicans appears to be additional protections for businesses operating during the pandemic. Democrats, for their part, want aid for states and local governments, something McConnell has opposed.
Friday’s trading action highlights again how coronavirus, and the government’s response, looms over markets in 2020. And that won’t change soon because the virus isn’t going away anytime soon.
New U.S. Covid-19 cases have averaged more than 205,000 a day over the past week, up more than 30% from the weekly average prevailing before the U.S. Thanksgiving holiday.
Without additional stimulus to bridge the gap between now and mass inoculation, investors, it seems, could be in for a long winter.
—Al Root
*** Nominations are now open for the 2021 Most Influential Women in U.S. Finance list. Submit a nomination here by Dec. 31.
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FDA Advisory Panel Clears the Way for Pfizer Vaccine Authorization
A panel of outside advisors to the U.S. Food and Drug Administration voted 17 to 4 to recommend authorizing the Pfizer / BioNTech shots as America’s first vaccine against Covid, with one abstention.
- Debate concerned whether conclusions about the vaccine’s long-term safety and effectiveness might be compromised if Pfizer now gives shots to those who had gotten a placebo in the trial. Some panelists weren’t persuaded that the study supplied enough evidence to support giving the shots to teenagers.
- The FDA’s reviewers have already said they’re convinced of the vaccine’s safety and efficacy, so an emergency use authorization will quickly ensue.
- Pfizer and the federal government’s Operation Warp Speed have already distributed doses, so vaccination can begin shortly after FDA authorization.
What’s Next: The vote is the final step needed before the FDA makes its approval decision, which could happen as soon as Friday. Next week, the FDA’s advisors will discuss the vaccine from Moderna, whose clinical trial provided similarly good results.
—Bill Alpert
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First Covid Vaccine Setbacks in Europe Ahead of Mass Inoculation Campaigns
Sanofi and GlaxoSmithKline, the French and British pharmaceuticals groups, said Friday that they would delay the launch of their joint coronavirus vaccine until the end of 2021 after the first trials showed an insufficient response in older patients.
- The two companies’ chief executives said in a joint release that they were “disappointed” at the result but insisted they were “confident and committed” that they would be able to submit it to regulators in the second half of 2021.
- The European Union had ordered 300 million doses of the vaccine (about a fifth of the total orders it has already signed with developing companies) and the U.K. 60 million.
- CSL, the Australian biotech company, also said Friday that the vaccine it is developing with the University of Queensland would not move to Phase 2 trials as planned, because some participants in the initial stage were shown as HIV positive even though they were not infected with the AIDS-related virus.
- Britain’s AstraZeneca said Friday it would investigate whether the vaccine it is currently developing with Oxford University could possibly be combined with Russia’s Sputnik V vaccine in order to boost its efficacy.
What’s Next: European governments will soon embark on vaccination campaigns, once the EU drugs regulator approves the BioNTech/Pfizer vaccine later this year. Government health officials note that setbacks should be expected considering the emergency nature of the vaccines’ development, approval and rollout.
—Pierre Briançon
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Disney Outlines Its Streaming Future
Walt Disney said at its investor day that Disney+ has hit its original subscriber goal—a few years in advance.
- Disney+ had 86.8 million subscribers as of Dec. 2, Walt Disney’s direct-to-consumer segment chief Rebecca Campbell told investors Thursday. Hulu had 38.8 million subscribers, while ESPN+ had 11.5 million.
- In April 2019, the company forecast it would have 60 to 90 million Disney+ subscribers by 2024, along with 40 million to 60 million on Hulu, and 8 million to 12 million on ESPN+.
- Disney management now expects those services to have up to 350 million subscribers combined in four years, when the company could be spending $16 billion a year just on content for its streaming services.
- The pandemic kept viewers at home, while hits like The Mandalorian kept them entertained. The company plans to release a spate of new series and films, including 10 Marvel series, 10 Star Wars series, and 30 Disney and Pixar series and films.
What’s Next: The company now expects 230 million to 260 million paid Disney+ subscribers by the end of 2024. The monthly price in the U.S. will rise to $7.99 in March.
—Connor Smith
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States Weigh In on Texas Bid to Overthrow Election as Biden Names More Top Picks
A long-shot effort to overthrow the presidential election results in four battleground states is heating up, even as President-elect Joe Biden picked more Obama-era officials to join his incoming administration.
- Texas Attorney General Ken Paxton is seeking an emergency order to block the 62 electoral votes from Georgia, Michigan, Pennsylvania, and Wisconsin, calling them “unlawful and constitutionally tainted.” More than 100 Congressional Republicans signed a court filing supporting the bid, and 17 states filed a brief in favor of it.
- Four battleground states appealed to the Supreme Court Thursday to not take up the request by Texas to have their election results overthrown, calling it a “seditious abuse of the judicial process.” The Supreme Court could respond to the Texas request between now and Monday when the Electoral College meets.
- Biden has named Susan Rice, a former U.S. Ambassador to the United Nations and national security adviser under President Barack Obama, to lead the White House’s Domestic Policy Council, which is responsible for coordinating federal agencies and overseeing priorities on health care, energy, and other issues.
- He is also nominating Denis McDonough, the former White House chief of staff under Obama, to lead the Department of Veterans Affairs. If confirmed, McDonough, who is not a veteran, would head the 400,000-employee organization, which oversees health care, pensions, and burials for former service members.
What’s Next: Meanwhile, Senate Republicans and Democrats remain at odds over another round of stimulus, which took on new importance when 853,000 Americans filed for initial unemployment benefits last week—the most in three months.
—Anita Hamilton
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Airbnb Is Worth More Than $100 Billion After Its IPO
Shares of Airbnb soared nearly 143% in its first day as a public company.
- Trading under the ticker symbol ABNB began at $146 a share Thursday, more than twice its IPO price of $68. The stock hit a high of $165, before closing at $144 for a market capitalization of just over $100 billion.
- The company raised $3.5 billion, making it the third largest offering this year, according to Dealogic. Airbnb is now worth more than the hotel chains Marriott, Hilton, and Hyatt combined.
- After initially being hit hard by the pandemic, Airbnb shifted its strategy to longer-term residential listings in April. Business rebounded as guests took trips closer to home and stays lengthened to more than just a few days. In the quarter ended Sept. 30, Airbnb had a profit of $219 million.
- Airbnb has performed better than other traditional accommodations partly because its model is ideal for social distancing, Jared Shojaian, director and senior analyst, gaming & lodging, at Wolfe Research wrote in a note.
What’s Next: Shojaian expects Airbnb to continue to gain new customers and grow their market share, which could stick in a post-Covid world.
—Luisa Beltran and Anita Hamilton
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Do you remember this week’s news? Take our quiz below and tell us how you did by emailing thebarronsdaily@barrons.com.
1. On Tuesday, Tesla CEO Elon Musk announced at a conference hosted by The Wall Street Journal that he had moved from California to Texas. Where in the Lone Star state is he now based?
a. Near Austin
b. Near Dallas
c. Near Amarillo
d. Near Houston
2. Which singer-songwriter made waves this week for selling his catalog to Universal Music in a $300 million deal?
a. Elton John
b. Van Morrison
c. Bob Dylan
d. Jackson Browne
3. Apple on Tuesday unveiled new over-the-ear headphones called AirPods Max. They’ll cost $549 and will launch on Dec. 15. Which of the following aren’t a feature of the new headphones?
a. A carrying purse
b. Noise-cancellation
c. Transparency mode to let you hear noises around you
d. A 3.5mm headphone jack
4. Pop star Taylor Swift tweeted Thursday that she plans to release a “sister record” to her July 2020 album release, “Folklore,” at midnight Friday. What is the new album called?
a. Paramour
b. Everlasting
c. Speechless
d. Evermore
5. Airbnb entered its first day of public trading on Thursday—but skipped ringing the Nasdaq bell. How did the company mark the occasion instead?
a. With a special Airbnb bell-ringing playlist on Spotify
b. With a video of different Airbnb hosts ringing doorbells
c. With a live concert special broadcast online
d. With a socially-distanced flash mob performance on Wall Street
Answers: 1(a); 2(c); 3(d); 4(d); 5(b)
—Zoe Szathmary
***
—Newsletter edited by Anita Hamilton, Stacy Ozol, Mary Romano, Matt Bemer, Ben Levisohn
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