Wall Street Records a Strong Week as Stimulus takes Shape
December 21 2020 - Team Stockal
Stock markets in the United States had a good week, with Wall Street’s major indexes recording gains for the week ended on December 18, 2020. The Dow (DJI) was up 0.4%, while the S&P 500 (GSPC) and the Nasdaq (IXIC) rose 1.3% and 3.1%, respectively. Developments around a U.S. stimulus package had kept investors guessing throughout the period, while the inclusion of Tesla (TSLA) in the S&P 500 from December 21, 2020, saw huge volumes on the stock and buying among exchange-traded funds too.
In fact, as per this report, passive funds tracking the S&P 500 are estimated to buy more than $85 billion of Tesla shares while selling $85 billion of the rest of the index to make room for it.
Meanwhile, over the weekend, the U.S. Congress reached a deal on a $900 billion coronavirus relief package. The bill ensures federal assistance to households, small businesses, and healthcare providers.
Top Stories This Week
Fedex’s profits nearly double
FedEx (FDX) reported a near-double, stellar quarterly profit as rate hikes, higher volumes boosted the company’s results. Fiscal second-quarter adjusted net income at FedEx jumped to $1.30 billion, or $4.83 per share, from $660 million, or $2.51 per share, a year earlier. Revenue grew 19% to $20.6 billion.
The stellar results come at a time when Fedex and other companies alike have raised prices, added several surcharges to cope with the surge in volumes due to the pandemic. Average daily package volume jumped 29% to 12.3 million during the quarter ended Nov. 30. Revenue per package increased 7% to $9.42.
Big Tech in focus: Texas, nine states sue Google
Legal pressure is mounting on Big Tech companies in the United States, with Texas and nine other states suing Google (Alphabet Inc) [GOOG] for teaming up with Facebook Inc (FB) to work in an unlawful manner that violated antitrust laws in a bid to boost its online advertising business. Shares of the company fell around a percent on Friday. The stock has been on a decline following the antitrust probe on the company and clouded prospects for other tech giants. For December so far, it has shed nearly 4% with nearly 2% of those losses coming in the past five sessions.
The lawsuit marks the second major complaint from regulators against Google apart from several federal and state lawsuits that have looked to rein in alleged bad behaviour by Big Tech platforms that have reportedly increased significantly in the past two decades.
Wish shares fall on debut
Shopping app Wish’s parent company ContextLogic (WISH) witnessed a lackluster debut last week, falling more than 5%, after raising $1.1 billion through its IPO.
The company’s weak debut comes at a time where mega IPOs from DoorDash (DASH) and Airbnb (ABNB) had an impressive start to their market journey. Airbnb’s shares doubled on debut, while DoorDash jumped about 80%.
Eli Lilly makes a gene therapy bet with Prevail Therapeutics buy
Drugmaker Eli Lilly and Co (LLY) would spend about $1 billion to buy Prevail Therapeutics Inc (PRVL) to boost presence in gene therapy, which is generally used to develop treatments for neurodegenerative diseases such as Parkinson’s.
The drugmaker has placed a big bet on the gene therapy market. It has emerged as one of the hottest areas of drug research, with Novartis’ (NVS) Zolgensma, gene therapy for a rare muscular disorder, leading the way to be the world’s most-expensive one-time treatment with a price of $2.1 million-per-patient.
Coca-Cola to slash 2,200 jobs globally
Beverage maker Coca-Cola Co (KO) said it will cut 2,200 jobs globally, including 1,200 in the United States, due to the fallout from the COVID-19 pandemic.
The company has embarked upon a cost-cutting spree to combat the pandemic. Prior to the job cuts, it offered voluntary separation packages to 4,000 workers in the U.S., Canada, and Puerto Rico.