The Weekly Rundown

Market Data

HEADLINES

Pfizer will apply for U.S approval of its vaccine in the third week of November, if it receives positive trial results. Pfizer has said it can produce 100 million doses this year and 1.3 billion next year, with the U.S signed for 600 million, the U.K for 30 million, and the EU negotiating for 200 million.
Sadiq Khan announced Tier 2 restrictions for London, including a ban on indoor socialising.
French President Macron announced that 9 French cities, including Paris, will go under a 9 pm-6 am curfew from Saturday. Germany reported a record number of infections on Thursday and Portugal declared a state of emergency.
Boris Johnson said that the UK will leave the EU on December 31 without a trade agreement, unless there was a “fundamental” change in the EU’s negotiation stance. Michel Barnier responded by saying “we will do everything we can, but not at any price” to reach a deal. The Food and Drink Federation warned of 18% tariffs for food and drink in a no-deal scenario that would harm consumers considerably.
Treasury Secretary Steven Mnuchin stated that the Democrats remain “far apart” over certain issues of a deal for another stimulus package casting doubt that there will not be another stimulus package before the November 3 poll.
Stanford Professors Paul Milgrom and Robert Wilson were awarded the Nobel Prize for Economics for work on auction theory and the design of new auction formats.

ECONOMY & CENTRAL BANKS

On Monday, BoE wrote to banks requesting information on their ‘readiness to deal with’ negative interest rates.
In its Autumn forecast, EY predicted that the UK economy will not return to 2019 Q4 levels until mid-2023, with a ‘bare-bones FTA’ and widespread vaccine distribution by mid-2021, amongst the assumptions.
On Thursday, the Chinese government issued new dollar bonds, valued at $6 billion dollars to U.S. investors. This was met by huge demand, with orders exceeding $27 billion, most of which from U.S. institutional investors.
Moody’s downgraded the Uk’s credit status from Aa3 to Aa2 due to coronavirus spending and Brexit risks.
In its 2020 financial stability report, Germany’s Bundesbank predicted that there will be 6,000 business insolvencies in Q1 2021, compared to 4,700 in all of 2020, owing to a build-up caused by the suspension of bankruptcy-declaration requirements. This has raised fears that banks may then reduce lending to meet capital-ratio requirements, thereby weakening the economic recovery.

FINANCE SECTOR AND BANKS

JP Morgan and Citi Group both more than doubled their profits in Q3 compared to Q2. This was mainly due to lower provisions for loan losses and increased trading profits. JP Morgan shares ended the week up 0.4%, while Citi was down 4.2%.
Goldman Sachs’s transformation to rely less on financial-market revenue and more on retail banking and asset management has paid off considerably in Q3, its most profitable quarter since 2010. Goldman’s consumer division reached $1 billion in trailing 12-month revenue (within 4 years of its launch). Asset management revenue is up 71% year-on-year. Goldman shares ended the week down 0.6%

TECH

Justice and State Department prosecutors may be considering forcing Google to sell its Chrome web browser, as part of an antitrust investigation.
On Wednesday, France and the Netherlands strongly agreed that there should be further regulation against tech giants so that smaller European businesses can grow and thrive. The Digital minister of France said that the option of breaking up these larger tech giants is “on the table”.
Apple announced the release of its 5G-enabled iPhone 12 range. It included a $699 5.4 inch iPhone 12 ‘mini’. Apple shares ended the week down 0.9%

COMPANIES

Delta Airlines predicted that Q4 cash burn will be reduced to $10m/day, down from $25m/day in Q3 and $100m/day in March. The CEO even predicted that cash flow may turn positive by Spring 2021.
Eli Lilly said Tuesday afternoon that it would halt its trial of a coronavirus antibody treatment, news that followed Johnson & Johnson’s earlier announcement that it stopped its vaccine trial after an “adverse event” was reported.
Energy stocks joined a rally in oil, with Concho resources soaring 10% on news that ConocoPhillips is in talks to acquire the company.

Published by The Sweeney Club