Before The Bell
A new day will shortly get under way on Wall Street and one in which we will get, some 30 minutes after the opening bell, a key reading on the services sector in which the Institute for Supply Management is expected to show further growth in non-manufacturing activity in November, only at a lesser rate in October. As to the early Thursday stock market, and following yesterday's uneven performance and some choppy trading last evening, the early indicators point to a mixed opening when trading resumes shortly.
Meanwhile, the up-and-down first week of December continued on Wall Street yesterday morning with early losses in the major equity indexes, including a slightly more-than 200-point deficit in the Dow Jones Industrial Average. But this early decline gradually gave way, and at the conclusion of trading the blue chip index had managed to nudge nominally into the green with a concluding gain of 60 points. The broader-based S&P 500 Index also edged nominally into the plus column, while the NASDAQ held fast to a small closing loss.
Lifting the stock market once more was optimism of the COVID-19 vaccine front, where three drug concerns are well along on the process of getting their coronavirus candidates through the approval process. Indeed, the United Kingdom already has become the first country to approve a vaccine for emergency use, developed by Pfizer (PFE) and a Germany-based partner. Other such approvals are expected to follow.
Meantime, in other news, and likely contributing to the early drop in the stock market, was news that payrolls services giant Automatic Data Processing's (ADP) private sector employment report missed its estimate ahead of tomorrow's key non-farm payroll issuance. It should be noted that the two jobs reports do not always correlate. Also of note, the Federal Reserve issued its Beige Book economic summation in which it noted that several Fed Districts were beginning to see slowing growth, although in general, the nation's economy was growing modestly to moderately. In other factors, the late upturn was helped by resurfacing optimism on a new fiscal relief bill.
In addition to the above, Federal Reserve Chair Jerome Powell in prepared remarks before the Congress said that in the medium term, that the news on the vaccine front was supportive, but the surge in COVID-19 cases of some 200,000 a day (not even calculating the post-Thanksgiving aftermath toll) is very worrisome for the next few months as are the record hospitalizations and deaths reported yesterday.
Finally, the Street now will await news on the stimulus front and on the vaccine approval process.
– Harvey S. Katz, CFA
At the time of this article's writing, the author had positions in PFE.
