Market Rallies After Worst Week for Dow and S&P 500 Since March

The S&P futures were pushing higher this morning despite a number of headwinds rattling investor confidence. Investors are buyers again. However, COVID continues to wreak havoc across the United States and most of Europe. Johns Hopkins University reported that new U.S. cases are on the verge of hitting 100,000 per day. That has set off expectations for new shutdowns across the nation.

Let’s take a look at the numbers from Friday before we get into the headlines driving the futures market. 

The Rundown: Today’s Top Market Stories 

  • Oil prices continue to slump due to rising COVID cases, economic jitters, and the latest lockdowns across Europe. WTI crude oil prices fell 2.4% to dip under $35. Meanwhile, Brent crude prices fell 2.8% to tick under $37.50.
  • There has been some positive news on the global economy. Japan’s export numbers increased for the first time in two years, while China’s manufacturing sector picked up at a rapid pace last month. However, investors are very concerned about increasing supply from OPEC at a time that demand is slumping around the globe.
  • Finally, we have an election tomorrow. I’m soooooo excited. Heading into the final day, Joe Biden reportedly has a double-digit lead in the polls nationally. However, the vote will once again come down to battleground states like Florida, Pennsylvania, Ohio, and Minnesota. 

COVID-19 Updates

This morning, the key COVID story driving the market is happening across Europe.

European nations are shutting down at a breakneck pace right now after cases have doubled in the last five weeks. Germany has announced a partial shutdown that will shutter bars, restaurants, gyms, and theatres. German Chancellor cited the tripling of patients entering intensive care for the reasoning behind the two-week shutdown. The United Kingdom, which has seen more than 20,000 cases a day, will enter its own lockdown on Thursday. So too will Italy. Cases in Europe now have economists worried about a double-dip recession in the world’s largest economic bloc.  

Today’s Top Stocks to Watch: CBL, CLX, DNKN, CAT, BIP

CBL: Mall owner CBL & Associates (CBL) has filed for Chapter 11 bankruptcy protection. The big question in the dying brick-and-mortar industry is who will be next. CBL said in August that it would enter a new restructuring plan or try to raise another $150 million. However, the Tennessee-based mall operator has struggled to due to non-paying tenants and other bankruptcies by companies like JC Penney. The news comes just a few days after Pennsylvania Real Estate Investment Trust, the largest mall owner in Philadelphia, filed for Chapter 11.

CLX: Clorox (CLX) shares jumped 2.3% after the household products company reported strong quarterly earnings. The firm reported earnings per share of $3.22, a figure that easily beat expectations of $2.32. The firm also shattered revenue forecasts and raised its full-year sales guidance. The company said that it has benefited from more Americans purchasing home cleaning supplies in 2020 to protect against COVID.

DNKN: Dunkin’ Brands will go private. The company has announced a deal to sell itself for $106.50 per share to Arby’s owner, Inspire Brands. That price brings a total price tag of roughly $8.8 billion in cash. This is the largest restaurant purchase since Tim Hortons sold itself to Restaurant Brands (QSR) back in 2014.

CAT, BIP: Pay close attention to infrastructure stocks like Brookfield Infrastructure Partners (BIP) and construction manufacturers like Caterpillar (CAT). Speculators are saying, regardless of tomorrow’s victor, the U.S. will see a wave of infrastructure spending in the next few years. Speaker Nancy Pelosi hinted that the U.S. might throw trillions of dollars at infrastructure programs if Joe Biden wins. Goldman Sachs said in a note to investors on October 19 that it anticipates a significant amount of money pouring into the industry.

– G –