Stocks were higher to start Wednesday with the Dow adding 73 points, or 0.2%. The S&P 500 gained 0.5%, while the Nasdaq traded 0.9% higher.
The U.S. reported a new record for average daily coronavirus cases, with the average of new cases rising to 121,153 on Tuesday – up 33% from a week ago. Texas’s COVID-19 cases have risen to more than 1 million, as the nation’s second most-populous state contends with one of the worst outbreaks, while New York City’s mayor said the city has one “last chance” to halt a second wave of the virus as it approaches a threshold that would force it to shutdown schools. Ohio has seen an “unprecedented spike” in COVID-19 hospital admissions, while Tulsa, Oklahoma has filled all of its ICU beds. “What America has to understand is that we are about to enter COVID hell,” said Dr. Michael Osterholm, director of the Center of Infectious Disease Research and Policy at the University of Minnesota. “It is happening. We have not even come close to the peak and, as such, our hospitals are now being overrun. The next three to four months are going to be, by far, the darkest of the pandemic.” Osterholm added, “The upcoming holidays of Thanksgiving, Diwali, Christmas, Hanukkah and New Year’s create the potential for innumerable super-spreading events across the country. This has the potential to introduce and reintroduce the virus to new areas and to further exacerbate community transmission.”
Even with Pfizer and BioNTech’s good vaccine news this week, Federal Reserve Bank of Boston president Eric Rosengren warned that next six months will remain turbulent for the global economy as the world continues to grapple with the effects of the coronavirus pandemic. “While it’s very good news about the vaccine, and the effectiveness of the vaccine looks to be much higher than people anticipated, it’s still going to be quite difficult to distribute it widely and there’s still an open question of how many people will voluntarily get vaccinated,” Rosengren said. “So while it’s certainly good news, and my own forecast for the second half of the year (2021) would assume that it would be widely enough distributed at that point, that we should have very robust growth, given the fiscal and monetary policy we have right now; I think the next six months are going to continue to be pretty choppy.”
Republicans have escalated their efforts to challenge Joe Biden’s victory in the presidential election. President Donald Trump’s reelection campaign filed a federal lawsuit today in Michigan that seeks to stop the state’s top election official from certifying Biden’s win in the state, and has filed a similar suit in Pennsylvania, which Secretary of State Kathryn Boockvar moved to dismiss on Tuesday, arguing that Trump’s lawyers have failed to present a case. Biden leads Trump in both states, leading Trump in Michigan by more than 148,000 votes and in Pennsylvania by more than 46,000 votes. Trump’s campaign has so far produced no evidence of widespread voter irregularities or fraud, and it isn’t clear his effort to delegitimize the election is finding traction among the American people with a Reuters poll finding 79% of Americans believe Biden won the election, including 6 in 10 Republicans. One state to watch is Georgia, which this morning declared a statewide recount of ballots. “With the margin being so close, it will require a full, by-hand recount in each country,” said Georgia Secretary of State Brad Raffensperger. Biden’s lead over Trump in Georgia is currently more than 14,000 votes.
Chipotle shares are up nearly 5% as it prepares to open its first digital-only restaurant. The digital0only location will open Saturday in Highland, New York and will not include a dining room or a line for ordering. Instead, customers will order in advance on Chipotle’s app, website, or third-party delivery platforms and pick up their order at the digital-only store. The coronavirus pandemic has accelerated a massive shift to ordering online, pushing the burrito maker to optimize the experience. CEO Brian Niccol said that the company could exceed $2.5 billion this year in digital orders, more than double last year’s total.
And Lyft shares are up more than 3% at the time of writing after the ride-hail company reported third quarter earnings after the bell on Tuesday. Lyft reported an adjusted loss per share of $1.46 on revenue of $499.7 million, versus revenue of $486.6 million expected by analysts. Company execs said Lyft will become profitable by the fourth quarter of 2021 even if there is a slower than hoped-for recovery, and with slightly lower ride volume than the company saw at the end of last year. The company also said it is working on expanding in delivery with hopes to take market share away from rival Uber Eats, and is consulting with a variety of retailers and restaurants.
Stocks We’re Watching
Verastem Inc (NASDAQ: VSTM): Verastem shares gained as much as 13.7% yesterday after the biopharma company reported third quarter earnings. “The third quarter of 2020 was marked most notably by the sale of the COPIKTRA (duvelisib) franchise to Secura Bio in a deal valued at up to $311 million, plus royalties. This strategic transaction allows us to focus our resources and efforts on advancing the VS-6766 and defactinib combination program in KRAS mutant solid tumors and provides us with a cash runway until at least 2024,” said Brian Stuglik, Chief Executive Officer of Verastem Oncology. “Looking ahead to the remainder of the year, we remain on track to commence two new company-sponsored, registration-directed Phase 2 clinical trials by year end, one in low-grade serous ovarian cancer (LGSOC) and one in KRAS mutant non-small cell lung cancer (NSCLC).”