Stocks were lower at the open on Thursday with the Dow dropping 8 points, or less than 0.1%. The S&P 500 fell by 0.1%, while the Nasdaq traded just below the flatline.
Jobless claims hit a new pandemic era low last week. The Labor Department reported initial claims of 360,000, marking the lowest reading since March 14, 2020. Continuing claims fell by 126,000 to 3.24 million for the week prior, while the number of those collecting benefits under all government programs fell to 14.2 million. “Conditions in the labor market have continued to improve, but there is still a long way to go,” Federal Reserve Chair Jerome Powell said yesterday to the House Financial Services Committee. “Job gains should be strong in coming months as public-health conditions continue to improve and as some of the other pandemic-related factors currently weighing them down diminish.”
Morgan Stanley is up more than 1% this morning after the bank delivered an earnings beat. The firm posted earnings per share of $1.85 on revenue of $14.8 billion, versus estimates for earnings per share of $1.65 on revenue of $13.98 billion. “The firm delivered another very strong quarter, with contributions from all of our businesses,” CEO James Gorman said in the earnings release. “With our transformed business model providing more stable and durable earnings, we have doubled our dividend and announced a $12 billion buyback as we move to return our excess capital to shareholders.”
Taiwan Semiconductor Manufacturing said it expects sales to rise more than 20% in 2021, with revenue rising to between $14.6 billion and $14.9 billion in the current quarter. The world’s largest chipmaker also signaled plans to build new factories in the U.S. and Japan as the surge in demand for chips continues. “We are expanding our global manufacturing footprint to sustain and enhance our competitive advantages and to better serve our customers in the new geopolitical environment,” TSM chairman Mark Liu said. “While our overseas fabs are not initially able to match the costs of our manufacturing operations in Taiwan, we will work with governments to minimize the cost gap.”
Netflix is making its first big move into video games. The streaming giant has hired former Electronic Arts and Facebook executive Mike Verdu to serve as its vice president of game development. Verdu is expected to help Netflix bring video games to Netflix’s streaming platform within the next year, with games appearing alongside current content. Netflix said at the E3 gaming conference in 2019 that it would be releasing a mobile game based on the “Stranger Things” series, following an announced launch of Stranger Things 3: The Game for consoles and PCs. The company is also working on Dark Crystal: Age of Resistance Tactics, a game based on the Netflix moving “The Dark Crystal: Age of Resistance.”
And Spruce Point Capital Management short seller Ben Axler said Oatly’s stock is worth less than $10 per share just a day after his firm released a report alleging the company misled investors and customers about its sustainability claims. “Oatly is one of those inflated bubble stocks,” Axler said. Spruce Point alleges that the oat milk maker overstated its 2018 U.S. revenue by $6 million, failed to disclose that its gross margin calculation is not comparable to that of other food companies, and that the company has inflated its capital expenditures. In a statement, Oatly denied the allegations, calling the claims “false and misleading.” “This short seller stands to financially benefit from a decline in Oatly’s stock price caused by these false reports,” the company said. “Oatly rejects all these false claims by the short seller and stands behind all activities and financial reporting.”
Stocks We’re Watching
Adial Pharmaceuticals Inc (NASDAQ: ADIL): Adial Pharmaceuticals shares jumped as much as 30% yesterday after the clinical-stage biopharma stock announced advancements related to its adenosine analog development platform being developed by its Purnovate, Inc division. “We believe there may be a number of potential lead compounds in the current inventory of novel chemical entities further bolstered by patent applications. Our unique chemistry and solubility technology may provide a broad, novel and patentable approach that could firmly establish our position as a leader in the field of pain management,” CEO William Stilley said in a press release. “We have also identified other potential physiological benefits, including increased insulin sensitivity, which could result in licensing or partnership opportunities. We are excited to advance these programs and view this latest data as a strong validation of our Purnovate acquisition, which we believe helps further advance our goal of becoming the leading biopharmaceutical company in the addiction space. Our mission is not only treating addiction, but addressing the root causes of addiction, including the systemic overuse of opioids, which has contributed to the current addiction pandemic.”