Markets
JNJ

Daily Markets: Johnson & Johnson Driving Stocks as Markets Close Out the Week

Close-up of the street sign for Wall Street
Credit: Andrew Kelly - Reuters / stock.adobe.com

Today’s Big Picture

Equities indices in Asia finished the week on a positive note with Japan’s Nikkei, China’s Shanghai Composite, South Korea’s Kospi and Hong Kong’s Hang Seng all closing higher. By mid-day trading, equity indices in Europe were mostly higher and U.S. futures point to positive start to the final day of trading for the week.

We finish the week with a trickle of quarterly earnings reports and economic data, leaving investors and market watchers to wonder what large pseudo conglomerates might break themselves apart next following the recent announcement from General Electric (GE) and this morning’s from Johnson & Johnson (JNJ) and Toshiba (TOSBF). Later today, President Joe Biden will hold a cabinet meeting to discuss the implementation of the $550 billion infrastructure deal. And over the weekend, we’ll be watching the geopolitical landscape following reports U.S. officials are consulting with allies given concerns Russia may be weighing a potential invasion of Ukraine, according to multiple people familiar with the matter. The weekend also kicks off the 2021 Dubai Airshow that runs from November 14-18, an event shareholders of Boeing (BA) and other aerospace companies won’t want to miss.

Data Download

International Economy

Reports indicate Japan’s government targets a $350 billion economic stimulus package that could be announced as soon as next week.

Industrial Production in the European Union rose 5.2% YoY in September after rising a downwardly revised 4.9% in August but topped the consensus expectation for a 4.5% increase in September.

Domestic Economy

No economic data was released yesterday due to the Veteran’s Day holiday. Later today we will get the JOLTs report for September and the University of Michigan Consumer Sentiment report. The most recent data from Indeed.com, which was released last week, found that job postings are now around 50% higher than their pre-pandemic level, using February 2020 as a baseline. Expectations are for today’s report to see job openings drop from 10.4 million to 10.3 million.

Markets

With the bond market closed in observance of Veteran’s Day yesterday, U.S. equities managed to eke out a positive close, through the broader market gave back some earlier gains and closed near the intraday lows. The S&P 500 increased 0.1% in a tight-ranged session. The Nasdaq Composite (+0.5%) and Russell 2000 (+0.8%) outperformed, while the Dow Jones Industrial Average fell 0.4%. The U.S. dollar touched its strongest point against the euro in 16 months yesterday following Wednesday’s hotter than expected CPI data, which renewed bets on the Federal Reserve will tighten monetary policy faster.

Gold lost nearly 1%, WTI crude stayed near $81 and the VIX dropped back below 18.

Stocks to Watch

Before U.S. equity markets begin trading, AstraZeneca (AZN), Spectrum Brands (SPB), and Warby Parker (WRBY) will be among the companies reporting their quarterly results.

Shares of Johnson & Johnson (JNJ) are moving higher on reports the company will split is drug and medical devices business from its consumer products group, creating two public companies.

Walt Disney’s (DIS) Disney+ Day is being held today and the event will Disney Plus Day will coordinate deals across Disney's offerings, release some new programming on the service itself, and drop trailers and other sneak peeks of new shows and movies to be had in coming quarters. As part of the campaign, both Shang-Chi and the Legend of the Ten Rings and Jungle Cruise will be available to stream at no added cost starting today.

Shares of the EV start-up Rivian (RIVN) enjoyed yet another phenomenal day, its second day of trading after its public debut, gaining 22.1% on the day. Amazon’s 20% stake is now worth nearly $21 billion, and Ford’s 12% stake is worth $12.6 billion.

Beyond Meat (BYND) had a tough day yesterday, losing 13.3% after reporting disappointing third quarter results after the bell on Wednesday.

Alibaba (BABA) revealed yesterday it generated $84.5 billion in merchandise sales during the duration of the Singles Day festival, which ran from November 1 to 11. This was the company’s highest take in the event’s 13-year history and is a 14% increase over last year, in local currency terms. That said, the rate of growth declined from the nearly 90% pace in 2020.

JD.com (JD) also reported record sales of $54.6 billion for the 11-day Single Day event.

Deere & Co. (DE) and the United Auto Workers representing some 10,000 striking workers will reportedly return to the bargaining table after union members rejected a tentative agreement that would have increased wages by 10% in the first year of a six-year contract and included a $8,500 signing bonus for every worker.

Chinese smart electric vehicle company, XPeng (XPEV) is expected to launch its new smart EV model at the 19th Guangzhou International Automobile Exhibition on November 19, 2021.

While Blink Charging (BLNK) reported quarterly EPS that modestly missed the consensus forecast, its revenue for the quarter skyrocketed 606.6% YoY to $6.40 million, significantly ahead of the $4.72 consensus. During the quarter, 3,016 charging stations contracted or sold, an increase of 351% compared to last year.

Shares of Lordstown Motors (RIDE) are trading off in pre-market trading following the company announcing the start of production for its Endurance EV pickup has once again been pushed back.

As part of an effort to improve shareholder value, Toshiba Corp. (TOSBF) said it would split into three separate companies, one for infrastructure services, another for technology devices and a third that would hold its stakes in memory chip pioneer Kioxia Holdings Corp. and Toshiba Tec Corp.

M&A

Spotify (SPOT) announced plans to acquire Findaway, a global leader in digital audiobook distribution. Terms of the transaction were not disclosed.

General Mills (GIS) is reportedly weighing selling a portfolio of brands including Progresso soup and Helper. As some readers may know, Progresso soup is near and dear to one of your authors.

After Today’s Market Close

Once again it is finally Friday, and that means there are no companies expected to report their quarterly results once the market closes. For those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar.

On the Horizon

  • November 15: NY Empire State Manufacturing Index
  • November 16: Retail Sales, Export & Import Prices, Industrial Production, NAHB Housing Market Index, Business Inventories, Overall Net Capital Flows, Foreign Bond Investment, Long-Term Tic Flows, API Crude Oil stock changes
  • November 17: Housing Starts, Building Permits, EIA Crude Oil and Gasoline Stocks
  • November 18: Weekly jobless claims and Philadelphia Fed Manufacturing Index
  • November 22: Chicago Fed National Activity Index, Existing Home Sales
  • November 23: Markit Manufacturing and Service PMIs, API Crude Oil stock changes
  • November 24: FOMC Minutes, Durable Goods Orders, Wholesale Inventories, Retail Inventories, Corporate Profits, weekly jobless claims, 2nd estimate for GDP, Goods Trade Balance, Personal Income and Spending, New Home Sales, PCE Price Index, Michigan Consumer Sentiment

Thought for the Day

“A great deal of intelligence can be invested in ignorance when the need for illusion is deep.” ~Saul Bellow

Disclosures

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Chris Versace

Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.

Read Chris' Bio

Lenore Elle Hawkins

Lenore Elle Hawkins serves as the Chief Macro Strategist for Tematica Research. With over 20 years of experience in finance, her focus is on macroeconomic influences that create investing headwinds or tailwinds. Lenore co-authored the book Cocktail Investing and in addition to her Tematica work, provides M&A consulting services for companies in Europe looking to expand globally. She holds a degree in Mathematics and Economics from Claremont McKenna College, an MBA in Finance from the Anderson School at UCLA and is a member of the Mont Pelerin Society.

Read Lenore's Bio

Mark Abssy

Mark Abssy is Head of Indexing at Tematica Research focused on index and Exchange Traded Product development. He has product development and management experience with Indexes, ETFs, ETNs, Mutual Funds and listed derivatives. In his 25 year career he has held product development and management positions at NYSE|ICE, ISE ETF Ventures, Morgan Stanley, Fidelity Investments and Loomis Sayles. He received a BSBA from Northeastern University with a focus in Finance and International Business.

Read Mark's Bio