US equity markets witnessed a volatile week following swings between optimism and worries about the coronavirus, easing political uncertainty and corporate earnings. While Pfizer Inc said its experimental COVID-19 vaccine in a Phase 3 trial showed more than 90 percent effectiveness, President-elect Joe Biden sealed his lead over incumbent President Donald Trump in the election. The reduced uncertainty helped S&P clock its best post-election weekly show in at least four decades.
Top stories this week
Record surge in daily virus cases overshadow vaccine developments
The outbreak of the novel coronavirus in the northeast of the country worsened and piled on spikes across the country, including in the Midwest region. New cases of COVID-19 continued to be above 100,000 throughout the week, with hospitalisations rising in at least 46 states. Some states also re-enforced tougher physical distancing measures.
While Pfizer’s announcement increased hopes for a quicker economic recovery, the unabated spread of the virus and a surge in hospitalisations has cast doubts over the pace at which the vaccine will reach every American and the logistical challenges that follow.
Lyft looks to foray into food-delivery
Ride-hailing startup Lyft is working on a new service in the food-delivery market without having a full-fledged consumer-facing platform. President John Zimmer also said the service would offer new income opportunities for drivers. The company also reported a third-quarter revenue of $499.7million, higher than average expectations of $486.5 million.
After undergoing a tough year when people chose to stay at homes during the pandemic, Lyft is looking to more than counter a 48 percent drop in its quarterly revenue and a slow pace of recovery in demand for ride hailing services. Excluding ride-hailing services, Lyft offers bike, electric scooter and car rentals in several cities. Shares of the firm are down about 14 percent on a year-to-date basis.
Biden seals US presidency win
President-elect Joe Biden won the state of Arizona, according to major news networks, and managed to flip a longtime Republican stronghold. The victory helped him ensure his victory in the presidential election and made him the second Democrat to win the state since 1948. Meanwhile, Trump continued to pile on legal challenges only to be struck down by courts.
A Biden win eases investor worries about tackling the pandemic in the country, which has killed over 240,000 people and infected 10 million people. Chances of a higher stimulus package to boost spending, and statements from the Federal Reserve about backing the economy also aid sentiment.
Companies continued to report their quarterly earnings through the week, but the notable ones to stand out were Cisco, Disney, Unity and Palantir. Cisco’s earnings showed higher demand for its services due to work-from-home boost, while Disney’s streaming video segment and some recovery at its theme parks made investors think if the company had weathered the coronavirus storm.
Unity and Palantir saw revenue growth of more than 50 percent, marking their first earnings announcements since going public in September.
Corporate earnings, which at the start of the year stared at an uncertain outlook given the pandemic’s shock impact, are retreating from their low points. Third-quarter reports of about 90 percent of S&P 500 companies have been released and estimates show profits falling 7.8 percent from last year, compared with an October 1 expectation for a 21.4 percent drop.
McDonald’s announces McPlant products
Burger chain McDonald’s announced changes to its menu and restaurant operations, notably the introduction of McPlant line of products in some markets next year.
The company is slotted to test new plant-based products after running a pilot earlier this year in Canada to sell patties made by Beyond Meat Inc. which is a leader in selling plant-based products that mimic meat. The McPlant line may include imitation burgers, chicken, and breakfast foods.
After going through a tough year when customer dine-ins plummeted due to the COVID-19 pandemic, the company is seeking to emphasise on go-to orders and vegetarian items. The company also becomes third after Burger King and Dunkin looking to cash in on plant-based food trends.