Here are five things you must know for Tuesday, Jan. 5:
1. — Stock Futures Turn Lower
Stock futures on Tuesday turned lower following steep losses incurred on the first trading day of 2021 after a surge in coronavirus cases.
Contracts linked to the Dow Jones Industrial Average fell 11 points, S&P 500 futures slipped 2 points and Nasdaq futures were down 7 points.
Stocks declined sharply Monday as Wall Street’s optimism over the rollout of coronavirus vaccines was dashed by a climb in infections and fears of tougher restrictions and lockdowns.
Making Wall Street nervous also were Tuesday’s runoff elections in Georgia that will determine whether the Democrats take control of Congress and allow them to push the legislative agenda of President-elect Joe Biden.
The Dow fell 382 points, 1.25%, to close at 30,223 on Monday, the S&P 500 slumped 1.48% and the Nasdaq declined 1.47%.
It was the S&P 500’s worst drop to start a year since 2016.
“The first day doesn’t necessarily set the tone for the rest of the year, though,” said Lindsey Bell, chief investment strategist for Ally Invest. “The S&P 500’s best year in recent history – 1995 – started with a small decline on the first day. It’s a 50/50 chance that the market will be up or down following a first day decline.
“Judging this market by (Monday’s) drop could be shortsighted, too. There are reasons to be optimistic about 2021. Covid vaccines are being distributed, earnings outlooks are improving, and the U.S. economy could be heading for a mid-year boom. Fiscal and monetary support also remain supportive,” Bell added.
2. — Coronavirus – The Latest
The number of confirmed global deaths from Covid-19, the disease caused by the coronavirus, rose to more than 1.85 million, according to Johns Hopkins University. Cases of the virus across the world have risen to 85.7 million.
The U.S. death toll is 353,621, the most in the world. The number of confirmed infected people in the U.S. was more than 20.82 million.
There were 210,479 new coronavirus cases in the U.S. on Monday and 1,394 deaths, according to data from the university.
The Food and Drug Administration urged that Covid-19 vaccines be administered in accordance with how the agency approved the shots.
The FDA’s statement late Monday followed comments from Operation Warp Speed’s top adviser, Moncef Slaoui, who told CNN that the FDA would consider giving half-doses of Moderna’s (MRNA) – Get Report Covid-19 vaccine to people 18 to 55, making the vaccine available to twice as many people in the age group.
“At this time, suggesting changes to the FDA-authorized dosing or schedules of these vaccines is premature and not rooted solidly in the available evidence,” said FDA Commissioner Dr. Stephen Hahn and Dr. Peter Marks, who heads the FDA’s vaccine division. “Without appropriate data supporting such changes in vaccine administration, we run a significant risk of placing public health at risk, undermining the historic vaccination efforts to protect the population from Covid-19.”
New York Gov. Andrew Cuomo said the state found its first case of the U.K. variant of the coronavirus.
The U.K. went into full emergency lockdown for a third time after Prime Minister Boris shut schools and ordered the public to stay at home as the more contagious variant of the virus fueled a surge in infections and hospitalizations in the country. The lockdown will last until at least Feb. 15.
3. — NYSE Reverses Decision to Delist Chinese Telecom Companies
China’s three largest telecommunications surged Tuesday in Hong Kong after the New York Stock Exchange reversed its decision to delist the shares.
China Mobile (CHL) – Get Report, China Telecom (CHA) – Get Report and China Unicom (CHU) – Get Report each jumped as much as 7% after the Big Board in a statement late Monday said “it no longer intends to move forward with the delisting action.” The NYSE cited “consultation with relevant regulatory authorities” for its reversal.
Just last week, the NYSE said it would remove the shares to comply with a U.S. government order that bars investments in 35 companies owned or controlled by the Chinese military.
NYSE’s reversal was “quite unexpected,” Jackson Wong, director of asset management at Amber Hill Capital in Hong Kong, told Bloomberg. “Some funds that had an obligation to unload these shares will now need to buy them back. Some investors are also starting to pricing in a scenario that the decision to halt delistings could be a start of a de-escalation in tensions between China and the U.S.”
4. — Haven Joint Venture Disbands
The healthcare entity launched by Amazon (AMZN) – Get Report, Berkshire Hathaway (BRK.A) – Get Report and JPMorgan Chase (JPM) – Get Report will disband after forming three years ago.
“In the past three years, Haven explored a wide range of healthcare solutions, as well as piloted new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable,” Haven said in a statement Monday.
“Moving forward, Amazon, Berkshire Hathaway, and JPMorgan Chase will leverage these insights and continue to collaborate informally to design programs tailored to address the specific needs of their own employee populations.”
Haven will cease operations at the end of February.
Haven’s ambitions to transform healthcare in the U.S. proved too difficult to achieve, people familiar with the matter told The Wall Street Journal. Its shutdown attests to the challenges of making sweeping changes to the U.S. healthcare system.
Amazon and JPMorgan Chase are holdings in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells the stocks? Learn more now.
5. — Tuesday’s Economic Calendar
The U.S. economic calendar Tuesday includes the ISM Manufacturing Index for December at 10 a.m. ET.
Earnings will be released Tuesday by Cal-Maine Foods (CALM) – Get Report and Smart Global Holdings (SGH) – Get Report.
