After a November to remember for the markets, could December be even better?
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Good evening, Bull Sheeters. This is Fortune finance reporter Rey Mashayekhi, filling in this week for Bernhard with a special PM edition of the newsletter.
Having just had a historically good November, markets around the world kicked off December in style, spurred by positive manufacturing data out of Asia and good coronavirus vaccine news in Europe. There was even bullish sentiment around bipartisan stimulus talks in Washington—at least until the Senate majority leader pitched in.
- In New York, the markets put Monday’s lackluster denouement to November behind them. Both the S&P 500 (+1.1%) and the Nasdaq (+1.3%) set new record closing highs, while the Dow climbed 0.6%.
- Investors got a lift from news that lawmakers on both sides of the aisle had come together to unveil a new $908 billion COVID-19 stimulus bill that would aid a U.S. economy still struggling with the pandemic’s impact. But Senate Majority Leader Mitch McConnell (R-Ky.) was skeptical of the proposal, calling instead for a “targeted relief bill” of more limited scope.
- Elsewhere on Capitol Hill, the Senate Banking Committee pressed Treasury Secretary Steven Mnuchin and Federal Reserve chairman Jerome Powell over their diverging views on the Fed’s emergency credit lending facilities. Mnuchin has declined to extend the facilities—which the Fed launched in response to the pandemic—against Powell’s protests.
- U.S. manufacturing activity, while continuing to expand in November, saw growth slow down from the previous month as the nation dealt with a new wave of COVID-19 infections.
- Exchange operator Nasdaq has proposed mandatory board diversity requirements in a new filing with the Securities and Exchange Commission. The proposal would require the 3,000-plus companies listed on the stock exchange to have at least one woman and one racial minority or LGBTQ individual on their board of directors.
- The European bourses were up across the board on Tuesday. London’s FTSE led the way by gaining 1.9%, while the CAC 40 in Paris climbed 1.1%. Frankfurt’s DAX (+0.7%) and the pan-European STOXX 600 (+0.7%) registered more modest gains.
- Those markets were likely boosted by news that both the Pfizer/BioNTech partnership and Moderna have applied for emergency approval of their COVID-19 vaccines with the European Union.
- As in the U.S., European manufacturing saw slowing growth in November, as COVID-19 cases climbed and lockdown restrictions took hold across the continent.
- Scandal-plagued Swiss financial giant Credit Suisse has tapped Antonio Horta-Osorio, the outgoing CEO of British bank Lloyds, as its new chairman. On Monday, Lloyds named HSBC wealth and personal banking head Charlie Nunn as Horta-Osorio’s successor.
- Diplomats from Germany, France, and Britain urged the Trump administration to reconsider fresh sanctions against Iranian banks this fall, according to Reuters.
- A no-deal Brexit is still very much a possibility, senior British minister Michael Gove said 30 days before the end of the U.K’s “transition” period out of Europe.
- The Asian markets kicked off a bullish day with gains across the board Tuesday. Tokyo’s Nikkei climbed 1.3%, Hong Kong’s Hang Seng ticked up 0.9%, and South Korea’s KOSPI gained 1.7%. On mainland China, Shanghai’s SSE Composite (+1.8%) and Shenzhen’s SZSE Component (+1.9%) both were up.
- Unlike its counterparts in the U.S. and Europe, China’s factory sector grew at its highest level in a decade in November, according to a benchmark manufacturing PMI, signaling that the country’s economy is rebounding strongly from the pandemic.
- In Japan, third-quarter data showed further weakening in corporate capital expenditures and profits, with the government drawing up plans for stimulus measures.
- ASEAN and the EU have agreed to strengthen ties with the goal of promoting “safe and open trade routes and a free and fair trade,” according to Germany’s foreign minister.
- Gold climbed 2% to get back over $1,800/ounce.
- Conversely, the dollar sank to its lowest level in over two years on news of stimulus talks in D.C.
- Bitcoin also retreated, as all eyes remain on whether the digital currency can eclipse $20,000.
- Crude oil fell around 1%, with Brent settling at north of $47/barrel.
Tuesday saw two Silicon Valley tech giants shed light on major financial moves that promise to transform each company for years to come.
Most notably, Salesforce officially unveiled its acquisition of workplace communications platform Slack Technologies. The cash-and-stock transaction comes at a price tag of $27.7 billion, making it one of the largest software industry deals ever. (As CNBC notes, IBM’s $34 billion purchase of Red Hat, in 2018, takes the cake.)
Though the acquisition still needs the approval of both regulators and Slack shareholders, it could prove a major step forward for the Marc Benioff-led behemoth as it angles for superiority in a cutthroat business software market. One analyst described the deal as “a major shot across the bow at Microsoft,” its major rival in that market, and it comes only 18 months after Salesforce announced its previous record acquisition, a $15 billion-plus purchase of big data firm Tableau Software. Salesforce has long shown itself to be a company of enormous ambitions; now, it’s adding one of the buzziest names in enterprise software to its offerings.
In the day’s other major, Silicon Valley-related development on Wall Street, Airbnb revealed in a regulatory filing that it’s aiming for a roughly $35 billion valuation through its upcoming IPO. The vacation rental startup plans to sell nearly 52 million shares at a target price range of $44 to $50 a piece, which would yield proceeds up to $2.6 billion. Airbnb plans to list on the Nasdaq later this month under the ticker ABNB.
A public listing at those numbers would represent a huge success for the company, which understandably saw its business suffer this year at the hands of a pandemic that brought global travel to a near-standstill. But after laying off a quarter of its workforce and raising $2 billion in debt and equity funding, Airbnb rebounded in relatively short order—posting a surprise third-quarter net profit, per its S-1 filings, and clearing the path to its long-anticipated IPO. Such is the company’s turnaround that a $35 billion valuation would nearly double the $18 billion private valuation from Airbnb’s most recent funding round this past spring.
That’s all for now; please be sure to check out today’s reads below. Have a pleasant evening and see you again tomorrow.
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