Wall Street's "Fearless Girl" statue wears a lace collar in memory of the late Supreme Court justice Ruth Bader Ginsburg.
Spencer Platt/Getty ImagesThis is not a September to remember.
After a lousy Wednesday, the S&P 500 and Dow Jones Industrial Average are sitting just above correction territory—usually defined on Wall Street as a 10% drop from recent highs. The Nasdaq has already entered correction land.
How bad was Wednesday? Not even a mandate which effectively bans the sale of gasoline-powered cars in California by 2035 could boost the performance of electric vehicle stocks. Tesla shares dropped more than 10%. Other EV stocks dropped roughly 8% on average.
Now, the S&P is down 9.6% from its Sept. 2 high, while the Dow is down 8% from Sept. 2, though its high was set all the way back in March. The Nasdaq is down nearly 12% from Sept. 2.
September is historically the worst month of the year for stocks. And given a fantastic August—the S&P rose 7%, the Dow jumped 7.6%, and the Nasdaq climbed almost 10% as Apple stock spiked 21%—investors shouldn’t be surprised by some payback.
At least investors can look forward to the fourth quarter. That’s typically a good period for stocks. Of course, 2020 is a strange year so old patterns might not apply.
—Al Root
*** Barron’s senior managing editor Lauren R. Rublin, senior writer Al Root and chairman and CEO of Fisker Henrik Fisker discuss the future of automobiles. Sign up here.
***
Two Officers Shot During Protests Over Breonna Taylor Case
Two police officers were shot in Louisville, Ky., as protesters marched over the decision by a grand jury to indict one of the three officers involved in fatally shooting Breonna Taylor with wantonly endangering her neighbors.
- Kentucky’s Attorney General announced Wednesday that none of the officers involved in Taylor’s shooting would be directly charged for their role in her killing.
- The officers shot last night suffered non-life-threatening wounds and a suspect was in custody, interim police chief told reporters. The Kentucky National Guard entered Louisville Wednesday afternoon. The city’s mayor declared a state of emergency Tuesday and put in place a curfew from 9 p.m. to 6:30 a.m. through Friday.
- Former Detective Brett Hankison, who was fired from the police force in June, faces three counts of wanton endangerment for firing shots that went through Taylor’s walls and into neighboring apartments.
- Police burst into Taylor’s apartment on March 13 unannounced as part of a drug investigation. They had a “no-knock warrant” and said they believed that a man suspected of dealing drugs was having packages delivered to Taylor’s apartment. Taylor’s boyfriend fired at police, who shot back, hitting Taylor multiple times.
What’s Next: An investigation by the FBI into whether any federal laws were broken during the raid has been under way since May and will continue. That could result in federal civil rights charges.
—Ben Walsh
***
Four Coronavirus Vaccines Candidates Now in Final Trials
With more than 200,000 Americans dead from Covid-19, pharmaceutical companies are racing to roll out vaccines to halt the coronavirus pandemic. Here are four vaccine candidates now in Phase 3 trials.
- Johnson & Johnson announced this week it has started a 60,000-participant trial of its single-dose Covid-19 vaccine in the U.S., Brazil, South Africa, and other countries. The U.S. government is helping to fund the study and initial results could be in by early 2021.
- AstraZeneca’s Phase 3 trials started in August and have resumed abroad but are on hold in the U.S. because a participant in the U.K. developed a serious medical condition. AstraZeneca expects to have enough data by the end of 2020 or early next year to submit the vaccine for approval.
- Moderna started its Phase 3 trial in July and hopes to have 30,000 volunteers enrolled by the end of this month. CEO Stéphane Bancel has said that the vaccine could be found safe and effective by October, but more likely in November or, “in a worst-case scenario in December.”
- Pfizer is partnering with the German drugmaker BioNTech on its possible vaccine, which started Phase 3 U.S. trials in July. The company says it hopes to have data indicating whether its candidate vaccine works by the end of October.
- President Donald Trump’s coronavirus task force is reportedly in turmoil as Dr. Deborah Birx has seen her role diminish and Dr. Scott Atlas has joined the team. A White House official has denied the report.
What’s Next: Dr. Anthony Fauci, the nation’s leading infectious disease expert, said Wednesday during Senate testimony that he and his team think that “sometime by the end of this year, let’s say November or December, we will know whether or not these [vaccines] are safe and effective.”
—Ben Walsh
***
DOJ Looks to Limit Internet Companies’ Immunity
The Justice Department is seeking to force companies like Facebook, Alphabet, and Twitter to more actively manage and moderate content on their platforms, The Wall Street Journal reports.
- The proposal submitted to Congress on Wednesday aims to remove the immunity provided by Section 230 of the Communications Decency Act of 1996, which gives internet platforms broad protections against being held responsible for content published on their sites.
- The companies could still have immunity when they remove hate speech, expressions of violent extremism, and self-harm content, but would be held responsible for failing to restrict and report unlawful conduct.
- Companies would also be required to clearly articulate their moderation practices and follow them consistently.
- In June, the DOJ raised the idea of rolling back some of the legal protections that internet platform companies have enjoyed for more than 20 years after an earlier executive order signed by the president aimed at responding to conservative complaints that social media companies unfairly restrict online speech.
- Tech companies have denied political bias in content moderation. However, Twitter has introduced a fact-checking feature, and Facebook removed some of the president’s coronavirus posts earlier this year on the grounds that they violated its policies on spreading misinformation.
What’s Next: The DOJ’s proposal would require Congressional legislation to go into effect, and that is unlikely to happen soon. But it is indicative of just how quickly both Democrats and Republicans have ratcheted up their criticism of social media companies.
—Ben Walsh
***
EU Won’t Recognize Lukashenko as Belarus President
The European Union government said Thursday that Alexander Lukashenko, who swore himself in as Belarus president in a secret ceremony earlier this week, “lacks any democratic legitimacy” after claiming victory in presidential elections last August that were “neither free nor fair.”
- The statement by EU High Representative (foreign affairs Commissioner) Josep Borrell, in the name of all 27 EU foreign ministers, asks that Belarus authorities “respond positively to the demand of the Belarusian people for new democratic elections.”
- It also demands that the government “refrain from any further repression and violence directed against the Belarusian people and immediately and unconditionally release all those detained, including political prisoners.” Daily mass protests against Lukashenko are taking place in the capital Minsk.
- Before the contested election, the EU had pledged to spend €135 million on various projects in Belarus, and €53 million more to help the country face the coronavirus pandemic. It now says it is “reviewing its relations” with the country.
- Russian President Vladimir Putin, a Lukashenko ally, said last week in a meeting between the two men that Moscow would extend a $1.5 billion loan to its cash-strapped neighbor, after indicating earlier that a Russian police force was ready to help the regime if protests got out of control.
What’s Next: The EU is opening a new front in its worsening relationship with Putin’s Russia. This comes a week after Commission President Ursula von der Leyen cautioned that there was no point in “advocating closer ties with Russia,” since the recent poisoning of Putin’s opponent Alexei Navalny “is not a one off.”
—Pierre Briançon
***
Amazon and Echelon Aren’t Partners on Exercise Bike After All
Fitness company Echelon raised eyebrows when it said it partnered with Amazon.com to sell an exclusive $499 interactive exercise Peloton competitor it called the “Prime Bike.” Amazon begged to differ.
- Echelon said in a news release that it had developed a bike in collaboration with Amazon for $499. It called it the “Prime Bike” repeatedly, though the full name was “Echelon EX-Prime Smart Connect Fitness Bike.”
- An Amazon spokesperson told Barron’s the bike was not an Amazon product, or related to Amazon Prime, adding that the company did not have a formal partnership with Echelon. References to “Prime” were removed from the product’s Amazon listing.
- Echelon CEO Lou Lentine, while appearing on Fox Business Network’s Varney & Co. called Amazon’s response a “complete surprise,” citing conversations with Amazon in developing the $500 bike. “Yesterday, we learned that the internal Amazon team were not in full alignment,” Lentine said.
- The news of Amazon’s apparent entrance in the connected fitness space initially hit Peloton Interactive stock. After falling as much as 7% on Tuesday before settling down 0.4%, the stock rose nearly 1% in an overall down market on Wednesday. The company is already facing a new challenger in Apple, which launched a $9.99 fitness subscription.
What’s Next: For Peloton, the threat of Amazon joining the race in interactive fitness is off the table for now, Evercore ISI analyst Lee Horowitz told Barron’s. He said a situation like this speaks to Peloton’s executional skills compared to its competition.
—Connor Smith
***
The economic downturn has forced many consumers to skip mortgage and credit card payments. Some lenders are canceling these debts, but that can trigger negative tax consequences for borrowers. How do canceled debts affect your taxes?
In this Covid-19 ravaged economy, debts can pile up beyond a borrower’s ability to repay. However, lenders are sometimes willing to forgive (cancel) debts that are owed by especially beleaguered borrowers. While forgiveness can help you survive financially, it can trigger negative tax consequences. Or maybe not. This column summarizes the most important things borrowers need to know about the federal income tax implications of forgiven debts.
When a lender forgives part or all of a debt, it results in so-called cancellation of debt (COD) income. The general federal-income-tax rule is that COD income counts as gross income that must be reported on your Form 1040 for the year the debt cancellation occurs.
Key point: Lenders are supposed to report forgiven debt amounts to borrowers, and to the IRS, on Form 1099-C (Cancellation of Debt). So, the IRS is supposed to know when debts are forgiven. Do lenders always issue Forms 1099-C when debts are forgiven? Uh, no. Compliance can be spotty.
Thankfully, there are several beneficial exceptions to the general rule that COD income is subject to federal income tax. Here are the ones that are most likely to help beleaguered individual borrowers.
Read more here.
—Bill Bischoff
***
—Newsletter edited by Stacy Ozol, Anita Hamilton, Mary Romano, Matt Bemer, Ben Levisohn
September 24, 2020 at 06:54PM
https://www.barrons.com/articles/stock-market-this-is-not-a-september-to-remember-51600948475
The Stock Market Is Having a September to Forget - Barron's
https://news.google.com/search?q=forget&hl=en-US&gl=US&ceid=US:en
No comments:
Post a Comment