Economy

Stock Market Live Friday: Stocks Fall, Mnuchin Says ‘Firepower' Left, JPM Sees Negative GDP in Q1

NYSE

This is CNBC's markets live blog that will be updated throughout the day. 

Stocks fell on Friday as investors digested more new coronavirus cases in the U.S. as well as the Treasury department's decision to end funding for a handful of the Federal Reserve's key lending programs. The major Dow and S&P 500 wrapped up negative weeks, while small caps outperformed again.

  • The Dow fell 220 points, or 0.75%, its third negative session in four
  • The Dow fell 0.73% this week, breaking a two-week win streak
  • Dow impact: Salesforce (CRM) had the most negative impact on the Dow, accounting for 43 points against the index.
  • The S&P 500 fell 0.68%, its third negative session in four
  • The S&P fell 0.77% this week, breaking a two-week win streak
  • Ten of 11 S&P sectors were negative in Friday's session, led to the downside by tech, down 1.05%. The best performer was utilities, up 0.05%.
  • The Nasdaq Composite fell 0.42%, its third negative session in four
  • The Nasdaq gained 0.22% this week, its second positive week in three
  • The Russell 2000 gained 0.07%, its fifth positive session in six
  • The Russell 2000 gained 2.37% this week, its third positive week in a row.

— Christopher Hayes

The three major indexes closed in negative territory to close out the week on Wall Street. The Dow lost 220 points, or 0.8%. The S&P 500 and the Nasdaq Composite shed 0.7% and 0.4%, respectively.

— Jesse Pound

The Dow extended its losses in the final hour of trading and last traded down 227 points, or 0.8%. The S&P 500 and Nasdaq Composite were down 0.5% and 0.2%, respectively.

— Jesse Pound

The Dow and S&P 500 traded lower on Friday, putting the major market benchmarks on pace for their first weekly decline in three weeks as the number of coronavirus cases keeps rising. For the week, the Dow was down more than 0.4%. The S&P 500 has lost 0.3% this week.

Fred Imbert

Corporate earnings season has generally surpassed Wall Street expectations, but the ongoing pandemic was a topic of discussion for nearly every major company. According to FactSet, 444 companies in the S&P 500 mentioned "Covid" in earnings calls from Sept. 15 through Nov. 17.

That number could continue to rise in the weeks ahead as not every component of the S&P 500 has reported earnings during that window. Deere, for example, is set to report next week.

— Jesse Pound

A number of stocks were on the move around noon on Friday, including Zoom Video, which jumped as Covid-19 cases continue to rise around the world. Williams-Sonoma popped after reporting a 49% surge in digital sales during the most recent quarter, while Ross Stores and Intuit were also on the move following earnings reports.

Read more about the stocks making headlines here.

— Pippa Stevens

The Dow and S&P 500 were slightly lower around midday, putting them on track for their first weekly declines in three weeks. The Dow dipped 136 points, or 0.5%, on Friday. The S&P 500 traded 0.3% lower. The Nasdaq Composite hovered just above the flatline.

Fred Imbert

Piper Sandler initiated coverage of DraftKings and Penn National Gaming with overweight ratings on Friday. The firm identified those companies as market leaders in an industry that could, in Piper Sandler's bull case scenario, grow to more than $40 billion annually for sports gambling and iGaming.

CNBC Pro subscribers can read more about the call here.

— Jesse Pound

JPMorgan said Friday that it expects GDP to be negative in the first quarter. They believe the economy will contract 1% next quarter because of "the recent restrictions on activity associated with the latest surge in case counts." It is the first major bank to suggest effects of the surging cases will cause the first period of 2021 to show an economic contraction.

— Pippa Stevens

Allstate announced late Thursday it will sell $1.2 billion in 5-year and 10-year senior notes through a series of firms owned by minorities, women and veterans. According to Allstate, this will be the largest corporate bond offering on record managed by such companies.

"It is time to take a stand to create more equity in the securities markets," Tom Wilson, CEO of Allstate, said in a statement. "Diverse firms have the capabilities to increase their market share as evidenced by the results of this transaction. Allstate is committed to doing even more, including doubling our trading volume with diverse firms in 2021."

Some of the firms managing the offering include Loop Capital, AmeriVet Securities, Ramirez & Co. and Cabrera Capital Markets.

Fred Imbert

Treasury Secretary Steven Mnuchin said Friday he plans to work alongside senior lawmakers on both sides of the aisle to draft a target stimulus package in the coming weeks.

"I can tell you Mark Meadows and I will be speaking with Mitch McConnell and Kevin McCarthy this morning," Mnuchin said on "Squawk on the Street." "And we are going to come up with a plan to sit down with Pelosi and Schumer and try to get a targeted bill done for the people that really need it. And hopefully the Democrats will work with us."

— Maggie Fitzgerald

The Dow and S&P 500 opened Friday's session in the red, although the two benchmarks slid less than premarket trading had initially indicated after Treasury Secretary Steven Mnuchin said that the Treasury and Federal Reserve still have plenty of "firepower" left to help markets.

The Dow fell 52 points for a loss of 0.18%, while the S&P 500 declined 0.08%. The Nasdaq Composite slid 0.07%.

— Pippa Stevens

U.S. stock index futures moved off their lows after Treasury Secretary Steven Mnuchin said Friday that the Federal Reserve and Treasury still have plenty of "firepower" left to help markets. His comments follow the Treasury department's decision to pull the plug on several Federal Reserve funding programs.

— Jeff Cox, Pippa Stevens

  • Susquehanna upgraded Occidental Petroleum to positive from neutral.
  • Barclays downgraded FireEye to equal weight from overweight.
  • Loop initiated Nikola as buy.
  • Piper Sandler initiated DraftKings and Penn as overweight.
  • BTIG upgraded Capri to buy from neutral.
  • Wedbush downgraded Shake Shack to neutral from outperform.

Pro subscribers can read more here.

- Michael Bloom

BMO Capital Markets said it's expecting another year of double-digit gains in stocks in 2021. The Wall Street firm expects the S&P 500 to reach the 4,200 level by the end of 2021, which implies a 15% annual gain from BMO's 2020 price target of 3,650 and a 17% rally from where stocks sit currently.

The firm sees equities gaining amid low interest rates, unprecedented stimulus and rebounding corporate earnings. BMO has a $175 per share earnings forecast for the S&P 500, a nearly 35% jump from the pandemic depressed 2020 level.

The firm expects "interest rates to remain historically low for the foreseeable future. In addition, massive fiscal and monetary responses add another layer of strong support for continued stock market gains," BMO Capital Markets chief investment strategist Brian Belski told clients.

Pro subscribers can read more

— Maggie Fitzgerald

Treasury yields are barely lower as the markets digest the Treasury's decision to allow Fed emergency programs to expire, and there's no early action in some ETFs tied to the corporate or muni bond markets.

The Fed objected to the move and has said its programs are critical. It is highly unusual for the two guardians of the economy to be at odds with each other, particularly in a time of crisis. The five programs that were eliminated include the corporate bond facility, a municipal bond backstop, and the Main Street lending program.

ETFs representing the corporate and muni markets were barely moving ahead of the Wall Street open. The iShares iBoxx $ investment Grade Corporate Bond ETF LQD was down 0.3% on thin volume, and the iShares iBoxx $ High Yield Corporate Bond ETF HYG was down 0.1%. iShares National Muni Bond ETF MUB was not moving. The 10-year Treasury was at 0.84%.

"Although we may experience a short-term gap in some of these programs, there will be some form of continuity when we likely see a change at the Department of Treasury next year," writes Greg Faranello of AmeriVet.

Faranello describes the market action as "Very muted in general — hard to say it won't be bumpy with year end and Covid rising, but markets are in a much different place than March."

BMO's Ian Lyngen says the divide between Fed Chairman Jerome Powell and Treasury Secretary Steven Mnuchin appears to fall into the political domain. "Powell advocates extending everything over year-end to ensure against dislocations whereas Mnuchin sees functioning in the credit and muni markets as sufficient and the monies would be better used as grants/bailouts," he noted.

— Patti Domm

Heading into Friday's trading session, here's where stocks stand for the week:

  • The Dow is slightly higher for the week — up 0.01% — and on track for its third straight positive week
  • The S&P 500 is down 0.09% for the week, on track to break a two-week win streak
  • The Nasdaq Composite is up 0.64% for the week, on pace for its second positive week in three
  • The Russell 2000 is up 2.3% for the week, on pace for its third consecutive week of gains for the first time since August
  • Six of 11 S&P sectors are positive for the week, led by energy, which has gained 5.54%.

— Chris Hayes, Pippa Stevens

Pfizer and BioNTech said Friday they will seek emergency authorization from the Food and Drug Administration for their coronavirus vaccine candidate.

If the application is approved, the vaccine will likely be rolled out in phases, giving priority to health-care workers, the elderly and people with underlying health conditions.

"Filing in the U.S. represents a critical milestone in our journey to deliver a COVID-19 vaccine to the world and we now have a more complete picture of both the efficacy and safety profile of our vaccine, giving us confidence in its potential," Pfizer CEO Dr. Albert Bourla said in a statement.

Pfizer shares advanced 1.7% in the premarket and BioNTech gained 0.7%.

Fred Imbert, Berkeley Lovelace Jr.

President-elect Joe Biden said Thursday that he has made his choice for Treasury secretary and will announce his nominee around Thanksgiving. Former Fed Chair Janet Yellen and current Fed Governor Lael Brainard are considered top contenders for the role.

"It's someone who will be accepted by all elements of the Democratic Party, from the progressive to the moderate coalitions," Biden said.

Biden also said his plan to stop the spread of the coronavirus .

— Jesse Pound

After counting Georgia ballots by hand, the southern state confirmed Democrat Joe Biden's win over President Donald Trump. The recount was not due to any accusations of election fraud, but rather from an audit required by new state law.

"Georgia's historic first statewide audit reaffirmed that the state's new secure paper ballot voting system accurately counted and reported results," Georgia Secretary of State Brad Raffensperger said. "This is a credit to the hard work of our county and local elections officials who moved quickly to undertake and complete such a momentous task in a short period of time."

Georgia has until Friday to certify the results.

— Maggie Fitzgerald

The Treasury Department said Thursday it won't extend funding for several key Federal Reserve programs instituted in the early days of the coronavirus crisis that are set to expire at the end of the year. In a letter to Fed Chairman Jerome Powell, Treasury Secretary Steven Mnuchin asked for a 90-day extension on a handful of facilities used to keep financial markets functioning. However, Mnuchin said funding won't be extended for the Main Street Lending Program as well as two facilities used to buy corporate bonds. Fed officials responded by saying they disagreed with the move, in a rare bit of disagreement between two agencies that had worked together closely during the pandemic. The department can always reinstitute the programs later if needed, but for now the Fed will have to return the remaining $455 billion in Treasury collateral that backstopped the facilities. – Jeff Cox

Futures contracts tied to the major U.S. averages were little changed during premarket trading on Friday as a rising number of Covid-19 cases weighed on stocks, but sentiment was kept in check thanks to the latest coronavirus vaccine developments. Nasdaq 100 futures outperformed, rising 0.16%.

The major averages posted modest gains during Thursday's session, marking the first positive day in three for the Dow, S&P 500 and Nasdaq.

— Pippa Stevens

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