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Continued progress on COVID-19 vaccine administration, stimulus, and quarterly earnings lifted equity markets last week. The Dow Jones Industrial Average was +1.1%, the S&P 500 Index was +1.3%, and the NASDAQ 100 Index was +1.5%.
With 372 companies in the S&P 500 Index having reported fourth quarter earnings, 82.0% have reported earnings above consensus. Earnings outlooks have continued to improve, consistent with economic data. Fourth quarter earnings are expected to increase 3.4% year-over-year versus an expectation of a 2.4% increase as of last week and an expectation of a 10.6% decline a month ago. Quarterly revenue is expected to increase 1.3% year-over-year versus a 1.1% increase last week and a 1.4% decline a month ago. Full-year 2020 earnings are expected to decline 12.0% year-over-year and full-year 2021 earnings are expected to rise 23.3% year-over-year. This week, another 55 companies in the S&P 500 are scheduled to report earnings.
Initial unemployment claims for the week of February 6th were 793,000 versus the previous week at 812,000. Continuing Claims for January 30th were 4.545 million versus 4.690 million the week prior.
In our Dissecting Headlines section, with so much of our economic growth riding on the COVID-19 vaccine program and further opening of restricted areas, we look at current progress in the COVID-19 vaccination programs globally.
Financial Market Update
Dissecting Headlines: COVID-19 Update
Vaccines for COVID-19 started rolling out around the world in December. To date, more than 176 million doses have been administered globally and the rate of vaccination is 6.2 million doses per day. Israel has the highest rate of inoculation with 70.5 per every 100 people.
In the United States, over 54 million doses have been administered to almost 12% of the population. Current rate of vaccination is approximately 1.7 million doses per day. States like Alaska, West Virginia, and New Mexico lead based on the percentage of their populations that have received at least one dose.
The U.S. government shipped 1 million COVID-19 vaccine doses to retail chains last week as part of the Federal Retail Pharmacy Program. Initially 6,500 pharmacies received doses and that number is expected to ramp to 40,000. Retailers receiving the vaccines include Walmart, CVS, Walgreens, and Kroger. Walmart is receiving approximately 20% of the doses as it is being used as a primary distribution point in areas with scarcer healthcare resources.
Distributions of vaccines should continue to expand and the rate of dosage per day should increase. At present rates, it would take eight months to cover 75% of the population with the two dose vaccines. This level would be considered enough for the country to return to normalcy.
Disclaimer: NovaPoint owns Walmart (WMT) in client accounts
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Want a printable version of this report? Click here: NovaPoint February 16, 2020
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