A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.
London (CNN Business)Stocks rallied to record highs as a mob descended on the US Capitol. But now that President Donald Trump has become the first American president in history to be impeached twice, investors are taking a moment to recalibrate.
“Everyone’s trying to balance what this means in the short term,” JJ Kinahan, chief market strategist at TD Ameritrade, told me. “People aren’t sure what to make of it.”What’s happening: Uncertainty about what comes next has forced investors to press pause. Stocks have been in a holding pattern for the past few trading sessions, and Thursday’s futures are muted.
One fear is that the looming impeachment trial in the Senate will derail President-elect Joe Biden’s economic agenda. Senate Majority Leader Mitch McConnell has said it won’t begin until after Biden is sworn in next week.The delay is bad news for Wall Street, which had been banking on the swift passage of another sizable stimulus package now that Democrats have control of both chambers of Congress.Read MoreWith the US economy under renewed pressure as coronavirus infections and deaths rise, stimulus checks, funding for state and local governments and enhancements to unemployment benefits are increasingly important.Biden, who is due to outline his economic rescue package on Thursday, has expressed concerns about Congress’ ability to multitask.”This nation … remains in the grip of a deadly virus and a reeling economy,” Biden said Wednesday. “I hope that the Senate leadership will find a way to deal with their Constitutional responsibilities on impeachment while also working on the other urgent business of this nation.”But exactly how lawmakers will manage this difficult juggling act remains to be seen.Big picture: Wall Street is eager to look past what some view as “political noise” and let the market rally resume. Optimism that vaccine efforts will lead to a recovery in corporate earnings in the second half of the year remains strong, as does faith that central banks like the Federal Reserve will keep providing necessary support.”The stock market only cares about the direction of the economy, earnings, interest rates and the actions of the Fed,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in an email.Should the fate of stimulus — and therefore the economy — be tied to impeachment proceedings, however, investors may have no choice but to let the politics play out.
Investors cheer as Intel ousts CEO
Wall Street is cheering after Intel (INTC) said it had replaced CEO Bob Swan after a rocky two-year run.The latest: The company said Wednesday that Pat Gelsinger, who has led software firm VMWare for roughly a decade, would take the reins on Feb. 15.
Intel ousts CEO and names successorThe announcement sent shares up 7%. They’re rising another 2% in premarket trading Thursday.Investor insight: Intel’s stock fell nearly 17% in 2020 while other tech firms rallied, as it lagged behind competitors in producing the most advanced microprocessors and struggled with manufacturing delays.In the meantime, AMD (AMD) stole market share in the key PC and data center markets, while Nvidia (NVDA) invested heavily in AI, my CNN Business colleagues Clare Duffy and Jordan Valinsky report. Intel’s PC business also recently took a blow when Apple announced it will use its own processors, rather than Intel’s, in its new series of Macs.AMD’s stock doubled last year, while Nvidia — which is looking to buy chipmaker Arm for $40 billion — saw shares climb more than 120%.These dynamics stirred up a rebellion from activist investor Dan Loeb of Third Point, who called on the company’s chairman to hire an investment adviser to explore “strategic alternatives” aimed at regaining ground.Prior to his role at VMWare, Gelsinger spent three decades at Intel, becoming became the company’s first-ever chief technology officer. Analysts hope that given his technical background, he’ll be able to make some important changes — and get Intel back on track.
Dollar General will pay workers to get a Covid-19 vaccine
Dollar General (DG) is determined that its employees get coronavirus vaccines — so much so that it’s offering to cover the cost.The pitch: The chain said Wednesday that it will give its workers a one-time payment — equivalent to four hours of pay — after receiving a completed vaccination, my CNN Business colleague Nathaniel Meyersohn reports.”We do not want our employees to have to choose between receiving a vaccine or coming to work,” Dollar General said in a press release, noting that its hourly workers face hurdles to getting vaccinated, such as travel time, gas mileage or childcare needs.That said: The company, which had 157,000 employees as of Oct. 30, called getting a vaccine a “personal decision” and said it wouldn’t require it.Such incentives could become increasingly popular among employers that are hesitant to issue outright vaccine mandates but want to protect workers.But a slower-than-expected rollout of vaccines across the United States may mean that even with employer support, some frontline workers can’t access shots. Most states are still only vaccinating health care workers and residents and staff in long-term care facilities, such as nursing homes, according to Kaiser. Essential workers, including retail and grocery store workers, are set to be vaccinated at a later stage, though their eligibility varies by states.
Up next
BlackRock (BLK) and Delta Air Lines (DAL) report earnings before US markets open.Also today: Initial US jobless claims are expected to have ticked up to 795,000 last week, another sign of job market strain.Coming tomorrow: Bank earnings kick off with Citigroup (C), JPMorgan Chase (JPM) and Wells Fargo (WFC).
Source: edition.cnn.com