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Stocks could ‘explode’ if Biden improves Covid vaccine rollout



The U.S. stock market could roar higher if President-elect Joe Biden is able to smooth out the country’s rocky start to Covid vaccinations, CNBC’s Jim Cramer said Wednesday, just a few hours before the Democrat is sworn into office.”It’s pure chaos. I predicted it would be pure chaos. I never thought it would be this bad,” Cramer said of the vaccine rollout on “Squawk Box.” “If President Biden just says on Day One, ‘It’s a do-over. We’ve got plans, military get ready,’ I think this market could explode.”There is a need for additional stimulus to support Americans and businesses who have been hurt by the pandemic, Cramer said. However, he contended the most necessary fuel for the stock market to continue its robust recovery from pandemic-era lows is a timely manner of vaccine distribution and administration.”I think we’re all beleaguered. I think an orderly transfer of power, coupled with a well-defined plan to give us vaccines as they roll out, will make it so this market can go up tremendously,” the “Mad Money” host said. “Everything else, I’m not saying it’s irrelevant but you can’t get this economy open until we’ve figured out how to get the vaccines from Pfizer and Moderna into our arms.”Biden has pledged to administer 100 million doses in his first 100 days. Last week, he detailed his plan to do so, which includes tapping the National Guard and the Federal Emergency Management Agency to set up large-scale vaccination sites across the country. Biden also plans to accelerate the availability of Covid vaccines at local pharmacies.Cramer said he believes Biden’s plan to have the federal government play a more active role in the administration of vaccines is necessary. Even so, Cramer said Biden has set a high bar with his 100-day vaccine pledge.”I think it is going to be a clock unlike any we have ever seen, where there is a belief that right now there is a plan. When you set out those expectations, the clock starts at noon,” said Cramer, 65, who has received his initial dose of the vaccine.As of Tuesday morning, the U.S. has administered 15.7 million vaccine doses, according to data compiled by the Centers for Disease Control and Prevention. There have been 31.2 million doses distributed.



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Global green asset manager makes first U.S. investment, expects more interest amid Biden presidency



pedrosala | iStock | Getty ImagesPresident-elect Joe Biden’s ascension to the presidency will encourage more renewable energy projects in the U.S. International investors are taking note.Greencoat Capital, a global renewables investment manager with $8 billion in assets under management, just announced its first U.S. investment after eight years operating across the U.K. and Europe.The firm is taking a 24% stake in four onshore wind farms located in coastal South Texas that together have a total installed capacity of 861 megawatts. That is roughly enough to power all of Houston for a year, according to the firm.Greencoat Capital had been eyeing the U.S. for the last 18 months, said partner Laurence Fumagalli.”It’s a great time, it’s an inflection point in the market,” he said. “I think Biden coming in is a massive boost. It will significantly increase the available investment opportunities over the next five to 10 years.”Germany-based RWE was previously the sole owner of the Texas development. The company will retain a 25% stake in the project, and will continue to operate the four wind farms. The other 51% stake is held by a subsidiary of Canada-based Algonquin Power & Utilities Corp, which was announced back in December.The Greencoat investment is valued at roughly $160 million, and RWE intends to use the influx of capital to finance further growth in its renewable energy business.Fumagalli said this model, whereby a utility company sells a partial stake in its operating assets and then uses the money to fund new projects, is a common model in Europe, and becoming more popular in the U.S.Biden has outlined ambitious initiatives to aid the nation’s transition to clean energy — including a $2 trillion climate bill — and Fumagalli said this creates especially attractive conditions for investors.”In any normal economy like Europe or the U.S., it’s the private sector that really mobilizes the large sums of capital involved in this energy transition,” said Fumagalli, who led Greencoat’s expansion into the U.S. “We are one of the early movers … you might expect more to follow us.”Half of Greencoat’s assets under management are publicly traded, while the other half is private money.For this specific investment, the capital came from the British Aerospace pension scheme (BAPFIM), as well as pension funds managed by the Willis Towers Watson Funds.Overall, Greencoat seeks to provide investors with a steady and stable long-term income. “It’s typically on a buy and hold forever basis,” Fumagalli said of the firm’s investments.Now that Greencoat has taken its first steps in the U.S., the fund will continue to look for compelling opportunities in the states. Ultimately, the firm is hoping to deploy about $1 billion per year across the nation.”We’re looking to mobilize capital at scale for both wind and solar in the U.S., which is exactly what we’ve done in Europe … there’s going to be a lot more of these new-build assets in the Biden era,” Fumagalli said.The announcement comes as U.S. renewable energy projects attract foreign interest. Earlier in January, Norway’s Equinor won one of the largest renewable energy contracts on record in the U.S.



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Leon Cooperman sees ‘euphoria’ in parts of market, skeptical on long-term outlook



Billionaire investor Leon Cooperman told CNBC on Wednesday he believes the stock market will struggle to generate meaningful returns in the years ahead, following its robust recovery from pandemic-era lows in the last 10 months.”I think the near-term outlook is probably OK. Long term, I think that we’re borrowing from the future,” Cooperman said on “Squawk Box.””Whenever you bought into the market when it was selling at the present multiple of, say, 22 times or higher, you’ve never really made any serious money one year, three year, five years out. I think that’s what we’re looking at,” added the chairman of the Omega Family Office.Accommodative monetary policy from the Federal Reserve, along with aggressive fiscal stimulus provided by Congress, in response to the pandemic, is just “pouring more fuel in the fire” on Wall Street, Cooperman said.”There’s a meaningful chunk of the market today that’s in euphoria. You see 50% price moves. You see a SPAC a minute. That’s stuff that’s ringing the bell,” said Cooperman.As he surveys the market, Cooperman said his approach is to “look for value.” He added, “I do have long-term concerns because I think the policies we’re running are unsustainable.””We have this push-pull. We have the push of very, very simulative fiscal and monetary policies. Hard to fight that presently,” Cooperman said, just a few hours before President-elect Joe Biden, a Democrat, will be sworn into office.”Then we have the pull of a new administration” that is likely to pursue policies such as higher corporate taxes and more regulation, he said, adding that he believes those policies could hurt the stock market. “It’s a less pro-business, less friendly business environment,” he predicted.A frequent critic of progressive Democrats and outgoing President Donald Trump in the past, Cooperman said he voted for Biden in the November even though it was “against my own economic interests.” Instead, he said he voted “my values, and my values did not lie with President Trump.”



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Morgan Stanley, Netflix, Pearson & more



Take a look at some of the biggest movers in the premarket:Morgan Stanley (MS) – Morgan Stanley earnings and revenue beat estimates for the fourth quarter. Results were helped in part by strong growth in investment banking and trading revenues. The company’s shares rose 2.5% in premarket trading as of 7:40 a.m. ET.UnitedHealth (UNH) – The health insurer reported quarterly earnings of $2.52 per share, beating estimates by 11 cents a share. Revenue came in above estimates as well. UnitedHealth’s profit fell from a year ago, however, due to the impact of pandemic-related costs. The company’s shares fell 1% in the premarket.Procter & Gamble (PG) – The consumer products giant came in 13 cents a share above estimates, with quarterly profit of $1.64 per share. Revenue topped estimates as well, as the pandemic boosted demand for household goods. P&G also raised its full-year guidance. P&G shares rose 1% in premarket trading.Netflix (NFLX) – Netflix shares are surging in premarket trading, after it reported that its subscriber numbers exceeded 200 million for the first time as 2020 ended. The video streaming service’s earnings missed forecasts, however, but its revenue exceeded Wall Street expectations and the company said it expected to be cash flow neutral this year and positive thereafter. Alibaba (BABA) – Shares of the China-based e-commerce giant are rising in premarket trading, after founder Jack Ma made his first public appearance in three months following questions about his whereabouts.Pearson (PSO) – Pearson reported a 10% drop in sales during 2020, but the educational publisher saw sales trends improve during the fourth quarter thanks to growth in online learning. Pearson shares jumped 6.7% in the premarket.ASML (ASML) – ASML reported better-than-expected profit and sales for the fourth quarter, with the chip equipment maker saying its 2021 outlook could improve depending on political developments between the U.S. and China. Tyson Foods (TSN) – The beef and poultry producer announced additional settlements in cases involving alleged chicken price-fixing, involving more than 30 commercial buyers as well as end-user consumers. Terms of the settlements were not disclosed, and they are still subject to a judge’s approval. The company’s shares were up 1.5% in premarket trading.Walt Disney (DIS) – Walt Disney eliminated bonuses for top executives for 2020, as the pandemic impacted earnings from its theme parks and movie studio business. Disney’s shares rose 2.2% in the premarket.Interactive Brokers (IBKR) – Interactive Brokers beat estimates on the top and bottom lines for the fourth quarter of 2020, thanks to an increase in customer accounts and higher trading volumes for the electronic brokerage firm. Zions Bancorp (ZION) – Zions reported better-than-expected earnings and revenue for the fourth quarter, with the regional bank also reinstating its outlook after suspending forward guidance last March. Zions also said it expects to resume share buybacks this year. Shares were up 1.3% in premarket trading.Paccar (PCAR) – Paccar shares are jumping in premarket trading, after the truck maker announced a new partnership with Amazon-backed autonomous vehicle technology startup Aurora. The venture will seek to develop and commercialize autonomous versions of Paccar’s Peterbilt and Kenworth trucks.



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Morgan Stanley (MS) Q4 2020 earnings



James Gorman, chairman and chief executive officer of Morgan Stanley, speaks during a Bloomberg Television interview in Beijing, China, on Thursday, May 30, 2019.Giulia Marchi | Bloomberg | Getty ImagesMorgan Stanley is set to report fourth-quarter earnings before the opening bell on Wednesday. Here’s what Wall Street expects:Earnings: $1.27 a share, 2.4% lower than a year earlier, according to Refinitiv.Revenue: $11.5 billion, 6.3% higher than a year earlier.Wealth management: $5.2 billion, according to FactSet.Trading: Equities $2.14 billion; fixed income $1.46 billion.How did Morgan Stanley navigate the markets late last year?That is the question after trading results at rivals Goldman Sachs and JPMorgan Chase helped drive earnings beats, while markets desks at Bank of America and Citigroup underwhelmed.Morgan Stanley, led by CEO James Gorman, also has the biggest wealth management business among the six largest U.S. banks, operations that typically benefit from rising markets. That business is being bolstered by the bank’s $13 billion E-Trade acquisition announced a year ago, and the fourth quarter is the first period E-Trade is integrated into the larger enterprise.Morgan Stanley is the last of the big U.S. banks to report fourth-quarter earnings. JPMorgan and Goldman Sachs beat analysts’ expectations for revenue and profit, helped by trading, while Citigroup, Wells Fargo, and Bank of America disappointed on revenue as lending margins were squeezed.Shares of New York-based Morgan Stanley climbed 33% in 2020, besting the 4.3% decline of the KBW Bank Index.This story is developing. Please check back for updates.



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TikTok owner ByteDance launches mobile payments in China



A symbol of TikTok (Douyin) is pictured at The Place shopping mall at dusk on August 22, 2020 in Beijing, China.VCG | Visual China Group | Getty ImagesGUANGZHOU, China — ByteDance has launched a new payment service within Douyin, the Chinese version of short-video sharing app TikTok.Douyin users can choose Douyin Pay to make purchases within the short-video app. Creators usually sell items or merchandise related to their content.”The set-up of Douyin Pay … is to supplement the existing major payment options, and to ultimately enhance user experience on Douyin,” ByteDance said in a statement. ByteDance owns both Douyin and TikTok.Indeed, Douyin already offers payment options from Alibaba affiliate Ant Group’s Alipay and Tencent’s WeChat Pay, the two dominant mobile payment apps in China.Together, Alipay and WeChat Pay account for more than 90% of the mobile payments market in China, according to iResearch.Both payment services are available within apps but also at physical stores where customers can scan barcodes to purchase items. This is different to Douyin Pay which will just be available within the Douyin app.Douyin’s payment system is operated by Wuhan Hezhong Yibao Technology, a company ByteDance purchased around two years ago. Users will need a Chinese bank account to use Douyin Pay.The latest push into both e-commerce and financial technology, or fintech, highlights ByteDance’s desire to expand beyond social networking. This has included forays into mobile gaming, a search engine and music streaming.



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Unintended consequences from stimulus could crush stocks: Jim Paulsen



The Leuthold Group’s Jim Paulsen sees trouble lurking as investors embrace growing odds of another stimulus package.Even though the long-time bull acknowledges massive aid has been necessary to steer the U.S. through the coronavirus crisis, he’s worried too much spending will spark sharp inflation. In a recent note, Paulsen called it the “most significant risk beyond this year.””What latent unintended consequences is it going to lead to? It could lead to more rapid inflation which would necessitate more rapid tightening,” the firm’s chief investment strategist told CNBC’s “Trading Nation” on Tuesday. “It could lead to a loss in world confidence and U.S. government finances.”Paulsen, who oversees about $1 billion, notes it’s ironic the one thing designed to help people navigate the pandemic may spark another serious recession.”It’s the overuse and abuse of economic policies around the globe for that matter — but specifically in the United States,” said Paulsen. For now, he’s telling clients it’s premature take action against potential inflation. Paulsen acknowledges there are certain factors that could offset the impact such as aging demographics and tech-driven innovation.”I would stay bullish this year. Stay invested. But you may want to think about increasing risks from latent policy prescriptions as we move towards the end of the year,” Paulsen said. “It becomes a bigger risk as we get into 2022, ’23 and ’24.”Paulsen expects the S&P 500 to end this year at 4,100, which implies an 8% increase from Tuesday’s close.Disclaimer



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Netflix, Interactive Brokers and Zions



A picture of a woman starting Netflix on a TV inside her apartment.Artur Widak | NurPhoto | Getty ImagesCheck out the companies making headlines after the bell: Netflix — Shares of the media streaming giant soared more than 10% in extended trading after the company reported strong subscriber growth and said it’s considering share buybacks. Netflix handily beat estimates for global paid net subscriber additions, reporting 8.5 million versus the 6.47 million analysts anticipated, according to StreetAccount. Netflix also beat estimates for revenue but earnings per share came below expectations.Interactive Brokers — Shares of the e-broker popped more than 1% in after-hours trading after the company beat on the top and bottom lines in its quarterly results. Interactive Brokers reported adjusted earnings of 69 cents per share, higher than the forecast 59 cents per share, according to Refinitiv. Brokerage accounts rose 56% year-over-year to 1.07 million.Zions Bancorporation — The regional bank jumped nearly 2% after reporting better-than-expected quarterly result. Zions said its EPS came in at $1.59, versus a FactSet estimate of $1.02 pre share. Revenue totaled $703 million in the fourth quarter, above expectations of $699 million.— CNBC’s Maggie Fitzgerald contributed reporting.



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Stock futures rise slightly in overnight trading ahead of Biden’s inauguration



Stock futures inched higher in overnight trading on Tuesday as investors awaited President-elect Joe Biden’s inauguration.Futures on the Dow Jones Industrial Average rose 75 points. S&P 500 futures gained 0.3% and Nasdaq 100 futures climbed 0.5%.Netflix soared more than 10% in extended trading after the company reported strong subscriber growth and said it’s considering share buybacks. Netflix handily beat estimates for global paid net subscriber additions, reporting 8.5 million versus the 6.47 million analysts anticipated.Biden will succeed President Donald Trump as the 46th president of the United States shortly after noon ET. His inauguration speech will focus on the need to bring the country together on the heels of a violent riot on Capitol Hill and amid extreme partisanship in Congress.Investors will also be on the lookout for any further information about Biden’s $1.9 trillion Covid-19 relief plan unveiled last week. On Tuesday, Janet Yellen, Biden’s designated nominee for Treasury Secretary, endorsed higher aid spending and urged lawmakers to “act big.””Everything else could take a back seat to events in Washington as investors look ahead to big changes in policy and outlook from a new administration,” TD Ameritrade’s chief market strategist JJ Kinahan said.Wall Street started the week with modest gains. The Dow rose more than 100 points on Tuesday, while the S&P 500 gained 0.8%, snapping a two-day losing streak. The Nasdaq Composite rallied 1.5% as big technology stocks rebounded from last week’s sharp losses.Biden’s stimulus proposal calls for direct payments of $1,400 to most Americans as well as additional unemployment benefit as well as state and local government aid. He also announced a sweeping plan to combat the pandemic in the U.S., which includes a nationwide vaccine campaign.The U.S. has fallen far short of its goal of vaccinating 20 million people by the end of last year. While the Trump administration’s Operation Warp Speed has delivered over 31.1 million doses across the country, only 12.3 million people have been inoculated.”I believe there is a very bright light at the end of the tunnel. We just need to make it through the next few months,” Invesco Chief Global Market Strategist Kristina Hooper said. “I expect markets to continue to move in expectations of a robust recovery later in 2021 when vaccines are broadly distributed.”Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.



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