Welcome to delayed-reaction Monday.
Normally, we get Merger Mondays, when companies announce deals they’ve been working on over the weekend. But it looks like bankers took the weekend off for Easter, with just a couple of billion-dollar deals over the last few days.
Thankfully, there was big news from Tesla and the government that was disclosed over the holiday weekend for the market to react to.
The Bureau of Labor Statistics, for starters, released its jobs report on Friday. The U.S. added 916,000 jobs in March, well above economist projections for 660,000.
Tesla, meanwhile, released first-quarter delivery numbers on Friday. The auto maker reported 185,000 vehicle deliveries during the first three months of 2021, well above Wall Street expectations, which had drifted below 170,000 vehicles due to the global automotive microchip shortage that is roiling the entire automotive industry.
What’s more, Tesla delivered more cars than the top prediction set before semiconductors became hard to find. The stock is up almost 8% in premarket trading to about $710 a share.
It just goes to show: Sometimes, old news can be good news.
*** Barron’s is honoring women across the industry for their leadership, accomplishments, and contributions. The 2021 list includes Amy Hood, Mellody Hobson, Seema Hingorani, and more. New profiles will be published weekly—see the full list and read the newest profiles here.
America’s Underdog Vaccine Struggles to Find Its Footing
The third vaccine to gain emergency use approval in the U.S. has faced more than its share of setbacks, but Johnson & Johnson still has big ambitions for its “one-and-done” drug.
- After a production error forced J&J to toss out 15 million vaccine doses last week, the company said over the weekend that it is taking over from a contractor responsible for the error, while reaffirming its commitment to deliver 100 million doses by May.
- It has delivered 20 million of those to date, and less than 3% of all Covid vaccinations administered in the U.S. have used the J&J drug.
- Despite setbacks, the one-shot vaccine has become the preferred drug for use among homeless populations, whose numbers have surged during the pandemic and who can be hard to track down for a second shot of the Moderna or Pfizer vaccines.
- While some have been hesitant to get the J&J drug because lab-replicated fetal cells were used in its development, the Vatican has said, “it is morally acceptable to receive Covid-19 vaccines that have used cell lines from aborted fetuses in their research and production process.”
What’s Next: In his Easter Sunday address, Pope Francis urged the international community to commit to overcoming vaccination delays, especially in the poorest countries. The World Health Organization’s director has called vaccine inequity “grotesque” and called on rich countries to donate doses.
—Janet H. Cho
Democrats Talk Up Infrastructure Plan as Republicans Tear It Apart
Lawmakers sounded off over the weekend on President Joe Biden’s $2.3 trillion plan to upgrade the nation’s infrastructure, which he plans to pay for by increasing corporate taxes. Democrats say they are trying to get more Republicans on board, even as Republicans continue to poke holes in the plan.
- “We can’t let politics slow this down,” Transportation Secretary Pete Buttigieg told NBC’s “Meet the Press” Sunday, while saying that he is trying to gain Republicans’ support.
- Sen. Roy Blunt (R., Mo.) told Fox News Sunday that the way to do that is by slashing 70% of the proposal’s cost and focusing on “traditional” infrastructure. “It would be an easy victory if we go back and look at roads and bridges and ports and airports and maybe even underground water systems and broadband.”
- Calling Biden’s plan “a repeal of one of our signature issues in 2017, where we cut the tax rate and made the United States finally more competitive,” Sen. Roger Wicker (R., Miss.) also cast doubt on those prospects.
- Voicing concerns of other progressives, Sen. Bernie Sanders (I, Vt.) told CNN that Biden’s plan needs to address “human infrastructure” issues such as affordable child care, inadequate healthcare, prescription drug costs, college affordability and student debt.
What’s Next: Although Biden would prefer Republicans’ support, he is willing to use reconciliation to pass the measure without them, Energy Secretary Jennifer Granholm told CNN. That would enable the president to get the bill passed in the Senate with only Democratic votes with Vice President Kamala Harris casting the tiebreaking vote.
—Janet H. Cho
Why Facebook Is a Buy
For all of its baggage, Mark Zuckerberg’s Facebook remains a resilient growth machine.
- Through scandals, regulatory pressure, and activist campaigns for change, the company’s revenue and earnings have accelerated at impressive rates.
- Yet even as ad prices have rebounded 40% from a year ago, Facebook stock has nonetheless spent the past six months underperforming: Shares are up 12% for that period, versus a 20% gain for the S&P 500.
- There are plenty of reasons to dislike Facebook. It’s facing antitrust lawsuits; it has been blamed for spreading hate speech, and it has confronted repeated criticism of its privacy practices.
- But investors seem to have forgotten the innovation and other assets hidden within the social-networking giant, including Instagram, e-commerce, messaging, and virtual and augmented reality.
What’s Next: Facebook executives have multiple ways to get the stock moving again, from using cash on its balance sheet to pay dividends to monetizing WhatsApp. Read more on why Facebook is a buy in this week’s cover story.
—Max A. Cherney
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