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Pfizer and partner BioNTech’s COVID-19 vaccine meets expectations on agency guidance and is enough to spur an agency review, according to staff of the U.S. Food and Drug Administration.

The finding is one of several significant new results featured in the briefing materials, which span 53 pages of data analyses from the agency and from Pfizer.

On Thursday, F.D.A.’s vaccine advisory panel will discuss these materials in advance of a vote on whether to recommend authorization.

On the bright side:

the study sponsors “provided adequate information to ensure the vaccine’s quality and consistency for authorization of the product under an EUA” agency reviewers said in briefing documents ahead of a Thursday panel.

Additionally, the study confirms that the vaccine worked well regardless of a volunteer’s race, weight or age.

However, one thing of note in the ‘risk’ section includes:

The vaccine has been shown to elicit increased local and systemic adverse reactions as compared to those in the placebo arm, usually lasting a few days…

Severe adverse reactions occurred in 0.0-4.6% of participants, were more frequent after Dose 2 than after Dose 1 and were generally less frequent in older adults (>55 years of age) (<2.8%) as compared to younger participants (≤4.6%). Among reported unsolicited adverse events, lymphadenopathy occurred much more frequently in the vaccine group than the placebo group and is plausibly related to vaccination.   

The experimental vaccine, BNT162b2, is on track to be the first shot to get an emergency authorization in the US.

*  *  *

Full Briefing Document below:

Global markets dropped for a second day and US equity futures fell as optimism that a fiscal stimulus deal would quickly pass in Congress fizzled and as investor focused on a rise in coronavirus infections and ever tougher lockdowns threaten to shutdown year-end holidays. A $5 billion “at the market” equity offering announcement by TSLA pushed futures to session lows.

At 7:20 a.m. ET, Dow e-minis were down 148 points, or 0.5%, S&P 500 e-minis were down 19.50 points, or 0.52%, and Nasdaq 100 e-minis were down 45.5 points, or 0.38%. Among individual stocks,  Stitch Fix surged 36% pre-market after reporting fiscal first-quarter profit and revenue that beat analyst estimates for the heavily-shorted personal-styling company. Tesla fell 2.8% premarket after it unveiled plans to raise up to $5 billion in a Goldman-led stock offering, just days after Goldman upgraded the stock from Neutral to Buy.

Goldman, which just upgraded tesla 4 days ago, is of course lead manager on TSLA’s offering. Nothing criminal here at all https://t.co/CmCrG6RpGO

— zerohedge (@zerohedge) December 8, 2020

“You saw more than a slight moderation to the S&P 500, and the Dow, but you’re still looking at these markets at record highs,” said Tom Piotrowski, a market analyst with CommSec. “It’s a matter of looking out for what the next catalyst is for these markets.”

In Europe, travel, retail and health care stocks led declines following a slump in Asia after Hong Kong announced it would start implementing some of its strictest social distancing measures since the pandemic began. The Stoxx 600 dropped 0.5%, with CAC 40 the regional underperformer. German sentiment, as measured by ZEW expectations survey, posted a modest rebound even as current conditions continued its slump deeper into negative territory.

Earlier in the session, MSCI’s broadest index of Asia-Pacific shares ex-Japan narrowed its losses from early trade, but was still down 0.07% as anxiety over the coronavirus pandemic capped sentiment. Among Asia’s top markets, Australian shares closed higher for a sixth straight session, lifted by data showing an improvement in business sentiment. The S&P/ASX 200 index rose 0.2% to 6,687.7, adding about 3% in the past six sessions. However, Japan’s Nikkei 225 dipped 0.22% and Seoul’s Kospi lost 1.53%. Chinese blue-chips were down -0.2% with Hong Kong’s Hang Seng sliding 0.8%, as Sino-U.S. tensions continued to weigh on the market.

Chinese Foreign Minister Wang Yi assured U.S. executives that Beijing remained committed to the Phase 1 trade deal with the United States. That came as a report showed China’s purchases of U.S. goods and services as of October, specified in the Phase 1 deal at $75.5 billion for 2020, was about half the level they should be on a pro-rated annual basis.

The S&P 500 and the Dow fell on Monday, but the Nasdaq closed at record levels as investors unwound the reflation trade and rushed back to technology mega-cap stocks which have thrived from the pandemic-induced shift to work from home. Positive developments related to the COVID-19 vaccine helped investors in recent weeks look past the surge in infections and raise bets on a swift economic recovery next year but news that Pfizer told administration officials that it cannot supply substantial additional vaccines until late June or July, hurt sentiment.

“Signs that traders have trimmed risk are there, with some focus on U.S. Covid trends,” Pepperstone head of research Chris Weston wrote. Renewed focus on trade tensions and the ongoing Brexit negotiations, suggests “this selective mindset is just the market sitting on its hands waiting for the next shoe to drop.”

Residents in California, the nation’s most populous state, faced new restrictions on Monday after record case numbers and hospitalizations, while officials in New York warned similar restrictions could come into effect soon. Nationwide, COVID-19 infections are at their peak, with an average of 193,863 new cases reported each day over the past week according a Reuters, and health officials warned that the worst is yet to come.

Traders are also closely watching whether Congress will be able to clinch an agreement on a long-awaited COVID-19 relief bill and a $1.4 trillion spending bill, with Friday eyed as a possible deadline to avoid a government shutdown. While hopes for another U.S. stimulus package fanned bullish sentiment, progress has stalled in recent days. Senate Majority Leader Mitch McConnell top priority – federal limits on Covid-19 related lawsuits against businesses – has emerged as the key potential deal-breaker.

Congress will vote this week on a one-week stopgap funding bill to provide more time for lawmakers to reach a deal on both spending and pandemic relief; pressure has been mounting on policymakers to deliver a fresh infusion of aid to families and businesses reeling from the virus outbreak. Lawmakers enacted $3 trillion in aid earlier this year, but have not been able to agree on fresh relief since April.

In FX, the pound weakened for a third day with optimism for a breakthrough in Brexit talks continuing to fade. U.K. Prime Minister Boris Johnson said he’s “very hopeful” of securing a trade deal with the European Union, but warned there may come a time to abandon negotiations if progress isn’t made. The dollar initially slid against most currencies as investors eyed potential stimulus and vaccine development, but has since rebounded and was mostly flat. The DXY index was little changed at 90.829, not far from 90.471, its weakest since April 2018.

In rates, the yield on the benchmark 10-year notes rose slightly to 0.9294% on Tuesday, with weakness across the curve before the start of this week’s coupon auction cycle with 3-year note sale, despite weakness in S&P 500 futures. Yields cheaper by about 1bp across long end of the curve, steepening 2s10s, 5s30s spreads slightly; 10-year around 0.93%, within 1bp of Monday’s close. Cash volumes were light during Asia session as buyers remained sidelined. Gilts, bunds outperform as hopes for a Brexit trade agreement fade.

In commodities, oil prices fell extending losses from the previous session. Brent crude fell 0.72% and traded around $48.6 and WTI dipped 0.57% toward $45. Prices came under pressure after Reuters reported the United States was prepping sanctions on at least a dozen Chinese officials over alleged roles in Beijing’s disqualification of elected opposition legislators in Hong Kong. Spot gold prices were fractionally higher at $1,863.70 per ounce as investors bet on more stimulus money being pumped into the financial system.

It’s a relatively quiet day: we get the latest German ZEW survey for December, which came in at 55.0, stronger than the 45.5 expected and up from 39.0, and from the US there’s the NFIB small business optimism index for November, which dropped to 101.4 from 104.0. Some other key events coming up include the ECB policy decision on Thursday, where economists widely expect the central bank to increase and extend its pandemic bond-buying program. The FDA meets to discuss the vaccine made by Pfizer/BioNTech on Thursday. If the FDA authorizes emergency use, Health & Human Services Secretary Alex Azar said vaccine distribution could begin within 24 hours.

Market Snapshot

• S&P 500 futures down 0.4% to 3,677.50
• MXAP down 0.1% to 193.50
• MXAPJ down 0.07% to 641.96
• Nikkei down 0.3% to 26,467.08
• Topix down 0.1% to 1,758.81
• Hang Seng Index down 0.8% to 26,304.56
• Shanghai Composite down 0.2% to 3,410.18
• Sensex up 0.5% to 45,657.42
• Australia S&P/ASX 200 up 0.2% to 6,687.73
• Kospi down 1.6% to 2,700.93
• Stoxx Europe 600 down 0.1% to 392.41
• German 10Y yield fell 0.6 bps to -0.588%
• Euro up 0.1% to $1.2125
• Italian 10Y yield fell 1.4 bps to 0.499%
• Spanish 10Y yield rose 0.2 bps to 0.054%
• Brent futures down 0.3% to $48.65/bbl
• Gold spot up 0.1% to $1,864.20
• U.S. dollar Index little changed at 90.77

Top Overnight News from Bloomberg

• The U.K.’s National Health Service launched what it has called the biggest immunization campaign in its history, starting Covid vaccinations across the country
• Yoshihide Suga unveiled some of the details of his first stimulus package as Japan’s prime minister on Tuesday amid an increase in virus cases and a slide in support for his cabinet that are an early test of his leadership
• Poland’s prime minister launched a broadside on the European Union’s push to link funding to democratic values, ratcheting up tension over his country’s decision to derail the bloc’s $2.2 trillion spending package with Hungary. EU officials have given the two countries hours to offer a clear signal that they’ll lift their veto as early as Tuesday, according to people with knowledge of the talks
• Jake Sullivan, President-elect Joe Biden’s nominee for national security adviser, expressed guarded optimism for restoring the nuclear accord with Iran even as the country has moved closer to developing nuclear weapons
• President- elect Joe Biden plans to nominate retired Army General Lloyd Austin as defense secretary, according to three people familiar with the decision, making him the first African American to lead the Pentagon
• With most funding markets showing rising dollar premiums for the year-end, it may not be long before the benchmark Libor fixing comes under pressure too

A quick look at global markets courtesy of Newsquawk

Asian equity markets were mixed after an uninspiring handover from the US where stocks pulled back from record levels amid infection and lockdown concerns with underperformance in cyclicals front-running the declines, although the Nasdaq outperformed and extended on record levels as growth stocks were favoured and with Tesla in the driving seat heading into its S&P 500 inclusion later this month. ASX 200 (+0.2%) was kept afloat by strength in gold miners after recent upside in the precious metal and as tech was inspired by the resilience of the sector stateside, with an improvement in business survey data adding to the tailwinds, while the Nikkei 225 (-0.1%) was subdued by ongoing currency strength although the announcement of a widely flagged JPY 73.6tln stimulus package and better than expected Final Q3 GDP, which grew at the fastest pace since comparable data was available in 1994 at 5.3% Q/Q and 22.9% annualized growth, has cushioned the losses for the index. Hang Seng (-0.4%) and Shanghai Comp. (Unch.) lagged for most the session after the US confirmed new Hong Kong related sanctions on 14 members of the National People’s Congress despite warnings of strong countermeasures by China’s Foreign Ministry, with Hong Kong also pressured by increased restrictions and as JD Health’s debut stole the limelight with gains of more than 50% from its IPO price. Finally, 10yr JGBs were higher after breaking back above the 152.00 level amid the subdued mood for Tokyo stocks and recent bull flattening in USTs, with further upside seen following stronger metrics at the 5yr JGB auction.

Top Asian News

• A 562% Stock Rally, a $23 Billion Firm But Zero Analyst Coverage
• China Fortune Land 2022 Dollar Bond Drops Most on Record
• Asia’s Markets Are Red Hot And the Money Just Keeps Pouring In
• Electric Cars Lead as China Auto Sales Rise for Fifth Month

European equities trade with little in the way of firm direction (Eurostoxx 50 -0.4%) in what has been a relatively uninspiring session thus far. Stocks in the region initially resided in modest negative territory with a mildly anti-cyclical bias before heading towards the unchanged mark. Stateside, the initial growth/value divergence between the e-mini Nasdaq and Russell which favoured the former has since narrowed whilst the e-mini S&P trades near-enough flat. From a macro perspective, not a great deal has changed throughout the session with Brexit dominating the focus in Europe, whilst elevated COVID levels and budget/stimulus talks in the US take the fore. On the latter, the House will conduct a vote on a 1-week continuing resolution on Wednesday to provide lawmakers more time to work on government spending and virus relief. Sectors in Europe are currently mixed with travel & leisure names near the bottom of the pile with InterContinentalHotels (-3.0%) a laggard in the sector after being downgraded to underperform from hold at Jefferies. AstraZeneca (-1.5%) are marginally lower on the session with Health Care names faring marginally worse than peers with the UK vaccine task force acknowledging that only 4mln doses of the AstraZeneca/Oxford University COVID-19 vaccine will be delivered this year vs. the projected production of 30mln by year-end in the UK due to manufacturing delay. To the upside, German-listed auto-supplier Hella (+6.4%) sit at the top of the Stoxx 600 after raising FY20/21 guidance, whilst ASM International (+4.5%) and Lanxess (+1.5%) are also firmer on the session after broker upgrades at JP Morgan Chase and UBS respectively.

Top European News

• Johnson Set for Brussels Crisis Talks as Brexit Hopes Fade
• British Businesses Slam Last-Minute Brexit as Talks Sputter
• Macron and Merkel Agree to Keep Brexit Off EU Summit’s Agenda

In FX, the broader Dollar and Index trade on a modestly softer footing but remain caged – with the latter meandering within a tight 90.750-989 intraday band thus far amidst a lack of fresh fundamental newsflow and catalysts. State-side, government funding and COVID-relief hold onto attention with the former anticipated to see a one-week stopgap resolution as per Senate Majority Leader McConnel, but COVID-19 relief is proving to be tricker with no concrete compromises seen thus far from either side, but with some mild optimism expressed by the Democrats. From a technical standpoint, yesterday’s 90.612 low could prove to be a support level ahead of 90.500 and Friday’s 90.471 low, whilst to the upside, Monday’s 91.241 peak could act as a point of resistance above the 91.00 psychological mark.

• GBP, EUR – Sterling narrowly underperforms G10 peers as eyes remain on Brexit developments after the phone call between UK PM Johnson and EU’s von der Leyen failed to narrow the outstanding gaps in talks, with the two set to meet at some point this week. The timetable for this meeting remains in limbo but is touted to take place tomorrow, in-fitting with Brexit Negotiator Barnier’s Wednesday deadline ahead of the European Council summit on Thursday and Friday. Cable sees itself around 1.3350 having had waned off its current 1.3377 intraday peak, with the 21 DMA seen around 1.3308. Subsequently, the softer GBP has provided the EUR with some reprieve via the cross whereby EUR/GBP continues to inch closer to 0.9100 (vs. low 0.9050) having had notched a high of 0.9140 during yesterday’s session. As such, EUR/USD retains its 1.2100+ status after briefly dipping below the figure on account of early-morning Dollar inflows.
• AUD, NZD, CAD, JPY, CHF – The non-US dollars all trade modestly firmer against the Buck but with gains relatively broad-based as opposed to idiosyncratic factors. AUD/USD makes headway above 0.7400 (vs. low 0.7405) but remains below yesterday’s 0.7453 high, whilst its Kiwi counterpart meanders around 0.7050 (vs. low 0.7027) as it closes in on Monday’s 0.7064 peak. The Loonie sees some gains in conjunction with a recovery in oil prices, but the currency is not an outlier an in terms of gains vs. its antipodean peers. USD/CAD remains sub-1.2800 as the pair failed to take out support around the 1.2772-74 region which held throughout the prior two sessions. The traditional safe havens meanwhile trade flat vs the Dollar – USD/JPY trades on either side of 104.00 and within recent ranges, whilst USD/CHF sees similar price action on either side of 0.8900.

In commodities, WTI and Brent front month futures have trimmed overnight losses to trade around the unchanged mark at the time of writing despite a distinct lack of fresh news flow for the complex. Earlier modest losses in the complex came alongside some COVID-19 developments whereby Germany is poised to discuss tighter restriction this week, whilst AstraZeneca informed of some manufacturing delays in its COVID-19 vaccine following a similar announcement by Pfzier and BioNTech last week. On the flip side, early trial data from SinoVac’s vaccine candidate pointed to an efficacy level of around 97%. WTI Jan resides around USD 45.50/bbl (vs. low 45.14/bbl) whilst Brent Feb sees itself under USD 48.75/bbl (vs. low 48.09/bbl). Looking ahead, ING holds a constructive view with regards to crude markets amid the OPEC+ output reductions coupled with a continued recovery in demand, with the Dutch bank forecasting ICE Brent to average USD 55/bbl over 2021 with prices around USD 60/bbl by the end of next year. The analysts also touch upon the Iranian sanction wind-down under a Biden administration, which sees around 1.5-2mln BPD of supply back in the market, but the timing of this is unknown. “If we were to see a fairly quick return of Iranian supply over 1H21, this could put some pressure on the market, with the market likely finding it difficult to absorb additional barrels. However, if we only see Iranian supply starting to come back in the latter part of next year, the market should be able to digest this oil more easily, given expectations of demand continuing to recover as we move through the year”, the bank states. Elsewhere, spot gold and spot silver are relatively uneventful but hold onto a lion’s share of yesterday’s gains, with the former still north of USD 1850/oz (vs high 1872/oz) and the latter above USD 24.50/oz (vs. high 24.75/oz). In terms of base metals, iron ore prices in China continued to rally amid the ongoing constructive demand outlook. On the other hand, LME copper prices are softer as the red metal tracks the lacklustre risk sentiment in markets.

US Event Calendar

• 6am: NFIB Small Business Optimism, est. 102.5, prior 104
• 8:30am: Nonfarm Productivity, est. 4.9%, prior 4.9%
• 8:30am: Unit Labor Costs, est. -8.9%, prior -8.9%

DB’s Jim Reid concludes the overnight wrap

Having reached all-time highs at the end of the last week, global equity markets fluctuated yesterday as investors waited for more news on both the US stimulus talks as well as the latest Brexit negotiations. By the close, the S&P 500 had retraced slightly from its record close on Friday, with a -0.19 % decline, as cyclicals including energy (-2.44%) and financials (-0.70%) led the moves lower. Tech stocks continued to advance however, with the NASDAQ (+0.45%) hitting yet another all-time high, as the index was supported by strong performances from Tesla (+7.13%), Facebook (+2.10%) and Apple (+1.23%). Tesla’s climb now makes it the 8th largest company in the world with a market cap of $608bn and in the S&P 500 will only be behind Apple, Microsoft, Amazon, Alphabet and Facebook when it enters the index on December 21st. It’s now only around $5bn smaller than the next seven largest global auto makers combined, including Toyota, Volkswagen, Daimler and GM. It’s a valuation that’s hard to comprehend really. Over the other side of the pond, equities in Europe also saw a slight pullback, with the STOXX 600 down -0.30% from its post-pandemic high on Friday.

In terms of the latest on Brexit there is a high-stakes game continuing but markets at a global level only really have a passing interest, and at the moment it feels that Sterling is going to be the main swing factor in any deal or no deal situation. The latest is that UK Prime Minister Johnson held a call with European Commission President von der Leyen yesterday, but in a joint statement the two “agreed that the conditions for finalizing an agreement were not there due to the remaining significant differences on three critical issues”, with those being the long-standing sticking points of the level-playing field, governance and fisheries. Johnson will now be going to Brussels for emergency talks “in the coming days”, with speculation that this could be as soon as tomorrow since on Thursday a summit of EU leaders is taking place there. Though an in-person meeting was taken by some as a positive sign, along with the fact the two sides are still talking, a UK government source said to journalists that “”Whilst we do not consider this process to be closed, things are looking very tricky and there’s every chance we are not going to get there.”

Staying on Brexit, UK MPs voted yesterday to re-insert the controversial provisions in the Internal Market Bill that the House of Lords had previously taken out of the legislation. However, in a positive development in terms of the likelihood of reaching a deal, the UK government released a statement earlier in the day saying that they would be prepared to remove or deactivate the controversial clauses in the event that the solutions being considered in the Withdrawal Agreement Joint Committee in regard to the Northern Ireland protocol were agreed. This is actually separate to the trade talks since it relates to the application of the already-reached Withdrawal Agreement, but the potential threat to breach this deal had thrown a spanner into the works of the trade talks since the EU felt the UK wasn’t honouring its word on something it had already agreed to.

In terms of the market reaction, sterling lost ground against the other major currencies, weakening -0.45% against the US Dollar (-1.58% at the morning lows), and -0.31% against the Euro, with the moves in turn helping the multinational-dominated FTSE 100 to outperform other European indices, with a +0.08% advance. It’s apparent that investors are pricing in a lot of volatility into sterling in the coming days, with 1-week implied sterling/dollar volatility at its highest levels since March this morning. Meanwhile gilts outperformed sovereign bond markets elsewhere, with 10yr yields down -6.8bps, in their largest one-day decline since June.

Overnight in Asia, equity markets have followed the US lower, with the Nikkei (-0.23%), the Hang Seng (-0.61%), the Shanghai Comp (-0.25%) and the KOSPI (-0.86%) all losing ground. In Japan, Prime Minister Suga announced a new stimulus package worth $708bn as the country grapples with a renewed surge in coronavirus cases, though the measures announced are smaller in size than those seen after two extra budgets earlier this year. It came as revised data overnight showed the country’s economy grew by an annualised +22.9% in Q3, stronger than the +21.4% initially reported. Over in the US meanwhile, S&P 500 futures are also pointing lower, down -0.26%.

On the coronavirus, today the UK will be the first Western country to begin vaccinations, using the Pfizer/BioNTech shot that was cleared in the country last week. The over-80s will be the first to get it, along with workers in care homes and front-line health services. However, though attention will now begin to shift to the distribution of a vaccine, there are still the difficult winter months to get through before widespread vaccinations have taken place. Indeed, Dr Fauci in the US warned yesterday that the Christmas holiday “could be even more of a challenge than what we saw with Thanksgiving”, while Denmark announced a partial lockdown from December 9, with 38 of 98 municipalities seeing the closure of restaurants and bars, while students in grade 5 and above will be sent home. France apparently will not reach the previously set thresholds to lift the country’s lockdown measures, with daily new Covid-19 cases sitting at over two times the targeted level. The Liberation newspaper reported that the government is now considering alternatives to ending the stay-at-home measures on December 15.

There were further stimulus negotiations in the US, where lawmakers from both parties seem set to postpone the originally planned Friday deadline to pass the new bill. The sticking points remain the same as they have been since spring. The delay is also affecting the omnibus bill that would fund the government into next year, though there is a vote set for tomorrow for a one-week continuing resolution to avert a government shutdown. Regardless there was some optimism as House Majority Leader Hoyer noted that “Not getting a deal done, is not on the table from my perspective.”

US Treasuries advanced against this backdrop, and 10yr yields fell -4.3bps to 0.923% having flirted with 1% on Friday afternoon. That coincided with a broader move lower in yields on both sides of the Atlantic, with those on 10yr bunds (-3.5bps), OATs (-3.1bps) and BTPs (-1.5bps) also moving lower. Furthermore, the US dollar (+0.10%) stabilised yesterday after reaching a 2-year low on Friday.

Finally, the only data of note yesterday was German industrial production, which rose by a stronger-than-expected +3.2% in October (vs. +1.6% expected), while the previous month was also revised to show stronger growth. That leaves the year-on-year reading showing just a -3.0% contraction, which is the smallest annual contraction since February, before the pandemic became widespread in Europe.

To the day ahead now, and the aforementioned Brexit negotiations and US fiscal bill will likely remain in focus. Otherwise, the data highlights include the German ZEW survey for December, and from the US there’s the NFIB small business optimism index for November.

A seemingly routine Twitter Q&A involving a candidate running for Manhattan Borough President is making headlines after the (female)  longtime Democrat revealed that working for Gov Andrew Cuomo was by far the “most toxic” job she had ever had.

Lindsey Boylan  worked for Cuomo’s administration from 2015 to 2018, according to her LinkedIn profile. She added that working as a server at a local Friendly’s back when she was a teenager was “an infinitely more respectful environment”, even when customers stiffed her on tips, or behaved in untoward ways.

When she worked for the governor, Boylan said, staffers were generally “deathly afraid of him”, calling him “a total asshole surrounded by enablers”.

Boylan continued: “I’ve had many jobs. Waitressing at Friendly’s as a teenager was an infinitely more respectful environment. Even when I had bad customers who tipped poorly.”

But let’s back up a step: In an age where politicians with national profile have been held accountable by former employees (remember all those stories anointing Sen. Amy Klobuchar as “the worst boss on Capitol Hill”?). If Cuomo is truly so terrible, then why haven’t more of Boylan’s colleagues spoken up?

Lindsey Boylan

The answer: They have been cowed into silence. “If people weren’t deathly afraid of him, they’d be saying the same thing and you’d already know the stories.” She added that “it’s a whole book of people who have been harmed” by the governor (we’re assuming she means they’ve been harmed ’emotionally’. After all, Boylan said that she’s still “unwrapping” the experience years later “in therapy!”.

To try and corroborate her story, Boylan pointed out that the same “small group of white people” has surrounded Cuomo since the beginning, acting like a combination of sounding board and yes-men. For all Cuomo staff outside that group, life working for America’s favorite governor is “endlessly dispiriting.”

Before concluding the thread, Boylan offered the same genuflection of the “privileged” so popular with the left, acknowledging that her time working for governor Cuomo would have been even more unbearable if she hadn’t been able to “opt out” when she did.

“I shudder to think what happens to others”.

Read the full thread below:

Most toxic team environment? Working for @NYGovCuomo. https://t.co/mtM1VYXxSH

— Lindsey Boylan (@LindseyBoylan) December 5, 2020

I’ve had many jobs. Waitressing at @Friendlys as a teenager was an infinitely more respectful environment. Even when I had bad customers who tipped poorly. 

If people weren’t deathly afraid of him, they’d be saying the same thing and you’d already know the stories. 

Seriously, the messages and texts I receive when I speak the truth about this…it’s a whole book of people who have been harmed. 

Don’t be surprised that it’s the same small group of white people sitting alongside him at every presser. The same group that he has had by him the whole time, doing his dirty work. If you’re not one of those handful, your life working for him is endlessly dispiriting. 

I tried to quit three times before it stuck. I’ve worked hard my whole life. Hustled – fake it till you make it style.

That environment is beyond toxic. I’m still unwrapping it years later in therapy! 

And I’m a privileged person. I could opt out and eventually did. I shudder to think what happens to others. It pisses me off so much.  Yes I did not sign whatever they told me to sign when I left. Nope!

* * *

While we would love to take Boylan’s story at face value, there’s reason to take this all with a grain of salt. After all, Boylan has already lost one Democratic primary in NYC running as a progressive outsider taking on the city’s Democratic machine. Maybe she’s hoping that such a high-profile dig at the governor might snowball, expanding her profile and perhaps giving her a fighting chance in her latest race.

Authored by Bill Blain via MorningPorridge.com,

“Rules are made for people who aren’t willing to make up their own”

Why are so many tech stocks defying financial gravity? Tesla, Airbnb, Palantir, Virgin Galactic and others…

(One moment this morning for Chuck Yeager…)

The UK headlines this morning are all about a lovely 90-year old lady in Coventry becoming the first person to be vaccinated against Covid. Ah, bless. Let’s not distract ourselves from the good news, worry about the crisis in the Brexit negotiations, or the fact infections are swelling across California triggering a mass lockdown. According to the stock market momentum, there is – apparently – absolutely nothing to worry about…

There never is… right up to the moment the Iceberg appears on the starboard bow….

Despite my many years in markets I’ve never seen a Christmas bubble pop. Normally, the last three weeks into the end-of-year holidays are very, very quiet from a business perspective. It’s party time. One year I managed a proper lunch every single day in December – putting on multiple kilos. Most nights I was at drinks parties! Ah happy days… my cardiac consultant made a fortune. 

This year is, and feels, very different. We’re all very aware how Central Banks are backstopping Markets through ongoing ultra-low rates and monetary policy like QE Infinity, and that government’s stand ready to provide further stimulus to get us over the pre-vaccine effectiveness darkness before the dawn.

But, I’ve never sensed such a bizarre sense of FOMO driving the market. That’s evident in the headlines about day-trading sites like RobinHood crashing due to volume, and yet more noisy You-Tube proclamations from former taxi-drivers about markets never heading lower, and the extraordinary gains to be made in their favourite stocks. It becomes self-fulfilling. Their momentum is driving the market – and it all makes very little sense with the end of the pandemic support phase in sight next spring.

The moment central banks and governments take their feet off the accelerator is the moment the markets will wobble. That little old lady getting a jab this morning is a sure signal that moment is coming. 

But for now it’s that insane Fear-Of-Missing-Out momentum that is driving belief in certain “story” stocks. Its looking extremely bubblicious. As a said – I’ve never seen a bubble pop over Christmas – and I suspect it won’t as the holiday momentum attracts in the ever greater fools who will be left holding the metaphorical cold turkey come January.

One stock that got me thinking is Airbnb – which IPOs this week. Despite the virus, investors are anticipating a bumper 2021 for Airbnb as repressed travel kicks off again – the deal is now being priced with a valuation of $42bln. Wowser, but? Bear in mind, while many people do go and hire someone else’s house for their vacations, even more still go looking for a cheap 2 weeks in the Sun on a package tour. There was a time when these firms made lots of money – but competition and then the virus means these same mass market holiday firms are going bust at a rate of knots. Remind me why Airbnb is different?

The belief in improbable profits tomorrow (always tomorrow) shows no sign of fading. 

Tesla is up over 15% in the last week – there are rumours of another stock split (on Motley Fool) which would have the effect of persuading yet more greater fools it’s a more affordable buy, which is just more cosmetic lipstick on the pig. Just like its inclusion in the S&P 500 index. Next year, the Telsa punters reckon it will soar higher on inclusion on the Dow. 

Fantastic – except, nothing changes the actual real fundamentals facing Tesla: selling cars in an increasingly competitive market, cutting costs as lithium rises, and actually delivering all its promises on, numbers, self-driving etc. (And btw – we’re currently looking at the installation of Solar Panels and Batteries as part of our house rebuild and not one of the firms responding to our RFP has recommended the Tesla package.) It still hasn’t made a penny profit actually selling cars. 

Writing about Tesla is the market strategist’s equivalent of being sent into a war-zone. You need big shoulders and a flak-jacket to avoid the grenades that will be thrown if you dare to question the sacred beliefs of the Tesla Jihadis. Now that Tesla has become part of the S&P, every index tracker will become a holder. A wider and more conservative holding base may cause more investors to start questioning the assumptions made about the stock, and the frankly absurd beliefs that underly its current valuation. 

I am very familiar with Palantir – Lord of the Rings remains a favourite read, and naming the company after the “seeing stones of Gondor” was a clever allusion to how understanding big data helps perceive the real picture. But, the company has been struggling to turn a meaningful profit after 17-years, meaning it’s not exactly the “innovative, disruptive generator of new future value” that one analyst described.  

A 40x projected revenues valuation is modest compared to the levels the other, younger Software-as-a-service stocks are trading, but yesterday’s 23% gain on news of a rather modest $44mm government contract (where it garners the bulk of its revenues already) is hardly a paradigm shift. Palantir stock has doubled in a month. Following its IPO in September nothing has really happened to change the stock fundamentals – except all the insiders have been able to ditch their holdings. Yet its price has doubled..? What am I missing?

Or, strangest of all, Virgin Galactic, which (unlike its actual spacecraft) soared higher on the news it might actually fly the space plane. The market soared anticipating a successful flight… without any real consideration of what a space tourism business is actually really worth. 

Funnily enough, its Elon Musk who has highlighted the real possibilities of commercial space flights – there are something like 17,000 satellites likely to be launched into Low Earth Orbit in the next 10-years. SpaceX would have been well placed to seize much of that highly lucrative market, but will become a buyer itself to launch its own 12,000 Starlink high-speed internet satellites. (That’s a story for another day.)

While I’m scribbling about Space, I should mention one of the deals I’m leading in our Alternative Investment Business – funding Private Debt and Private Equity deals: 

I have a stand-out VC opportunity in the Satellite launch space: We’re working with a firm with the ability and authorisations to commercialise US Military Tech to become the world’s leading space horizontal launch capability operation, seizing a significant share of the launch market. Not only does it have US and UK support, but will attract investment from the Scottish Government. Based out of Scotland, this new deal will provide the UK with a national space capability the recent defence funding increase called for, plus huge commercial opportunities with upwards of 4x returns! (Email or call for details..)

Or, you could go and buy Galactic Stocks instead, and lob a few tourists into space on an occasional basis… (And yes, I will be happy to contrast what our deal does in terms of what Virgin Orbit does not!)

Why is the market so invested in improbable stories?

• Tech stocks have benefited from Social Media reinforcement – Tesla fans have their faith in the firm constantly validated by the targeted social media posts they receive, reinforcing and building their certainty on the firm. The degree to which social media narratives have overtaken stock market rationality is extraordinary.

• The second factor is success attracts success. At a time of economic pressure and uncertainty the return equations in markets have changed, ultra-low interest rates have forced investors into the equity markets in search of returns – and Tech looks an attractive bet. If every tech firm might just be the next Apple, Amazon or Microsoft, then retail wants in.

• Third – In times of economic hardship, the promise of instant returns and infinite wealth from owning bubblicious Tech stocks are hard to resist – and when every single day-trader is boasting about how much they’ve made from their savvy positions..,, then it sucks in more and more players.. till eventually we get to “Greatest Fool”.. the investor holding the ticking package when it goes pop.  

There are a host of names in the Bubble zone. I suspect a couple will quietly pop, but when a big one goes, or the market redirects itself, then… who knows… No one wants to be the ultimate Greater Fool.

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This is the last week of this year’s charity appeal – raising money for Walking With The Wounded, helping ex-military with mental health issues. My wife and I are Team Morning Porridge. Please read about the charity and make a donation. 

At the close of a blockbuster year for Tesla which saw its shares included in the S&P 500, cementing its reputation as “the only stock that matters” (according to some analysts), the company announced on Tuesday morning yet another $5BN at-the-market share offering. It follows a similarly sized offering back in September (though Tesla’s shares have rallied appreciably since then).

Once again, Musk & Co. are proving that selling Tesla stock is perhaps the most effective and lucrative capital-generating strategy available to the electric-car maker.

TSLA slumped on the news in premarket trading, but if the past is any guide, this dip will soon be bought, despite the fact that Elon Musk himself has repeatedly complained about TSLA’s share price being ‘too high’.

Here’s more from the 8-K announcing the offering:

On December 8, 2020, Tesla, Inc. (“Tesla”) entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., Barclays Capital Inc., BNP Paribas Securities Corp., BofA Securities, Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, SG Americas Securities, LLC and Wells Fargo Securities, LLC, as sales agents (each, a “Sales Agent” and collectively, the “Sales Agents”), to sell shares of common stock, par value $0.001 per share, of Tesla (the “Common Stock”) having aggregate sales proceeds of up to $5.0 billion (the “Shares”), from time to time, through an “at-the-market” offering program (the “Offering”).

Upon delivery of a placement notice and subject to the terms and conditions of the Equity Distribution Agreement, the Sales Agents will use reasonable efforts consistent with their normal trading and sales practices, applicable state and federal laws, rules and regulations, and the rules of the Nasdaq Global Select Market to sell the Shares from time to time based upon Tesla’s instructions for the sales, including any price, time or size limits specified by Tesla. Under the Equity Distribution Agreement, the Sales Agents may sell the Shares by any method permitted by law, including in ordinary brokers’ transactions, in negotiated transactions, in block trades, and in transactions that are deemed to be an “at-the-market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”). The Sales Agents’ obligations to sell the Shares under the Equity Distribution Agreement are subject to satisfaction of certain conditions, including customary closing conditions.

The Equity Distribution Agreement provides that the Sales Agents will be entitled to compensation for their services in the form of a commission of up to 0.25% of the aggregate gross proceeds from each sale of the Shares, and Tesla has agreed to reimburse the Sales Agents for certain specified expenses. Tesla has also agreed to provide the Sales Agents with customary indemnification and contribution rights. Tesla is not obligated to sell any Shares under the Equity Distribution Agreement and may at any time suspend solicitation and offers under the Equity Distribution Agreement. The Equity Distribution Agreement may be terminated by Tesla at any time by giving written notice to the Sales Agents for any reason or by each Sales Agent at any time, with respect to such Sales Agent only, by giving written notice to Tesla for any reason or immediately under certain circumstances, including but not limited to the occurrence of a material adverse change in the company. The Offering of the Shares pursuant to the Equity Distribution Agreement will terminate upon the termination of the Equity Distribution Agreement by Tesla or the Sales Agents.

The sales and issuances of the Shares under the Equity Distribution Agreement will be made pursuant to Tesla’s effective shelf registration statement on Form S-3 (File No. 333-231168) (the “Registration Statement”) declared effective by the Securities and Exchange Commission (the “SEC”) on May 2, 2019. On the date hereof, Tesla intends to file a prospectus supplement with the SEC in connection with the offer and sale of the Shares pursuant to the Equity Distribution Agreement.

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Tesla is working with a syndicate of banks including Goldman Sachs, Citigroup, Barclays Capital, BNP Paribas Securities, BofA Securities, Credit Suisse Securities, Deutsche Bank Securities, Morgan Stanley, SG Americas Securities, LLC and Wells Fargo Securities to sell the new issues.

On an unrelated note, the Internet is still buzzing with reports that Tesla CEO Elon “Take The Red Pill” Musk is finally planning to make good on his stated desire to abandon California for the Lone Star State. There’s no word yet on whether Tesla’s corporate headquarters might be moving with him. It goes without saying that $5BN would go a lot further in most parts of Texas than it will in Fremont, Calif.