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DraftKings Shares Jump After Michael Jordan Joins Its Board

Sep. 02, 2020 1:19 PM ET
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  • Stocks were higher to start Wednesday with the Dow rising 250 points, or 0.9%.
  • The S&P 500 advanced 0.6%, while the Nasdaq traded just above the flatline.
  • “This is a virus that’s established itself into the population.”.

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Plus, ADP said private payrolls grew by just 428,000 in August, and Macy’s shares are up even after posting a loss as online sales jump 53% in its most recent quarter.

Stocks were higher to start Wednesday with the Dow rising 250 points, or 0.9%. The S&P 500 advanced 0.6%, while the Nasdaq traded just above the flatline.

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ADP said U.S. private payrolls grew by just 428,000 in August, well below the gain of 1.17 million economists had expected. “Job gains are minimal, and businesses across all sizes and sectors have yet to come close to their pre-COVID-19 employment levels,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. Peter Boockvar, chief investment officer at Bleakley Advisory Group, added that the pace of hiring “has really slowed down over the past two months where the average is just 320k. This print makes Friday’s BLS report really interesting because not only was the private sector BLS July print 1.46 million, but the August estimate is 1.29 million, well different and well above than what ADP has said.”

Treasury Secretary Steven Mnuchin said the U.S. economy urgently needs additional fiscal stimulus to fully rebound the coronavirus pandemic. “What is most important is that we deliver some relief quickly to the American workers impacted by this,” Mnuchin said at a House Select Subcommittee on the Coronavirus Crisis hearing. Following the hearing, Mnuchin called House Speaker Nancy Pelosi, though Pelosi said the two failed to bridge the chasm between their proposals for more coronavirus relief. “Sadly, this phone call made clear that Democrats and the White House continue to have serious differences understanding the gravity of the situation that America’s working families are facing,” Pelosi said in a statement.

As confirmed coronavirus cases in the U.S. rise to nearly 6.1 million, cases are spiking in places like Iowa and South Dakota, signaling what could be a new phase in the nation’s virus fight as progress in one state is repeatedly offset by infections in others. “It’s going to be kind of this rolling fire, with certain flare-ups that occur in different parts of the country at different times,” said Amesh Adalja, a senior scholar at the Johns Hopkins University Center for Health Security. “This is a virus that’s established itself into the population.” Former FDA Commissioner Dr. Scott Gottlieb said today that as cases continue to rise, communities should prioritize reopening schools for in-person learning over reopening indoor entertainment like movie theaters. “We need to be circumspect about what we open while we’re trying to open schools,” Gottlieb said. “Our priority should be to get the schools open and do that safely and not have outbreaks in communities that could put pressure on the schools to have to close. … I would have like to have seen more local communities open schools, do that successfully, and then we can incrementally open these kind of indoor entertainment venues if we’re successful in keeping the infection rates down as the schools reopen. That really needs to be our priority right now.”

Macy’s shares are up nearly 3% this morning after the department store chain reported stronger-than-expected growth in online sales. Macy’s posted a loss per share of $0.81 on revenue of $3.56 billion, versus a loss of $1.77 per share on revenue of $3.48 billion expected by analysts, even as its digital sales rose 53% year-over-year as more shoppers visited its website to buy workout clothes and home goods. Interim CFO Felicia Williams said Macy’s is anticipating “slightly stronger digital growth and slightly weaker store recovery given some of the disruption around the country” in the months ahead. Macy’s CEO Jeff Gennette also told analysts that the company plans to rollout some smaller stores away from malls in the future. “We continue to believe that the best malls in the country will thrive,” Gennette said. “However, we also know that Macy’s and Bloomingdale’s have high potential [off]-mall and in smaller formats.” The department store chain has plans to test several smaller Macy’s stores, and one Bloomingdale’s store, outside of shopping malls, Gennette said, and is also looking to grow its off-price business through Macy’s Backstage.

And DraftKings shares are up 4% today after the company said basketball great Michael Jordan is joining it as a special advisor to its board of directors, and will have an equity interest in the company. Jordan is expected to offer DraftKings his expertise on sports company strategy, product development, diversity, equity and belonging, marketing activities, and other key initiatives. “While the immediate financial impact is hard to measure, we see this development benefiting [DraftKings] by associating its brand with the U.S. most revered living athlete,” said Oppenheimer analyst Jed Kelly of the deal, adding that it offers “opportunities to work even closer with the NBA; and we see the Jordan legacy tying itself to [DraftKings] as validating legalized online sports betting as a mainstream industry while more states look to legalize sports wagering.”

Stocks We’re Watching

Jounce Therapeutics Inc (NASDAQ: JNCE): Jounce Therapeutics shares jumped as much as 77% yesterday after the company announced an agreement with Gilead Sciences to exclusively license Jounce’s JTX-1811 program, a monoclonal antibody designed to selectively deplete immunosuppressive tumor-infiltrating T regulatory (TITR) cells. “Gilead’s investment in Jounce and, specifically, JTX-1811 reinforces the value of our Translational Science Platform and differentiated and sustainable approach to novel immuno-oncology programs, focused on patients with cancer who have yet to benefit from immunotherapy. We look forward to seeing JTX-1811 progress to the clinic,” said Richard Murray, PhD, Chief Executive Officer and President of Jounce Therapeutics. “Our mission to deliver the right immunotherapy to the right patient population for meaningful and long-lasting benefit remains at the core of our discovery and clinical development work. Our JTX-1811 program is a prime example of these efforts.”

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