Stocks Roar Higher With Tech ~Flat

Catch Up Quick

• Pfizer's coronavirus vaccine prevented >90% of infections in its first 94 subjects

• BofA reports 67% of S&P 500 companies have exceeded earnings estimates

• The head of Trump’s effort to challenge election tested + for coronavirus

• G. Bush congratulated Biden on victory, says “election was fundamentally fair”

• Alex Trebek, the infamous longtime host of “Jeopardy!” passed away at age 80

• The U.S. reported >100K since Wednesday as nationwide cases top 10M

• Joe Biden named a 12-member task force to combat the coronavirus

• The U.S. economy added more jobs than expected last month at 638K

• Berkshire Hathaway bought back a record $9B in stock this past quarter

• Bentley Motors plans to exclusively offer electric vehicles by 2030

• 40 North reportedly offered to buy W.R. Grace & Co. for $4B in cash

• After many clashes, Trump fires Defense Secretary Mark Esper

Thought of the Day

• DraftKings ($DKNG) reports its Q3 earnings this upcoming Friday (November 13th), while shares of the Boston-based sports betting platform are in an interesting spot leading up to the conference

• As the sports betting & gaming realms show promising growth trajectories, on election night, Maryland, Louisiana & South Dakota all voted to approve legal sports betting in 2021

• From a volume perspective, momentum appears to be a potentially continuous tailwind, as more buyers have entered the equity in the past few days relative to entry in the broader market

• Additionally, while Wall Street tends to like the stock (13 buy ratings & 6 hold ratings among major firms), it trades at just 66% of its 52 week high

• The recent sell off appears to be driven by subpar MLB & NBA viewership, given the drawdown timeline aligns closely with when this data was recently published

• It’s thus possible that investors are wrongfully establishing a high correlation between the aforementioned and DraftKings user numbers, given one doesn’t actually have to watch the entirety of a game to hold bets on it

• Lastly, with the NFL regular season now in full swing, the app could be a huge beneficiary, given football is the most popular sport among fantasy leagues

The Bottom Lines

• Granted we don't have any Q3 sector fundamental insight from public comparables with recent earnings, these situations are notoriously hard to predict

• However, the above points alone are grounds for further investigation

• Buying and holding solely for an earnings release is highly risky for obvious reasons, though the volatility in the couple days leading up to it may provide a nice short term return potential without directly bearing the risk of an unexpected miss