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Global stocks waver, crypto rises as U.S. reopening and Pfizer pill make travel possible again

November 8, 2021, 10:32 AM UTC

Good morning, Bull Sheeters.

I’m Ian Mount in Madrid, helping out Bernhard this morning. He wrote the essay, I’ve done the rest. He’ll be back in the driver’s seat tomorrow morning.

What’s going on?

Most markets are treading water after European and U.S. bourses again hit highs last week.

Crypto bulls are piling into Bitcoin, Ethereum and even Dogecoin (up 12% over the last 24 hours). However that other joke dog coin, Shiba Inu, is down. Again.

Also, the U.S. has reopened its borders to vaccinated visitors from Mexico, Canada, and Europe, giving travel companies hope for the future.

But first, let’s see what’s moving the markets this morning.

Markets update


  • We start the week with mixed markets in Asia. The Nikkei and the Hang Seng both fell about 0.4%, while the Shanghai Composite posted a 0.2% gain.
  • Investors are punishing the dollar bonds of China’s property companies, even the stronger ones, after the Scenery Journey unit of troubled Evergrande missed a payment Saturday.
  • Chinese vaccine makers were down as investors bet that Pfizer’s apparently highly effective COVID antiviral pill would reduce demand for vaccines. Cansino Biologics dropped 17% and WuXi Biologics, which makes ingredients for British vaccine giant AstraZeneca, fell by nearly 9% in Hong Kong.
  • Pfizer’s pill was good news for the reopening trade, however, with casinos, airlines and even luggage up in Asia (Samsonite rose 14% on the day).
  • SoftBank reported a $7.3 billion loss today, due to a plunge in the value of Vision Fund investments in firms like Alibaba and Didi Chuxing hit by Beijing’s crackdown.


  • The European bourses were dead calm at the open, with the Stoxx Europe 600 down 0.1% two hours into the trading session. The benchmark closed out last week in record territory.
  • Shares in airline group IAG were down 2% in London after a two week run-up in advance of the U.S. reopening to vaccinated European visitors today. Pre-COVID, the London Heathrow-New York link generated $1 billion a year for IAG’s British Airways brand. That’s the world’s most lucrative air link.


  • U.S. futures point to a flat open. That’s after all three major averages, and the small-cap Russell 2000, pulled off a fifth consecutive week of gains.
  • Shares in Berkshire Hathaway were down a smidge after the conglomerate reported on Saturday—yes, Warren Buffett prefers to report financials on Saturdays—and delivered a surprise bottom-line miss as its stock portfolio underperformed last quarter.
  • Tesla shares are set to open down 7% on Elon Musk’s Twitter poll plan to sell a tenth of his stake.
  • Earnings calls dominate the calendar this week. We have: Paypal (today), Coinbase tomorrow and Walt Disney and Oracle on Wednesday.


  • Gold is flat, trading above $1,800/ounce.
  • The dollar is flat too after another solid week of gains.
  • Crude is up about 1% as the traders await President Joe Biden’s decision on tapping into the U.S. Strategic Petroleum Reserve in the face of the refusal of OPEC+ to boost output. Brent trades around $83/barrel.
  • Bitcoin is up almost 7% over the last 24 hours, trading around $66,000.


Break out the beats

We’re in the final stretch of earnings season. As of Friday’s close (so this doesn’t count Berkshire Hathaway), 89% of S&P 500 companies had reported their quarterly results.

How is Corporate America doing?

Right now, very well. A full 81% of S&P companies have delivered earnings’ beats, according to FactSet, and 75% gave investors a top-line revenue beat as well.

With regards to earnings growth, this has been the best quarter in 11 years.

As far as top-line performance goes, the revenue-growth-rate average (+17.4%) is running roughly 3X above the five-year average of 5.8%. Wall Street was expecting a big year-on-year improvement in sales—of course they were; last year was awful—but these quarterly results are still really impressive.

And, in case you haven’t noticed, it’s good to be the CFO of a company that’s crushing earnings. “The market is rewarding positive earnings surprises more than average,” writes John Butters, FactSet senior earnings analyst. It’s also “punishing negative earnings surprises more than average,” he adds.

Now for the less good news. What CFOs are telling us about the quarters to come isn’t great—to put it mildly.

So far, 67 S&P companies have shared their guidance for Q4 and beyond. Of them, 41 have given negative guidance, FactSet tallies. In other words, there are a lot of CFOs who see choppier waters ahead.

Similarly, BofA Securities has been analyzing this batch of Q3 results, and it doesn’t like what it sees on the horizon. It calculates that global EPS (earnings per share)—being “global”, this measure would also take into account firms outside the S&P 500—is headed for a fall in the coming quarter.

To underscore that, BofA notes that companies are sounding less bullish about the future. BofA uses A.I. software—specifically, natural language processing—to measure corporate sentiment. These NLP algorithms, they write, are detecting a lot of bearishness in a measure BofA calls “corporate sentiment.”

“Corporate sentiment further declined so far this quarter to the lowest level since 2Q20,” writes Savita Subramanian, BofA’s equity and quant strategist. “The sentiment score has been highly predictive of the following quarter’s earnings growth YoY… and points to slowing earnings growth ahead.”

If you listen closely to what companies are saying, they’ve got doubts about Q4 and beyond.


Bernhard Warner

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Market candy

$14.6 billion

That's how much Facebook—erm, soon to be Meta—invested in share-buybacks last quarter. As I've documented a lot here, 2021 has become the year of the share-buyback. But it's a fairly uncommon practice for Facebook, my colleague Jessica Mathews charts. In her latest column, she also details why Wall Street is pretty excited about all this metaverse mumbo-jumbo, and she's got the goods on the upcoming IPO calendar.

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