Major indices in the US stock markets closed higher on Monday mainly driven by positive economic data, the progress on the $1.9 Trillion stimulus package and the news around the COVID-19 vaccine.
At market close, the Dow Jones was up 1.95%, the Nasdaq 100 closed 2.89% higher while the S&P 500 was up 2.38%. The highlight of the day was Zoom Video Communications Inc. which released its earnings after the markets closed.
US House of Representatives Approve $1.9T COVID relief
The US House of Representatives on Saturday passed the $1.9 trillion Covid relief package proposed by President Joe Biden’s administration.
After being forwarded to the Senate through budget reconciliation, the Democrats will be able to pass the bill without Republican support in order to fast-track the final approval.
The United States Food and Drug Administration (FDA) on Friday approved the third jab of a covid vaccine developed by Johnson & Johnson for emergency use.
According to media reports, the jab makes the vaccination process less challenging than in the case of the vaccines produced by Moderna or Pfizer, as it requires a single dose, and doesn’t need to be stored at ultra-low temperatures.
The Chinese National Medical Products Administration granted conditional market approval to a recombinant novel coronavirus vaccine that requires only one shot.
According to Xinhua, the vaccine is China’s first approved vaccine relying on adenovirus to “deliver the coronavirus spike gene” into the cells. The vaccine was developed by Chen Wei, “a researcher at the Institute of Military Medicine.”
Zoom video communications on Monday reported its full-year earnings results with revenue skyrocketing by 326% to $2.6 billion for the full year ended Jan 2021. Net income for the period rose 5097% to $659 million with earnings per share rising 2400% to $2.25.
Total revenue for the fourth-quarter was up 369% to $882.5 million while net income for the quarter was up 2316% to $256.1 million.
“The fourth quarter marked a strong finish to an unprecedented year for Zoom. In FY2021, we significantly scaled our business to provide critical communications and collaboration services to our customers and the global community in response to the pandemic.” said Eric S. Yuan, Founder and CEO of Zoom.
Zoom shares rose by as much as 21% in the after-hours trading, selling for $453.81.
Warren Buffet Letter & Berkshire’s Earnings
The Oracle of Omaha on Saturday released his annual letter to Berkshire Hathaway shareholders, telling investors to “Never bet against America”
The annual letter is usually closely watched by market participants and Buffet has written the letter for six decades and in the latest one, he advises investors on the value of investing in the long term.
At the same time, Berkshire Hathaway released its earnings with operating income for the fourth quarter rising by 13.6% to $5.02 billion from the $4.42 billion reported in the same period a year ago. Full-year operating earnings fell to $21.92 billion.
Berkshire Hathway also announced it repurchased $9 billion of its own stock in Q4 alone and for a record of $24.7 billion for the entire 2020. The firm’s interests in the railroad, utilities, and energy sectors rose from $1.87 billion to $2 billion in Q4.
“Berkshire has repurchased more shares since year-end and is likely to further reduce its share count in the future,” Buffett said in the annual shareholder letter.