Dow component Johnson & Johnson (JNJ) is due to report third quarter 2020 earnings in Tuesday’s pre-market, with analysts expecting earnings per share (EPS) of $1.98 on revenue of $20.15 billion. The stock barely budged after the company beat second quarter estimates and raised guidance in July, and it is now trading just three points higher. More importantly, the stock has gone absolutely nowhere since recovering first quarter losses in April, stuck in a trading range between $135 and $155.

Key Takeaways

  • Johnson & Johnson is defending at least 19,000 baby powder lawsuits.
  • The stock has been stuck in a trading range for more than two and a half years.
  • Price action has recovered first quarter losses on weaker-than-expected buying volume.

The drug manufacturer has been a Dow laggard since topping out above $148 in January 2018, adding just four points between then and now. A generous dividend yield has eased shareholder pain while the company works through 19,000 lawsuits alleging illnesses caused by its talc-based baby powder. Bloomberg just reported that Johnson & Johnson will pay over $100 million to end over 1,000 legal actions, telling us that the company will be dealing with this headwind for years to come.

Johnson & Johnson is also developing a COVID-19 vaccine, reporting good results in a Phase 2 clinical trial in September. However, the CEO recently stated that a commercial vaccine isn’t likely until next year, even though competitors will be rushing their compounds to market to increase acceptance and profitability. It’s hard to tell if the tortoise or the hare will win this battle, given the high risk of rejection by a skeptical public.

Wall Street is showing little interest in the lawsuits, posting a “Strong Buy” rating on Johnson & Johnson shares based upon seven “Buy” ratings, with no

By Swati Bhat

MUMBAI, Oct 9 (Reuters)The Reserve Bank of India assured bond markets on Friday that it stands ready to take whatever measures are necessary to ensure adequate liquidity in the banking system, sparking a sharp rally.

The RBI said it will conduct on-tap long-term repo operations, open market purchases of bonds and special open market operations (S-OMOs), and also provide the increased held-to-maturity limit to banks until March 2022 versus March 2021.

“For the bond market, this is like an early Diwali and just as the March policy (decision) was termed a bazooka, there is enough today to light up some fireworks,” said Arvind Chari, head of fixed income and alternatives at Quantum Advisors, referring to the Hindu festival of lights which falls next month.

The benchmark 10-year bond yield IN057730G=CC dropped as much as 10 basis points to 5.92% on Friday. The measures were announced alongside a monetary policy committee decision.

The MPC kept rates on hold as predicted while keeping policy stance accommodative to help pull the coronavirus-ravaged economy out of its worst slump in four decades.

Bond markets have been stressed in recent months by the government’s record 12 trillion rupee ($164.16 billion) borrowing program and higher borrowing requirements by states.

“In order to impart liquidity to state development loans (SDLs) and thereby facilitate efficient pricing, it has been decided to conduct OMOs in SDLs as a special case during the current financial year,” RBI Governor Shaktikanta Das said, adding these and other measures should ease fears about illiquidity.

Market participants had complained of a lack of clarity on what measures the RBI would take, amid fears the government could further increase borrowing in the last quarter if revenues remained weak.

“We look forward to cooperative solutions for the borrowing programme for

The tendency for investors to allocate too much of their capital in their home markets is called domestic bias and is a well-known phenomenon. For U.K. investors who’ve stuck with indigenous equities in recent years, this proclivity has cost them dearly.

The U.K. investment industry manages about 8.5 trillion pounds ($11 trillion), more than three-quarters of which is on behalf of local customers, according to figures compiled by the Investment Association, a trade body. For the past five years, the geographical asset allocation of the group has barely budged, and domestic holdings have remained stuck at about 30%, compared with 23% in Europe and 22% or less in North America.  

That ignores a significant shift in how important — or unimportant — U.K. stocks are to the global equity market. While British equities have remained the third-biggest geographical component of the MSCI World Index, their share has decreased dramatically, to less than 4.5% from about 7.5% in 2015. That’s even as the contributions of Japan and Switzerland, respectively the second- and fourth-biggest participants, have declined much more modestly.

The big winners have been U.S. stocks, driven by outsized gains in the values of the region’s biggest technology companies in recent years. Hence the Norwegian sovereign wealth fund’s announcement a few weeks ago that it’s been missing out by not having enough of its money in the U.S. market, and intends to shift 6.5% of its equity portfolio — more than $50 billion — to North American stocks.

The returns available from U.K. stocks in recent years have also lagged those available elsewhere. Including dividends, the benchmark FTSE 350 index has delivered less than 15% since 2015, compared with more than 60% from the MSCI World Index and more than 80% from the S&P 500 index.

On an annualized basis, that

Despite being given the OK to reopen their doors, San Francisco movie theaters will remain closed.

In a statement to The Hollywood Reporter, the California and Nevada chapter of the National Association of Theatre Owners (NATO CV/NV) said San Francisco theaters have elected to remain closed due to a ban on the sale of concessions.

Additionally, limits on seating capacity also are a concern for theaters in the area, one of the nation’s largest moviegoing markets.

“While NATO of CA/NV and its members are grateful that San Francisco city officials are reopening theaters in the city, their proposed solution makes it economically impossible for our members to reopen and significantly limits the moviegoing experience for our audiences,” the chapter said in a statement.


San Francisco movie theaters have elected to remain closed due to the ban on the sale of concessions. (Getty Images)

Of course, the announcement is a blow to the box office as studios hope business bounces back by the end of the year, in time for potentially lucrative properties such as “Death on the Nile” and “Wonder Woman 1984.”

“While we respect and thank [San Francisco] Mayor [London] Breed for her decision to allow movie theaters to reopen, the restrictions in place present an insurmountable financial challenge for our members to do so and are preventing thousands of workers from returning to work,” NATO CA/NV’s Milton Moritz said in a statement.


He added: “Our members have taken the steps to meet or exceed expert-backed health and safety measures, and we

By Stephanie Kelly

NEW YORK, Oct 8 (Reuters)Red River Biorefinery in Grand Forks, North Dakota, came online in April, arguably the worst time for an ethanol facility to begin operating as the coronavirus pandemic sank fuel demand.

Instead of shutting like many ethanol facilities, the company switched focus from producing fuel ethanol to making high-grade alcohol for hand sanitizer, where demand surged during the pandemic as Americans scrambled to protect themselves against the coronavirus.

Red River and several other companies now view the hand sanitizer market as more than a temporary salve for weak fuel demand, making permanent investments in production of high-grade alcohol that meets standards for producing sanitizer.

In recent months Pacific Ethanol PEIX.O, Green Plains GPRE.O and Highwater Ethanol HEOL.PK have said they will boost capacity for high-grade alcohol.

“Our intent when we first went live was to be purely in the fuel market,” said Red River President Keshav Rajpal. “There’s been a huge shift in supply and demand instantaneously. When that happens, in our case margins compared to fuel ethanol are much higher in this space.”

Globally the hand sanitizer market was valued at $2.7 billion in 2019, with North America accounting for a third of the market’s revenue share, according to Grand View Research, a consultancy.

The flurry of announcements indicate some producers see more profitability in hand hygiene because of the pandemic than in transportation fuels. Corn-based fuel ethanol demand tends to track closely to gasoline consumption, as U.S. law requires it to be blended into the fuel.

As of January, U.S. fuel ethanol production capacity totaled 17.4 billion gallons per year, EIA said, up from 2019’s 16.9 billion gallons per year.

Fuel ethanol production nationwide has rebounded from the spring, hitting 923,000 barrels per day from 537,000 bpd in