U.S. stocks had a record day on Tuesday as the Dow hit 30,000 for the first time. The year has been turbulent for the index, having suffered its three largest single-day drops, ending the bull market that began in 2009, but now recovering to historic heights. Globally, stock markets were relatively muted in reaction to the news. Analysts believe this could be the start of a longer bullish run. 

The Dow:

• Founded in 1896, the Dow has been a standard for the U.S. stock market for almost 125 years. 
• It has survived 24 recessions and the Great Depression. 
• In its first 120 years, the Dow never broke above 20,000. Since the election of President Trump, the markets have continued to break the record. When he was elected, the Dow was at 18,250. It broke 20,000 just days after his inauguration, hit 25,000 just a year later, and has now hit 30,000. 
• Nonetheless, the last three years have been very volatile for stocks due to uncertain policies and unpredictability from the President. 

Time taken by Dow Jones Index to hit every 10,000:

• 103 years to hit first 10,000            (April 1999 - 10,000)
• 18 years to hit second 10,000  (February 2017 - 20,000)
• 4 years to hit third 10,000        (November 2020  - 30000)

International Markets:

• Overnight U.S. futures were relatively stagnant with the Dow down 0.1% while the S&P and Nasdaq are up 0.3%.
• As of 7:30 a.m. ET, the DAX, FTSE 100, and AC 40 in Europe were all flat. 
• In Asia, the Hang Sang closed up 0.1%, Shangai Composite up 1.2%, and the Nikkei up 2%. 

Outlook:

• Analysts believe that the fundamentals of the market are strong. 
• Vaccine news and decreased uncertainty in Washington are also key long-term driving factors. 
• Fears of a potential unified government resulting from the Georgia runoffs could result in a 6-10% decrease in stock prices, according to analysts. However, this would be offset by the likely fiscal stimulus to come from President-elect Biden. 

The International Air Transport Association (IATA) is estimating that the COVID-19 pandemic will cost airlines $157B. The Association explained that as long as quarantines are in place, and individuals are not travelling, airlines will continue to lose money. 

More:

• $118.5B in losses are expected this fiscal year, with an additional $38.7B in 2021. 
• These estimates are far worse than the initial forecasts released in June, which estimated losses of $84.3B in 2020 and $15.8B in 2021.
• The airline industry has been responsible for tens of thousands of job cuts, but the IATA warns that many more jobs are still at risk.  
• It is estimated that by the end of 2020, passenger volume will have fallen back down to levels not seen since 2003. It is not expected to return to pre-pandemic numbers until at least 2024. 

We hope that you have a wonderful Thanksgiving no matter how you are celebrating! Our team will be off on Thursday and Friday but will have an update in your inbox for Monday morning!

Gap Inc. reported revenue of $4B for Q3 2020, similar to last year. Its profit decreased by 32% YoY to $95M. The company’s share price fell by 17% on the news announcement.

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• Gap's online sales grew by 61% and comparable sales increased by 5%.
• The company's brands Old Navy (+17%) and Athleta (+37%) revenue grew compared to last year and contributed to 63% of the company’s revenue. However, it was offset by the reduced sales in GAP (-5%) and Banana Republic (-30%) brands. 
• The company’s share price has increased by 18% since the beginning of this year and currently has a market cap of $10B, compared to Macy’s $3B and Levi Strauss $7.7B.

In other news:

• Dick’s Sporting Goods reported a $2.4B revenue for Q3 2020, up 20% YoY. The company’s profit increased by 300% to $177M.
• The company’s e-commerce sales increased by 95%, and same-store sales increased by 23% as consumers bought more workout gear/equipment and sporting goods.
• Nordstrom reported a $3B revenue for Q3 2020, 16% down YoY, but up 68% over the previous quarter. The company’s profit stood at $53M, compared to a loss of $255M in the previous quarter.

Nikola's share price fell by 10% after its CEO Mark Russell failed to reassure concerned investors about its $2B deal with General Motors. In September, both the companies announced a partnership that would give GM an 11% stake in Nikola. It would also be worth $2B in common stocks in exchange for non-monetary services from GM, including manufacturing the Nikola Badger. If a deal isn't made by Dec. 3, either company could walk away from the deal according to the agreement's terms.

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• Around two days after the initial deal announcement, short-seller Hindenburg Research accused Nikola's founder, Trevor Milton, of making false statements about its technology. They described Nikola as "an intricate fraud built on dozens of lies." Following the report, SEC launched a probe into Nikola. 
• Trevor Milton stepped down as Nikola's executive chairman and from its board on Sep. 21. The lock-in period for his 91.6 million shares of Nikola ends on Dec. 1. 
• GM President Mark Reuss said that they are going forward with the deal as of Oct. 21. 
• Nikola reported a loss of $117M for Q3 2020 and an $86M loss in Q2 2020. The company earned no revenue for Q3 2020, and it earned $36,000 in Q2 2020 from the solar installations for Trevor Milton.
• The company went public on June 4 through SPAC VectoIQ Holdings and its shares traded at around $37 on its IPO, before reaching $79 on June 9. As of today's opening, its share prices were trading at about $29. Currently, it has a market cap of $11B.

The Securities and Exchange Commission proposed new rules that would enable gig works to receive a particular portion of their compensation through stock options. The proposal comes after California voted for Prop 22, which exempts platform companies like Uber from reclassifying their workers as employees.

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• According to the proposal, the stock option would be limited to a maximum cap of $75,000 over three years, and 15% of compensation over 12 months.
• The proposal is subjected to a 60-day public comment period, which would end after the current chairman concludes his tenure by the year-end.
• Public gig economy companies include Uber, Lyft, and GrubHub. Other companies, including DoorDash, Instacart, and Airbnb, have filed for IPOs recently.

QUICK HITS:

• An algorithm that analyzes Twitter comments and invests in crypto is beating the S&P.*
• Record low mortgages caused an increase in demand for home purchasers. 
• The FDA approved a new COVID-19 test to measure antibodies. 
• Energy stocks are on track for a historic month. 
• Elon Musk is looking into a hatchback Tesla for European markets. 
• Venture capitalist Tim Draper claims that as healthcare is digitalized, it could become "almost free."