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Tech short sellers; Soros IT stock buys; COVID-19 vaccine battles

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Tech short sellers; Soros IT stock buys; COVID-19 vaccine battles

Welcome to Next, a weekly newsletter highlighting some of our unique news and research on how technology is reshaping the future of industries across global markets. As part of our expanded cross-sector tech coverage, we will curate some of our best insights and features on topics such as artificial intelligence, internet of things, cybersecurity, 5G, smart cities, autonomous vehicles, clean energy, telehealth and financial technology.

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Top news

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While technology stocks have had a few bad days of late, the S&P 500 Communication Services index — which features the likes of Facebook, Alphabet and Netflix — still managed a gain of 9.1% through the first half of November, only slightly worse than the broader S&P 500 index. But short sellers are betting that trend will change and are increasing their positions in technology companies after the sector drove equities' recovery from the pandemic.

Meanwhile, the IT sector was an area of focus for Soros Fund Management LLC, the family office of George Soros, in the third quarter, comprising four of the six largest common stock initiations excluding exchange-traded funds. Palantir Technologies, which began trading on the NYSE on Sept. 30, was the top entry by far.

In healthcare, Pfizer, along with partner BioNTech, and Moderna have each found their vaccines to be about 95% effective. But the ideal coronavirus vaccine will be a single shot that is effective, easy to ship, stable at room temperature and have low side effects, especially in vulnerable populations. No single candidate has checked all of those boxes despite strong efficacy data coming from the two front-runners.

Chart of the Week

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Cable getting 'a little more aggressive' on wireless

All told, the top three publicly traded U.S. cable companies — Comcast, Charter and Altice USA — added 568,000 wireless lines during the third quarter, up from 495,000 in the year-ago period. The results propelled some of these cable wireless offerings to break-even status earlier than expected.

Tech, Media and Telecom

Outages at Office 365, Zoom, others made telecommuting tough last week

Technical problems at Microsoft, Discord, Zoom and Verizon made working from home harder last week for some telecommuters. The number of outages among internet service providers rose 29% during the week between Nov. 7 and Nov. 13, according to performance data from network-monitoring service ThousandEyes, which counted 257 outages worldwide among ISPs compared with 200 the week before. The number of outages in the U.S. rose just as quickly, rising to 104 from 81 the previous week.

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FCC opens up more Wi-Fi spectrum, supports new connected auto technology

The Federal Communications Commission adopted new rules for the 5.9 GHz band, which has historically been reserved for Dedicated Short-Range Communications, a technology intended to make the nation's transportation systems smarter and safer. However, with the technology remaining largely undeployed, the agency decided that spectrum could be better used for other services. Specifically, the new band plan adopted by the FCC designates the lower 45 MHz of the band for unlicensed uses, such as Wi-Fi.

Parler parlays conservative frustration with Facebook, Twitter into usage surge

The political debate over content moderation practices at Facebook and Twitter has sent some prominent conservatives to Parler — a social network touted as an ideological alternative to those platforms. But analysts doubt Parler's new high-profile users will diminish the popularity of the dominant platforms anytime soon.

Healthcare

Pfizer, Moderna lack key features for a winner-take-all COVID-19 vaccine

Vaccines from Pfizer and partner BioNTech SE and from Moderna are each about 95% effective. While both have cold storage requirements, Pfizer's candidate must be stored in ultra-low freezers that reach -70 degrees Celsius for long-term storage. Moderna's vaccine is stable for longer at higher temperatures and can be stored in a regular refrigerator. Both require two doses.

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Pfizer may be 1st to file for COVID-19 vaccine, but profits likely short-lived

Despite the likely distinction of being the first company to file for an emergency use authorization for a COVID-19 vaccine, Pfizer is unlikely to see tremendous profits from the vaccine on a scale that could "move the needle" for the pharmaceutical giant.

Global Markets

Tech short sellers poised for rotation as vaccine buoys value stocks

Tech short sellers are still waiting for their payday. Short interest in U.S. communication services stocks rose to 4.7% at the end of October, leaving them third among the 11 S&P 500 sectors, behind only consumer discretionary and healthcare, the latest S&P Global Market Intelligence data shows. Bets against those companies have risen by 1.3 percentage points since the end of March, the most of any sector during the pandemic.

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Soros loads up on IT stocks, sells banks in Q3

Soros Fund Management LLC, the family office of George Soros, initiated several positions in information technology stocks and exited multiple banks during the third quarter.

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Energy

Bezos climate fund targets hard-to-tackle sectors, environmental justice

Amazon.com CEO Jeff Bezos' initial round of nearly $800 million in climate-focused grants and investments aims to tackle emissions from the transportation, industrial and agriculture sectors, protect forests and other ecosystems, and address environmental justice and racial equity issues. More than half of the total first round of funds is going to major advocacy groups.

Renewable energy forum panelists say regional markets key to future

Competitive power markets and regional cooperation are key to the U.S. reaching a clean energy future, industry leaders and experts said during a recent web-based forum.

Top Research

Lufax IPO a bright spot among battered digital lender stocks

Lufax Holding Ltd. may have had a rocky public debut, but the Chinese company is unlikely to join the growing list of underperforming digital lending stocks in the U.S. The company's subsequent recovery and premium valuation compared to Chinese peers reflect its strong fundamentals and close ties with a large Chinese financial conglomerate: Ping An Insurance (Group) Co. of China Ltd.

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From Panjiva, a business line within S&P Global Market Intelligence:

FedEx, Dell partner to provide web of edge data centers, services

FedEx, Dell and Switch are partnering to build a series of data centers across the U.S. for supporting low-latency edge workloads. FedEx will provide the real estate and become the first customer, while Switch will build the datacenter infrastructure and Dell Technologies will provide cloud computing, storage, networking and support services.

From Kagan, a media research group within S&P Global Market Intelligence:

Global game console growth moderated in Q3'20 as pandemic's effect ebbed

Global game console shipments grew 8.9% year over year to an estimated 9.2 million in the third quarter of 2020, a muted showing compared to the prior quarter's 50.6% growth rate. Vendors reported that pandemic-driven demand persisted, but the effect appeared to have lost its edge as many consumers returned to work and school.

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OTT helps to offset pay TV losses for video security vendors

While pay TV subscriber losses are impacting video security revenue from the pay TV portion of the market, the rise in over-the-top streaming increases the need for video security in the OTT segment. Kagan forecasts that worldwide video security vendor revenue will see a slight rise from $1.0 billion in 2020 to $1.1 billion in 2024.

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Upcoming events

M&A in Focus: Sustainable Corporate Development Trends

11:00 a.m.–12:00 p.m. EST on Thursday, Dec. 1, 2020

Environmental, social and governance (ESG) issues are coming to the forefront as companies attempt to understand the impacts, harness data to drive performance and achieve M&A success.

The global pandemic has merely uncovered one part of the ESG picture. Forwarding-thinking companies are now reassessing their growth strategies and sharpening their analyses. The SAM Corporate Sustainability Assessment (CSA), in use since 1999, has been a useful tool and methodology for companies of all sizes developing comprehensive sustainability plans.

In this webinar, S&P Global experts will discuss the latest corporate development trends observed from CSA data analysis and how companies are including ESG analysis in their M&A strategies.

REGISTER TODAY

Want to hear more?

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Click here to listen to the latest episode of "MediaTalk," an S&P Global Market Intelligence podcast. In this edition, software reporter Anser Haider, Kagan analyst Neil Barbour and 451 Research analyst Ian Hughes discuss the current state of the video game industry, which is on the cusp of a brand-new generation of hardware, software and services.