Top US stocks: Bank, energy and automotive shares

Bank and energy stocks are on course to open lower today, US regulators open a probe into the safety of 30 million vehicles, Pfizer pushes for 5 to 11 year olds to be vaccinated, CVS Health looks to hire 25,000 new workers, and Colgate-Palmolive gets upgraded.

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Bank and energy stocks

US bank and energy stocks were trading lower in pre-market trade as markets digest concerns over the pace of the economic recovery and prepare for the upcoming Federal Reserve policy meeting this week.

Banks including JPMorgan Chase, Morgan Stanley and Bank of America were all following US treasury yields lower, while oil stocks including the likes of Occidental Petroleum and Laredo Petroleum were also tracking lower oil prices, prompted by fears of a slowdown in the economic recovery and worries over China’s property market following the crisis at Evergrande. Oil was also reacting to more output coming online after operations in the Gulf of Mexico restarted after being shutdown by recent hurricanes.

Eyes are on whether the Fed will start laying the ground work for tapering to begin when it meets on Wednesday, which would see it start withdrawing monetary stimulus at a time when inflation is rising and the job market is improving, although many are expecting for a firm announcement to be made in either November or December.

Automakers

US regulators have opened a probe into the safety of 30 million vehicles made by a dozen automakers over concerns they are fitted with faulty air bag inflators made by Takata, reports from Reuters on Sunday revealed.

The National Highway Traffic Safety Administration opened the investigation on Friday into cars made between 2001 and 2019. The report said the impacted automakers had been informed and that the probe has not yet been made public. It is not the first-time concerns over Takata air bags have prompted regulators into actions, with over 100 million cars recalled worldwide over the last decade.

The cars subject to the latest probe have been produced by Honda, Ford, Toyota, General Motors, Nissan, Subaru, Tesla, Ferrari, Mazda, Daimler, BMW, Chrysler, Porsche and Jaguar Land Rover.

Pfizer

Pfizer and its German partner BioNTech said the latest trial results have shown their Covid-19 vaccine provides effective protection in 5 to 11-year olds.  

The pair said the jab prompted a similar response in what it saw in 16 to 25-year olds, although they were given a lower dose, and that this provides the evidence needed to approve giving jabs to younger children. It is the first trial to look at the effectiveness of a Covid-19 vaccine in children under 12 years old.

‘Since July, pediatric cases of COVID-19 have risen by about 240 percent in the US – underscoring the public health need for vaccination. These trial results provide a strong foundation for seeking authorization of our vaccine for children 5 to 11 years old, and we plan to submit them to the FDA and other regulators with urgency,’ said Pfizer CEO and chairman Albert Bourla.

CVS Health

Pharmacy chain CVS Health is aiming to hire 25,000 new workers across the US during a one-day virtual career event day this Friday.

The company said the ‘new and exciting positions’ will help the company ramp up capacity ahead of the winter season when the rate of flu and Covid-19 vaccinations will increase. It is hiring both permanent and temporary staff, mostly licensed pharmacists, trained technicians and nurses. It is also looking for retail staff to help with inventory and serving customers in-store.

CVS always hires additional staff ahead of the flu season but has stepped up efforts this year to deal with the additional pressure anticipated from Covid-19.

Analyst Recommendations: BorgWarner, Evoqua Water and Colgate-Palmolive

BorgWarner was cut to Hold from Buy by Jefferies, which also cut its price target to $47 from $55 on concerns about rising input costs.

Stifel raised its price target on Evoqua Water Technologies to $45 from $41 on the belief the stock has potential as it looks to deliver more sustainable solutions to recycle and reuse water.

Colgate-Palmolive was upgraded to Buy from Hold by Deutsche Bank yesterday, stating that concerns about the company’s ability to handle inflation was already priced-in.

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