The Dow has its biggest loss since October

By CNN Business

Updated 7:33 p.m. ET, January 27, 2021
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8:52 a.m. ET, January 27, 2021

2020 was amazing for stocks. Will 2021 be able to keep up?

From CNN Business' Anneken Tappe

2020 was a bombastic year for the stock market. But can the rally continue this year?

Ray Dalio of Bridgewater Associates doesn't think 2021 will be as buoyant for stocks as last year was, he said on a digital panel at the Future Investment Initiative conference in Saudi Arabia.

BlackRock (BLK) CEO and chairman Larry Fink agrees 2021 won't be as opulent as last year, even as the long-term conditions for investors are still favorable.

"Some of the expected recovery [in the economy] is already priced in," said Dr. Thomas P. Gottstein, CEO of Credit Suisse (CS), at the event. But the low interest rate environment means that stocks will continue to be more attractive for investors than other investments, such as bonds.

Meanwhile, the pickup in deficits as governments spent big to fund stimulus programs will mean that countries such as the United States will have to sell more bonds.

"I don't believe there is enough demand for those bonds," Dalio said, so the Federal Reserve might have to step in to buy more bonds to bridge the gap.

Elsewhere, the trend to go public through SPACs -- special purpose acquisition companies, publicly traded investment vehicles that buy other businesses -- is spurring a lot of M&A activity. Coupled with a lot of capital waiting to be deployed, these conditions are "very constructive" for the M&A market, said Goldman Sachs (GS) CEO David Solomon at the event.

8:45 a.m. ET, January 27, 2021

HBO Max notches more than 17 million subscribers

From CNN Business' Frank Pallotta

HBO Max, WarnerMedia's new streaming service, has now reached 17.2 million activations since launching in May, AT&T (T) reported Wednesday.

That's a significant bump from the 12.6 million activations WarnerMedia announced in December -- and it's double the activations at the end of the third quarter.

AT&T (which is the parent company of WarnerMedia and CNN) also said that HBO Max and HBO subscribers combined topped 41 million domestically and nearly 61 million worldwide.

The end of 2020 was a notable time for HBO Max. The service finally reached a deal with Roku, the leader in the streaming-device marketplace. Warner Bros. also announced it would release its entire 2021 slate in theaters and on HBO Max simultaneously.

That new strategy started in December with "Wonder Woman 1984," and AT&T CEO John Stankey credited the approach for the bump in subscribers.

"The release of 'Wonder Woman 1984' helped drive our domestic HBO Max and HBO subscribers to more than 41 million, a full two years faster than our initial forecast,” he said on Wednesday.

8:12 a.m. ET, January 27, 2021

Jerome Powell and Janet Yellen aren't worried about inflation. Maybe they should be

From CNN Business' Paul R. La Monica

Fed Chair Jerome Powell said in a Princeton talk last week that there could be "quite exuberant spending" from consumers over the next few months thanks to stimulus checks and an improving economy following broader access to vaccines. Some prices could rise as a result.

But Powell argued this may not necessarily be inflationary for the long haul. Price increases could be -- to use a favorite Fed buzzword -- transitory.

Treasury Secretary Janet Yellen similarly noted in her Senate confirmation hearing last week that she believes the Fed and the Biden administration should take advantage of interest rates being near zero and thus spend more on stimulus.

In other words, now is not the time to fret over inflation.

Still, some worry that Powell and Yellen are being too dismissive. The economy may not be able to remain in a scenario where inflation pressure simmers without boiling over.

The 10-year Treasury yield is now back above 1% -- its highest level since March. Oil prices are up 10% in the past month as well. These are signs that investors are betting on more inflation sooner rather than later.

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8:12 a.m. ET, January 27, 2021

Facing back-to-back crises, Boeing posts a record loss

From CNN Business' Chris Isidore

Boeing closed the books on its worst year ever, posting record losses and plunging sales on the backs of combined crises: the Covid-19 pandemic and the problems getting the 737 Max back in the air.

The company's loss from operations climbed to $12.8 billion, up from nearly $2 billion a year ago, which was Boeing's previous record loss. The company's net loss soared to $11.9 billion, also an increase from the previous year's record of $636 million.

The net loss is so much larger partly because of the decision announced Wednesday to push the first delivery of its newest jet, the 777X, back to 2023, from its previous target of a 2022 launch. The widebody long-range plane was designed to be used mostly on international travel, and that is the part of air travel that is expected to take the longest time to recover from the pandemic. Boeing took at $6.5 billion charge as a result of that delay.

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8:03 a.m. ET, January 27, 2021

Tech earnings could supercharge a greedy stock market

From CNN Business' Julia Horowitz

Earnings from some of the biggest US technology companies could push the market to new highs as talk of a stock bubble continues to ripple through Wall Street.

What's happening: Investors who think soaring valuations are grounded in reality point to future profits from the likes of Apple (AAPL) and Facebook (FB), which report results from last quarter after US markets close on Wednesday. Solid numbers could bolster the sentiment that stocks are the place to be, especially compared to low-yielding bonds.

Microsoft (MSFT) set the tone when it shared earnings after the market closed on Tuesday. The company exceeded Wall Street analysts' expectations for quarterly revenue by nearly $3 billion and hit a three-month sales record. Shares are up 2% in premarket trading.

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7:41 a.m. ET, January 27, 2021

GameStop and AMC surge thanks to Reddit love

From CNN Business' Paul R. La Monica

Welcome to the Reddit market.

Shares of GameStop (GME), the struggling electronic retailer, were up nearly another 75% premarket Wednesday after nearly doubling Tuesday. Shares of GameStop have surged in the past week, thanks in large part to a group on Reddit's Wall Street Bets board who have been promoting the stock in an attempt to squeeze short sellers that have been betting against it.

The coordinated effort has already caused research firm Citron to abandon its negative call on GameStop stock and has also reportedly led to big losses for hedge fund Melvin Capital, which had been shorting GameStop. Even Elon Musk paid his respects to the Redditors on Twitter.

Now the WSB community has a new plaything -- movie theater chain AMC (AMC). Shares were up more than 140% in premarket trading Wednesday as members of the Reddit board were touting the stock. They also got #SaveAMC trending on Twitter.

AMC is struggling financially too and is a favorite stock of short sellers. But the company announced a nearly $1 billion lifeline yesterday and the CEO told CNN Business Tuesday he is hopeful AMC can ride out the pandemic until people are ready go back to theaters.

7:04 a.m. ET, January 27, 2021

Futures sink ahead of a busy day for tech, the Fed and the economy

From CNN Business' David Goldman

US stocks are poised to open lower, ahead of a busy day for the market. A dozen or so major companies are set to report earnings Wednesday, highlighted by Apple, Boeing, Tesla and Facebook.

The Fed will also issue its monetary policy statement at 2 pm ET, followed by a press conference hosted by Fed Chair Jerome Powell at 2:30 pm ET. And we'll get a look at durable goods orders this morning.

  • Dow were down 300 points, or 0.9%.
  • S&P 500 futures fell 0.9%.
  • Nasdaq Composite futures were only 0.2% lower, buoyed by Microsoft's strong earnings performance Tuesday evening.

On Tuesday, US stocks ended the day modestly lower.

6:19 a.m. ET, January 27, 2021

Walgreens taps Starbucks executive Rosalind Brewer to be its CEO

From CNN Business' Danielle Wiener-Bronner

Rosalind Brewer will be the next CEO of Walgreens (WBA) — making her the only Black woman currently slated to take the helm of a Fortune 500 company.

Brewer is set to begin on March 15, Walgreens said Tuesday. She currently serves as the chief operating officer at Starbucks, and will remain in the role until the end of February. The coffee company announced her departure on Tuesday.

Read more here.

6:17 a.m. ET, January 27, 2021

Microsoft beats revenue expectations as pandemic continues to fuel sales

From CNN Business' Clare Duffy

Microsoft (MSFT) exceeded Wall Street analysts' expectations for quarterly revenue by nearly $3 billion, it reported Tuesday.

The results signal that the pandemic is continuing to buoy the tech giant's business — from computers and gaming systems to the cloud computing systems helping companies navigate continued remote working.

  • Microsoft posted $43.1 billion in revenue for its fiscal second quarter — a 17% increase from the same period in the prior year and well above the $40.2 billion analysts had predicted.
  • Income hit $15.5 billion, or $2.03 per share, compared with the $1.64 earnings per share Wall Street predicted.

The company's stock shot up more than 2% in premarket trading.

Read more here.