THE WALL STREET JOURNAL. **** Wednesday, December 2, 2020 |B11
Share-price and index performance this yearSource: FactSetS&P500HCA
Healthcare
Universal
Health
Services
Tenet
Healthcare10–70–60–50–40–30–20–100%JFMAMJJASONDAUCTIONRESULTS
Here are the results of Tuesday's Treasury auction.
All bids are awarded ata single price atthe market-
clearing yield. Rates are determined by the difference
between that priceand the face value.
52-WEEK BILLS
Applications $131,770,818,100
Accepted bids $38,987,756,200
" noncompetitively $275,794,500
" foreign noncompetitively $0
Auction price (rate) 99.888778
(0.110%)
Coupon equivalent 0.112%
Bids at clearing yield accepted 82.59%
Cusip number 9127965G0
The bills, dated Dec. 3, 2020, mature on Dec. 2, 2021.exchange has also traditionally
offered little diversity, with
miner Vale SA and oil com-
pany Petrobras accounting for
a little more than a fifth of all
shares in the Ibovespa.
But a combination of low
inflation and law that capped
federal government spendingtwo years ago. The new inter-
est in the market has paved
the way for a flurry of public
offerings, with 25 companies
going public so far this year,
the most in 13 years. The
São Paulo-based B3 exchange’s
benchmark index, the Ibove-
spa, is up more than 60% since
its March low.
“The growth surprised us a
lot,” said Gilson Finkelsztain,
chief executive of the B3.
The trend accelerated as
stocks plunged in March but
has continued even as the
Ibovespa recovered—the index
was up about 16% in Novem-
ber, its best month in four
years. For the year through
Nov. 30, it was still down
about 6%.
Brazil’s stock market has
long struggled to attract local
investors. With interest rates
as high as 14% here only four
years ago, investors had little
reason to abandon profitable
fixed-income investments to
venture into stocks. The stockhave allowed the central bank
to gradually chip away at the
interest rate, transforming
Brazil’s investment culture.
The pandemic accelerated
that trend, prompting the cen-
tral bank to cut the rate to 2%
in August. In 2016 it was
14.25%, then one of the
world’s highest.
Despite concerns about Bra-
zil’s deteriorating fiscal
health, the government has
rolled out stimulus amid the
pandemic, amounting to 8.3%
of output, which has helped
buoy the economy and in-
jected confidence into the
stock market.
Many new investors are
getting their information from
social-media accounts cen-
tered on finance, with fund
managers, academics and ama-
teur investors offering guid-
ance from tips on the latest
stock to how to invest for the
first time.
Thiago Nigro, 30 years old,
who goes by the social-mediahandle Rich Cousin and is a
partner at the São Paulo bro-
kerage XP Inc., has amassed
four million followers on You-
Tube covering themes such as
whether a stock is cheap or
not. Wearing a T-shirt and
seated in front of a laptop, he
walks viewers through finan-
cial scenarios while perform-
ing calculations on spread-
sheets. In one 21-day series of
videos, tens of thousands
woke up at 5 a.m. for a sort of
investing boot camp.
Another XP part-
ner, Ana Laura Magalhães,
who is 29, takes on topics that
may sound impenetrable—
from defining debentures to
how to analyze corporate bal-
ance sheets.
Prospective investors so
value her advice that she has
nearly a combined 250,000
followers on Instagram and
YouTube.
“Talking about money was
a taboo before,” said
Ms. Magalhães, who is so wellknown that organizers at a
rock concert last year up-
graded her to the VIP section
upon recognizing her. “Brazil-
ians are not used to investing
their money.”
Investing in stocks is risk-
ier and more volatile than
bonds, since their returns are
closely linked to the health of
the economy.
Right now, equity returns
are soaring—not just in Brazil,
but globally, boosted by coun-
tries’ pandemic stimulus pack-
ages.
Yet Brazil’s initial package
was “so high it’s not some-
thing you can sustain,” said
Claudio Ferraz, an economist
and Brazil expert at Canada’s
Vancouver School of Econom-
ics.
There is also the risk of
fraud and misinformation,
with a largely novice investing
class and brokerages and
banks bombarding people with
commercials and social-media
content.RIO DE JANEIRO—Since the
coronavirus pandemic hit,
many Brazilians have fled to a
place they don’t normally go:
the country’s stock market.
Markets are up around the
world despite the pandemic
and economic concerns,
buoyedbylowinterestrates.
When Brazil’s central bank
pushed interest rates down to
a historic low of 2% amid
Covid-19, it sparked a particu-
larly large shift among Brazil-
ians, who are swapping their
dwindling fixed-income invest-
ments for stocks for the first
time.
Fueling the trend are social-
media stars who have boosted
the market by giving younger
Brazilians the confidence to
try their luck with equities.
A million new investors en-
tered Brazil’s stock market
since March and there are now
three times as many investors
in the market as there were
BYVINODSREEHARSHA
Global Stock-Market Fever Spurs Reluctant Brazilians to Invest
Performance, year to dateSource: FactSet10–50–40–30–20–100%S&P500BovespaJan. April July Oct.closing out its best month since
1987.
Despite the tumult of 2020,
the S&P 500 is up 13% for the
year, while a surge in technol-
ogy shares has helped the Nas-
daq soar 38%.
Small stocks also extendedtheir recent gains, with the
Russell 2000 index rising 0.9%
after posting its best monthly
gain yet in November.
Tuesday’s gains were broad,
with 10 of the S&P 500’s 11 sec-
tors rallying. A range of stocks
has powered the rally, leavingMARKETS
can get back to quote-unquote
normal.”
Advances toward protecting
populations against the corona-
virus continued to be a focus.
The European Union’s chief
medicines regulator said that
Pfizer partner BioNTech and
drugmaker Moderna both ap-
plied for their coronavirus vac-
cines to be approved in the EU.
In another potential positive
sign for markets, negotiations
in Washington over additional
coronavirus relief showed signs
of resuming. Investors have fol-
lowed developments that could
lead to more economic stimu-
lus.
The S&P 500 gained 40.82
points, or 1.1%, to 3662.45, its
27th record close of 2020. The
tech-heavy Nasdaq Composite
advanced 156.37 points, or 1.3%,
to 12355.11, its 46th record
close of the year. The Dow
Jones Industrial Average added
185.28 points, or 0.6%, to
29823.92, after on Mondaymajor indexes less reliant on a
few highflying companies to lift
them.
The broadening of market
participation is a healthy sign,
said Lauren Hill, portfolio man-
ager at Westwood Holdings
Group. “I think that means that
more people believe that the
recovery is taking shape with
the vaccine announcements
that we’ve had in the last few
weeks,” she said. “People are
looking ahead to 2021 with op-
timism.”
Among individual stocks,
Teslashares rose $17.16, or 3%,
to $584.76 after S&P Dow Jones
Indices said it would add the
car maker’s full weight to the
S&P 500 in one move before the
start of trading on Dec. 21.
Shares ofZoom Video Com-
municationsdropped $72.05,
or 15%, to $406.31. The video-
conferencing company on Mon-
day signaled that higher sales
in recent months have come
with higher costs, disappoint-ing investors.
Overseas, the pan-continen-
tal Stoxx Europe 600 rose 0.7%.
Surveys on manufacturing ac-
tivity in many major European
economies showed a broad con-
tinued expansion in the euro-
zone.
“The manufacturing sector
is one part of the European
economy that is actually man-
aging to retain some degree of
resilience,” said Michael
Hewson, a chief markets ana-
lyst at CMC Markets.
In Asia, most major bench-
marks rose by the close Tues-
day. The Shanghai Composite
Index added 1.8%, Hong Kong’s
Hang Seng advanced 0.9% and
Japan’s Nikkei 225 climbed
1.3%. A private gauge of manu-
facturing activity in China hit
its highest level in a decade in
November. At midday Wednes-
day in Tokyo, the Nikkei was
down 0.1% and the Hang Seng
was down 0.2%. U.S. stock fu-
tures were off 0.3%.The S&P 500 and Nasdaq
Composite rose to records, as
the optimism behind the No-
vember market rally extended
into a new month.
Investors have been heart-
ened in recent weeks by prom-
ising reports on the effective-
ness of coming
vaccines in
protecting peo-
ple from
Covid-19. The strong results
have raised hopes that indus-
tries hurt by the pandemic may
recover more quickly than pre-
viously thought.
“That news was so much
more positive than I think peo-
ple expected,” said Elliott Sav-
age, portfolio manager of YCG
Enhanced Fund. “To have two
come out that were 90 and 95%
effective, I think that just was a
very big change in expectations
for how quickly the economy
BYKARENLANGLEY
ANDANNAHIRTENSTEIN
S&P 500, Nasdaq Advance to Records
TUESDAY’S
MARKETS
Healthcare personnel in a room for patients with the coronavirus in Kansas. Shares of hospital systems have risen this year.CALLAGHAN O’HARE/REUTERSU.S. government-bond yields
climbed to a three-week high
following a renewed congres-
sional effort to send aid to
businesses and municipalities
hurt by the pandemic.
The yield on the benchmark
10-year Treasury note finished
the session at
0.933%, up from
0.845% Monday
and its highest
close since Nov. 10, according
to Tradeweb. The 30-year
Treasury bond yield rose to
1.675% from 1.574%
Yields, which rise when
bond prices fall, rose after a
bipartisan group of U.S. law-
makers proposed a $908 bil-
lion relief bill that would fund
measures through the end of
March.
Higher government spend-
ing tends to push up Treasury
yields by boosting economic
growth and inflation, making
fixed payments from bonds
less attractive.
Previous stimulus efforts
pegged potential packages at
more than $1 trillion. In No-
vember, the Treasury Depart-
ment dialed back its estimates
for government borrowing
through the end of the year.
Yields have climbed in recent
sessions, though they remain
near historic lows.
One factor suppressing a re-
bound is the Federal Reserve,
which has committed to aiding
the economy by holding bor-
rowing costs low: keeping
short-term interest rates near
zero and buying up billions of
dollars of bonds.BYSEBASTIANPELLEJEROTreasury
Yields
Rise on
Aid Talks
DowJones
Industrial
Average
+0.6%S&P500
+1.1%Nasdaq
Composite
+1.3%Index performance, TuesdaySource: FactSet1.600.20.40.60.81.01.21.4%9:30 10 11 noon 1 2 3 4CREDIT
MARKETSdown again, we think these
companies can deliver on ex-
pectations and even exceed
them. And that should be suf-
ficient to at least relatively
outperform the market over-
all.”
Driving the optimism
around hospital and health-
care facilities, analysts and in-
vestors say, is increased clar-
ity about the months ahead.
Although two key Senate seats
in Georgia won’t be decided
until the January runoff elec-
tion, many traders are antici-
pating that the government
will remain divided—an out-
come that reduces the chances
of a major health-care over-
haul.
And statements from some
of the Supreme Court’s con-
servative justices suggest the
Affordable Care Act may sur-
vive its latest test, a case ar-
gued last month by Republi-
can-leaning states seeking to
challenge it.
The survival of the Afford-
able Care Act—combined with
a gridlocked government—
would make it unlikely that
health-care policy will sub-
stantially change. That in
turn, analysts said, will be ad-
vantageous for hospitals,
which have benefited from
greater volumes of insured
patients.
“The [election] outcome
probably is as good as we
could have hoped,” said Whit
Mayo, managing director of
equity research at UBS. “The
[chance] of seeing more cover-
age is probably greater than
less coverage. And that’s al-
most always a good thing for
everyone in health-care ser-
vices.”
Continued from page B1
One of the biggest chal-
lenges for hospital systems in
the months ahead will be the
sharp climb in Covid-19 cases,
which public-health officials
expect will worsen in the com-
ing weeks as more Americans
test positive after traveling for
Thanksgiving. The U.S. re-
ported more than 135,000 new
coronavirus infections Sunday,
according to the Covid Track-
ing Project, and hospitaliza-
tions surged to more than
93,000—a record.
The jump in cases threatens
to overtax hospital systems
again. But this time, investors
and analysts expect hospital
systems to better weather the
Covid-19 influx, thanks to a
deeper understanding of how
to treat the virus and how to
manage hospital capacity. And
unlike in the spring, when
states across the country im-
posed restrictions on elective
procedures, analysts anticipate
that local governments will in-
stead leave those decisions to
hospital systems.
Already, many hospitals
seem more willing to push
ahead with the profitable pro-
cedures that hospitals rou-
tinely conduct, especially after
many systems have enjoyed afaster-than-expected rebound
in hospital visits for non-coro-
navirus patients. That—along
with cutting expenses, includ-
ing via furloughs and reducing
salaries at some companies—
has helped turn around hospi-
tals’ financial landscape.
Federal assistance earlier
this year, including $175 bil-
lion in direct aid approved by
Congress for health-care pro-
viders across the U.S., has also
delivered relief.
“I do think investors are be-
coming comfortable with the
fact that hospitals can operate
in a Covid environment and
that everything doesn’t have
to go into a complete shut-
down,” said Frank Morgan, a
research analyst at RBC Capi-
tal Markets.
Still, even with vaccine op-
timism, some analysts note
that the Covid-19 landscape
could shift sharply if out-
breaks significantly worsen in
the coming weeks.
Some nonprofit hospitals
have begun putting elective
surgeries on pause, and
health-care workers are anx-
ious about what could be a
sustained influx of patients af-
ter already enduring an unre-
lenting year.Even so, investor sentiment
on hospital companies and the
overall health-care sector re-
mains positive. In its latest
survey released in November,
Bank of America said that
health care remains the most
overweight sector among fund
managers.
Recent options activity,
meanwhile, has indicated that
investors became increasingly
bullish on HCA and UniversalHealth in November, com-
pared with the month before,
said Michael Khouw, chief in-
vestment officer of Optimize
Advisors. Activity in the op-
tions market implies that, on
average, traders expect a
nearly 7% increase in share
price for HCA by mid-March
and an almost 12% increase
for Universal Health by mid-
April, according to his data
analysis.Hospital
Stocks
Rally
Increased clarity
about the months
ahead is helping the
sector.