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Monster Moves By FAANGs, Energy, & Gilead’s COVID-19 Treatment News Drives Markets Forward on Wednesday

By John F. Heerdink, Jr.

We now have more than 3,170,335 confirmed cases of COVID-19 in the world with 958,353 cases that have recovered and more than 224,708 worldwide deaths. In the US, we have 1,052,069 confirmed cases with 119,130 that have recovered with 60,726 deaths and counting and we still do not have a reliable treatment or vaccine. However, today the markets reacted positively to a number of items and flew higher.

One of the items the markets reacted positively to was from Gilead (GILD) ($83.14/share up +5.7%) who announced topline results from the open-label, Phase 3 SIMPLE trial evaluating 5-day and 10-day dosing durations of the investigational antiviral remdesivir in hospitalized patients with severe manifestations of COVID-19 disease. The study demonstrated that patients receiving a 10-day treatment course of remdesivir achieved similar improvement in clinical status compared with those taking a 5-day treatment course. No new safety signals were identified with remdesivir across either treatment group. Gilead plans to submit the full data for publication in a peer-reviewed journal in the coming weeks. However, it is important to note that remdesivir is not yet licensed or approved anywhere globally and has not yet been demonstrated to be safe or effective for the treatment of COVID-19. This study sought to determine whether a shorter, 5-day course of remdesivir would achieve similar efficacy results as the 10-day treatment regimen used in multiple ongoing studies of remdesivir. Secondary objectives included rates of adverse events and additional measures of clinical response in both treatment groups. Patients were required to have evidence of pneumonia and reduced oxygen levels that did not require mechanical ventilation at the time of study entry. Clinical improvement was defined as an improvement of two or more points from baseline on a predefined seven-point scale, ranging from hospital discharge to increasing levels of oxygen support to death. Patients achieved clinical recovery if they no longer required oxygen support and medical care or were discharged from the hospital.

Another item that surfaced was the fact that the Federal Reserve issued its FOMC statement today confirming that the Fed voted to keep interest rates in the range of 0.00-0.25%. The Fed further confirmed that rates will remain there until the economy is on track regarding full employment & price stability and that they remain committed to using their full range of policy tools.

Oil prices rebounded today rising 22% as it closed at $15.13/bbl. A few of the major energy producers closed up too. Chevron (CVX) closed at $94.62/share up +5.24%, Exxon (XOM) closed at $47.46/share up +5.54% & Occidental Petroleum Corporation (OXY) closed at $16.78/share up +10.61% while the energy sector led all sectors as it rose +7.4%.

At the end of the day today, the S&P 500 closed up by 2.66% as the following sectors jumped higher: energy moved +7.4%, communication services moved+5.1%, & information technology moved +4.2%.  The Dow added +2.12% as Dow component Boeing (BA) closed at $139/share up +5.9%. The Nasdaq jumped +3.57% lead by the popular FAANG stocks which charged forward today. Facebook (FB) closed at $192.19/share, up by 6.17%, Amazon (AMZN) closed at $2,372.71/share, up by +2.53%,  Apple (AAPL) closed at $287.73/share up by +3.28%, & Netflix (NFLX) increased by +2% closing $411.89/share, & Alphabet (GOOG) closed at $1,341.48/share down by -3.31%. The Russell 2000 also climbed an impressive +4.83%. The US treasury yields dropped in concert with the markets today.  The 2-yr US treasury yield dropped by 1 basis points to .19% & the 10-yr yield rose by 2 basis points to end at .63%. The U.S. Dollar Index strengthened by +.3% to end at 99.53. 

Gold prices ended lower again today at $1,719/oz (+2) while silver prices closed at $15.46/oz (-.02). North American silver and gold producer Hecla Mining Company (HL) rose +10.04% to end the day at $2.74/share.

We also received the following significant economic reports today:

  • The Q1 GDP  report confirmed a decline at an annualized rate of 4.8% as the GDP Price Deflator came in at 1.3%.
  • The Pending Home Sales report confirmed a -20.8% decrease in March 
  • The Weekly Mortgage Applications Index dropped by -3.3%


MOVERS

  • Shares of Norwegian Cruise Lines Holdings (NCLH) rose +25.36% ending at $16.41/share.
  • Shares of Noble Energy, Inc, (NBL) jumped +23.31% today closing at $10.05/share but still off of its 52-wk high of $27.31/share.


LATE IN THE DAY

Reports that the stay at home measures are moving a record number of users to Facebook (FB) was relayed on the conference call after the close today as CEO Mark Zuckerberg disclosed a number of new metrics highlighting a significant bump in Facebook usage during the broader quarantine lockdown. Facebook also reported its First-quarter earnings as it earned revenues of $17.74B. Shares of FB are currently up +9.23% at $212.11/share in aftermarket trading.

TOMORROW

Tomorrow’s significant economic data report schedule will include the following:

  • The weekly Initial and Continuing Claims report
  • The Personal Income and Spending for March
  • The Q1 Employment Cost Index and the Chicago PMI for April

Apple (AAPL) looks to report its Q@ 2020 earnings on Thursday.

Economic Reports

  • On Monday, we did receive any significant economic reports.
  • On Tuesday, we received the following reports:
    • The Conference Board’s Consumer Confidence Index for April dove to 86.9
    • The advance goods trade deficit came in at $64.2B in March, advance retail inventories decreased by -1.3% in March while advance wholesale inventories dropped by -1% in March.
    • The S&P Case-Shiller Home Price Index for February moved higher by +3.5% 

Investing & Inspiration

 

 

I believe the returns on investment in the poor are just as exciting as successes achieved in the business arena, and they are even more meaningful!” -Bill Gates

“Every portfolio benefits from bonds; they provide a cushion when the stock market hits a rough patch. But avoiding stocks completely could mean your investment won’t grow any faster than the rate of inflation.” – Suze Orman

“The tax on capital gains directly affects investment decisions, the mobility, and flow of risk capital… the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy.” – John F. Kennedy

“If all the economists were laid end to end, they’d never reach a conclusion.
-George Bernard Shaw

“The riskiest thing we can do is just maintain the status quo.
I get up at 4:30 in the morning, seven days a week, no matter where I am in the world. I think it is important for people who are given leadership roles to assume that role immediately. What I’ve really learned over time is that optimism is a very, very important part of leadership.” Bob Iger, Ceo of Disney

“There are old traders and there are bold traders, but there are very few old, bold traders.”-Ed Seykota

“Let this scenario play out on its own, in its own fashion. As you watch it unfold, you will soon be grateful that you choose the peaceful path. Remember — those who live by the sword, die by the sword.”

“As long as you enjoy investing, you’ll be willing to do the homework and stay in the game.” -Jim Cramer

“I rarely think the market is right. I believe non-dividend stocks aren’t much more than baseball cards. They are worth what you can convince someone to pay for it.” -Mark Cuban

Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.” -Bruce Kovner

“The policy of being too cautious is the greatest risk of all.” -Jawaharlal Nehru

“The only true test of whether a stock is “cheap” or “high” is not its current price in relation to some former price, no matter how accustomed we may have become to that former price, but whether the company’s fundamentals are significantly more or less favorable than the current financial-community appraisal of that stock.” -Philip Fisher

“I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade.” -Richard Dennis

“The four most dangerous words in investing are: ‘this time it’s different.” -Sir John Templeton

“Money doesn’t make you happy. I now have $50 million but I was just as happy when I had $48 million.” -Arnold Schwarzenegger

Tomorrow

Tomorrow’s significant economic data report schedule will include the following:

    • The advance estimate for Q1 GDP
    • The Pending Home Sales for March
    • The weekly MBA Mortgage Applications Index

Videos

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