Oil Prices, Reopening Talks & Healthcare Sector Progress Pull Markets Into Positive Territory

We now have seen more than 3,618,325 confirmed cases of COVID-19 in the world with 1.18M cases that have recovered and more than 253k worldwide deaths. In the US, we have 1.226M confirmed cases with 162k that have recovered with 71,532 deaths. However, reopening talks and active measures are pushing forward and many are seeing a way that their economies in the US and around the world will once again come online.

Recently, promising news came forth as researchers in South Korea stated that reports of recovered coronavirus patients testing positive for COVID-19 for the 2nd time were due to testing errors, not reinfection. We have also learned that AbCellera, a privately held Canadian biotech with a drug discovery platform that searches and analyzes natural immune systems to find antibodies that can be used to prevent and treat disease announced Sunday that it has received a commitment of up to $175.6 million in support from the Government of Canada under Innovation, Science and Economic Development’s (ISED) Strategic Innovation Fund (SIF) to expand efforts related to the discovery of antibodies for use in drugs to treat COVID-19, and to build technology and manufacturing infrastructure for antibody therapies against future pandemic threats. AbCellera’s antibody discovery platform is being used to search blood samples of patients who have recovered from COVID-19 to aid in the discovery of antibodies that can be used to treat and prevent the disease. Since receiving one of the first North American samples from a recovered patient on February 25th, AbCellera has identified over 500 unique human anti-SARS-CoV-2 antibodies as part of a collaboration with the Vaccine Research Center (VRC) at the National Institute of Allergy and Infectious Diseases, part of the US National Institutes of Health. Antibodies discovered by AbCellera may also be used to create new diagnostic tests to support the medical community in monitoring the spread of COVID-19. “Our government is mobilizing its resources to confront COVID-19, supporting the researchers and businesses that are working hard to develop medical countermeasures to beat this pandemic. Today’s contribution will support AbCellera Biologics as they use their world-leading technology to rapidly identify solutions for COVID-19 while ensuring Canada’s long-term preparedness for future health challenges,” stated the Honourable Navdeep Bains, Minister of Innovation, Science, and Industry. AbCellera previously announced a partnership with Eli Lilly and Company that seeks to develop a treatment for COVID-19 with the goal of beginning clinical trials in July 2020. As part of the collaboration, Lilly will independently fund and lead clinical development and testing of antibody therapeutics discovered through this partnership. AbCellera has reportedly spent the past two years adapting its technology to rapidly respond to pandemics through its participation in the Defense Advanced Research Projects Agency (DARPA) Pandemic Prevention Platform (P3). The goal of AbCellera’s four-year, USD $30M P3 project is to establish a robust pandemic response platform that can develop field-ready antibody drugs within 60 days of isolating an emerging viral pathogen.

Even closer to home, mega coffee shop operator, Starbucks (SBUX) ($79.90/share, +1/4%), did their job today to make us feel good too as they announced that the company expects to have 85% of U.S. stores open by the end of the week. 

Today, we also saw oil prices continue to rebound rising a whopping +20.4% ending again safely above $20 at $24.53/bbl still low historically. Chevron (CVX) closed at $92.89/share up by +1.59%, Exxon (XOM) closed at $44.83/share down by -.11% & Occidental Petroleum Corporation (OXY) closed at $15.32/share down by +1.29%.

The S&P 500 closed up by +.90% as the healthcare sector ended up +2.2%. The Dow rose by .56%. The Nasdaq added a solid +1.13%. The popular FAANG stocks charged forward today. Facebook (FB) closed at $207.07/share, up by +.88%, Amazon (AMZN) closed at $2,317.80/share, up by +.08%,  Apple (AAPL) closed at $297.56/share up by +1.5%, & Netflix (NFLX) dropped by -.81% closing $424.68/share, & Alphabet (GOOG) closed at $1,351.11/share up by +1.83%. The Russell 2000 added +.75%.  

The 2-yr US treasury yield stayed flat at .17% & the 10-yr yield rose by 2 basis points to end at .66%. The U.S. Dollar Index strengthened by +.3% to end at 99.78. Gold prices ended higher again today at $1,712/oz (+4) while silver prices closed at $15.12/oz (+.15). North American silver and gold producer Hecla Mining Company (HL) ended the day at $2.66/share off -2.58%.

A couple of macroeconomic reports surfaced as well today. The ISM Non-Manufacturing Index for April came in at the contraction level of 41.8% down from 52.5% in March. The Trade Balance report for March confirmed a deficit to $44.4B  rising from an upwardly revised $39.8B in February. Exports were down $20.0 billion from February while imports were down $15.4 billion.

MOVERS

• Shares of Chegg (CHGG), the leading direct-to-student learning platform, closed up +32.27% at $57.92/share. Yesterday, CHGG announced Q1, 2020 earning with Total Net Revenues of $131.6 million, an increase of 35% year-over-year. Chegg Services Revenues grew 33% year-over-year to $100.4 million, or 76% of total net revenues, compared to 77% in Q1 2019. 

TOMORROW (Tuesday)

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

• ADP Employment Change Report for April
• The weekly MBA Mortgage Applications Index

Economic Reports

• On Monday, we received the Factory Orders report which confirmed, and at no real surprise with the shutdown in full power, we saw a decrease of 10.3% month/month in March.
• On Tuesday, we received the ISM Non-Manufacturing Index for April which came in at the contraction level of 41.8% down from 52.5% in March. The Trade Balance report for March confirmed a deficit to $44.4B rising from an upwardly revised $39.8B in February. Exports were down $20.0 billion from February while imports were down $15.4 billion.

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 ISM Non-Manufacturing Index for April
• The Trade Balance report for March