Plus, wildfires continue to burn on the U.S. West Coast, Trump won’t extend the deadline for TikTok to feel its U.S. operations, China is testing a intranasal spray vaccine, and Peloton delivered an earnings beat.
Stocks were higher to start Friday with the Dow advancing 237 points, or 0.9%. The S&P 500 gained 0.7%, while the Nasdaq traded 0.5% higher.
Dozens of wildfires are continuing to burn along the U.S. West Coast, killing at least 20, destroying countless structures, and wiping out entire neighborhoods in two Oregon towns. In California, more than 3 million acres have burned, already marking a record for the state which is at the beginning of its fire season. In Washington, the town of Malden has been mostly destroyed. Around 500,000 people are under evacuation orders in Oregon as nearly three dozen fires burn there, destroying several communities. Portland General Electric has also received unconfirmed reports that some of the Oregon fires may have been started by electrical equipment impacted by heavy winds and debris. “We have never seen this amount of unconfined fire across the state,” said Oregon Governor Kate Brown, who added that more than 900,000 acres have burned there. “We are feeling the acute impacts of climate change.” Sean Norman, a battalion chief with the California Department of Forestry and Fire Protection said, “It’s a historic season on top of a historic season that replaced a historic season. We just keep setting new precedents, and then we keep destroying them.”
President Donald Trump said he won’t extend his September 15 deadline for TikTok-parent ByteDance to sell its U.S. operations, after reports yesterday that the White House was considering allowing an extension. “We’ll either close up TikTok in this country for security reasons, or it will be sold,” Trump said. “There will be no extension of the TikTok deadline.” ByteDance is likely to miss the September 15 deadline to sell TikTok’s U.S. operations after new Chinese regulations complicated negotiations with bidders including Microsoft and Walmart, and Oracle. Instagram chief Adam Mosseri said today that any short-term benefits his social media app might see from a TikTok ban are “greatly outweighed by the risks of a fragmented internet.” “If we move to a place where countries start to silo internet within them, and we can’t operate in that way, I think that it’s much more problematic than any short-term benefit,” Mosseri said. “If it benefits us in the short term, in terms of slowing down a competitor, the precedent it sets for us is much, much worse for us as a business in the long term.”
As the U.S. nears 6.4 million confirmed coronavirus cases, former FDA Commissioner Dr. Scott Gottlieb said that the lack of widespread coronavirus testing in the U.S. early on in the pandemic will be remembered as the nation’s biggest misstep in its pandemic response. February was “the critical time frame when we could have done more to mitigate the spread and not have gotten ourselves into the situation in March that we had to then reach for the stay-at-home orders which had the devastating impact on the economy,” Gottlieb said. “Back in February and March, we had no idea where the virus was and was not spreading because we didn’t have diagnostic testing. When history looks back on this, the lack of situational awareness at that time is going to be remembered as the great failing.” Elsewhere, China approved a phase I human trail for a nasal spray coronavirus vaccine candidate that’s being co-developed by Xiamen University and Hong Kong University, as well as vaccine maker Beijing Wantai Biological Pharmacy Enterprise Co. The intranasal spray contains weakened flu virus that carries the genetic parts of the coronavirus and mimics natural infections to stimulate an immune response.
Nikola shares are down nearly 16% this morning following fraud allegations made in a report by short-selling firm Hindenburg Research. In the report, Hindenburg said that Nikola’s management overstated its internally developed battery and fuel-cell capabilities. “Nikola announced [in 2019] it would revolutionize the battery industry,” the Hindenburg authors wrote, adding that while Nikola planned to buy the new technology, the deal fell through. “Nikola has never walked back claims relating to its battery technology. Instead, [founder Trevor Milton] continued to publicly hype the technology.” Nikola refuted the Hindenburg report’s claims and said in a statement that it is evaluating legal recourse. “Yesterday, an activist short seller whose motivation is to manipulate the market and profit from a manufactured decline in our stock price published a so-called report replete with misleading information and salacious accusations directed at our founder and executive chairman,” Nikola said in the statement. “To be clear, this was not a research report and it is not accurate. This was a hit job for short sale profit driven by greed.”
And in earnings news, Peloton said its fiscal fourth-quarter sales surged 172% amid the coronavirus pandemic. The high-end exercise equipment maker posted earnings per share of $0.27 on revenue of $607.1 million, beating estimates for earnings per share of $0.10 on revenue of $582.5 million. Peloton CEO John Foley said in a letter to shareholders that the company is making progress in scaling its business, which included expanding its manufacturing and logistics, member support, and field operations. “Fueled in part by the challenges associated with COVID-19, member engagement reached new highs with 164 million connected fitness subscription workouts completed in FY 2020,” Foley added.
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Sage Therapeutics (NASDAQ: SAGE): Sage Therapeutics shares are up nearly 5% today after the biopharma hosted a webcast event yesterday where it provided an update on its pipeline progression, research and development strategy, and an update on its neurology and neuropsychiatry franchise programs. “The team at Sage continues to follow the science with a fundamentally different approach, using our strong medicinal chemistry and focus on translational data to efficiently approach drug development,” said Jeff Jonas, M.D., chief executive officer at Sage Therapeutics. “We continue to focus on areas where our early clinical data suggest the potential for meaningful patient benefit, not just incremental change. With this approach, we’ve generated compelling data. I believe we are one of the few companies developing new chemical equity with a goal of making true advances in brain health.”