Plus, the $2 trillion stimulus bill has hit a snag in the House, the U.S. now has the most cases of the coronavirus in the world, and Novartis’ CEO said it’s “too soon” to say if two anti-malaria drugs will be an effective vaccine against the deadly virus.
Stocks fell sharply to start Friday with the Dow falling 916 points, or 4%. The S&P 500 and Nasdaq both traded 3.6% lower.
Stocks snapped their fastest winning streak in nine decades this morning as investors again focused on the coronavirus as the U.S. became the country with the most confirmed cases. “We believe medium-term risks are skewed to the downside after this [week’s] rally,” said Maneesh Deshpande, Barclays’ chief U.S. equity strategist, in a note. “Two other uncertainties facing investors (the length of the economic quarantine required to contain the virus and the ultimate economic damage) remain unresolved. Bear market ‘head-fake’ rallies are not uncommon.” Kevin Caron, portfolio manager for Washington Crossing, said, “The excitement of the last week has been the rolling out of this stimulus package, but we can’t lose sight of the fact that we’re not done yet. The data is going to look pretty darn bad the next couple of months.”
One new piece of economic data out this morning showed that U.S. consumer sentiment slumped by the most since October 2008 as the coronavirus outbreak takes a toll on the economy. The University of Michigan’s sentiment index for the month slumped 11.9 points to a three-year low of 89.1, while economists expected a decline to 90. The report offers a stark picture of the economic halt caused by the coronavirus outbreak and how it’s impacting consumers’ attitudes. The figure for March represents a drastic change from just a month ago when a strong job market and cheap fuel contributed to the second-highest sentiment reading since 2004. “The outlook for the national economy for the year ahead changed dramatically in March, with the majority now expecting bad times financially in the entire country,” said Richard Curtin, director of the Michigan sentiment survey. “Perhaps the most important takeaway is that the largest proportion of consumers in nearly 10 years anticipated that the national unemployment rate will increase in the year ahead.” Curtin added, “Stabilizing confidence at its month’s end level will be difficult given surging unemployment and falling household incomes. Mitigating the negative impacts on health and finances may curb rising pessimism, but it will not produce optimism.”
House members are scrambling to get back to Washington this morning as one member’s opposition to the Senate’s $2 trillion coronavirus stimulus package threatened to delay its passage. The House had hoped to approve the massive bill quickly today without a recorded vote, but Kentucky Rep. Thomas Massie indicated he would oppose the bill. “Heading to Washington to vote on pandemic legislation,” Rep. Peter King, R-N.Y., tweeted this morning. “Because of one Member of Congress refusing to allow emergency action entire Congress must be called back to vote in House. Risk of infection and risk of legislation being delayed. Disgraceful. Irresponsible.”
The U.S. surpassed both China and Italy to become the country with the most confirmed cases of COVID-19 as cases rose to more than 86,000. Globally, cases have risen to more than 542,700. Mayer Bill de Blasio of New York City, which accounts for roughly a quarter of all cases in the U.S., said new infections will be “astronomical” and pleaded for more ventilators from the federal government as cases in the city surged past 23,000. “Our health toll curve is now worse than when China was at the same stage,” said Dr. Atul Gawande, CEO of Haven, the joint healthcare venture between JPMorgan, Amazon, and Berkshire Hathaway. “We have 12 states with more than 1,500 cases. China had one province. … We really need a national shelter in place” order to curb the spread of the deadly virus. The World Health Organization appealed for a strong attack against the coronavirus, with Director-General Tedros Adhanom Ghebreyesus calling for shutdowns, as well as more aggressive measures to eradicate the virus, while also urging countries to remove export bans on medical equipment to ensure fair distribution and to test all suspected cases. Tedros told G-20 leaders to “fight like hell” and said COVID-19 could “tear us apart if we let it,” adding that millions of people could die without stronger actions and that the leaders’ own lives depended on it. International Monetary Fund chief Kristalina Georgieva said today that the global economy is now in a recession due to the COVID-19 pandemic, and said that only coordinated effort will be able to stem the spread of the coronavirus. “We have stated that the world is now in recession and that the length and depth of this recession depends on two things: Containing the virus and having an effective, coordinated response to the crisis. … We should not go… with small measures now when we know that it is a gigantic crisis. We’ve never seen the world economy standing still. Now we [do]. How we go about revitalizing it is another important topic.”
The CEO of Novartis said that it’s “too soon” to be sure whether two of its anti-malaria drugs could be the definitive vaccine for COVID-19 after President Donald Trump touted the drugs as a “game-changer” for the global outbreak. “I do think it is too soon to know for sure until we have properly controlled randomized studies,” said Vas Narasimhan, Novartis CEO. “We hope over the next 18 months to two years, we can come back with a vaccine that will ultimately be the definitive way to deal with this pandemic. …With hydroxychloroquine, what we know is in pre-clinical studies, the drug is quite active against the coronavirus but these are, of course, not in human beings – not in patients.” Hydroxychloroquine is a derivative of Chloroquine, a drug that was approved by the FDA in 1949 to treat malaria that is also often used to treat rheumatoid arthritis and lupus.
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Biosig Technologies (NASDAQ: BSGM): Biosig Technologies shares are up a whopping 107% this week after the medical technologies company announced that its NeuroClear Technologies subsidiary had acquired the rights to develop a novel pharmaceutical to treat COVD-19 called Vicromax, which has demonstrated strong activity against the virus in cell cultures in laboratory settings. “Stopping the COVID-19 pandemic and preventing similar viral threats in the future must be the number-one priority of all of us in the healthcare community,” said Kenneth L. Londoner, Chairman and CEO of BioSig Technologies, Inc. “This very promising anti-viral is the result of tireless efforts by an accomplished group of pharmaceutical industry veterans, and we are doing everything in our power to ensure it gets tested and brought to market as soon as possible.”