Plus, oil is climbing again on reports that OPEC+ is meeting Monday to discuss production cuts, 3M said it is increasing production capacity for its masks for healthcare providers to 50 million per month, and Tesla delivered more vehicles than expected in the first quarter.
Stocks sank lower to start Friday with the Dow falling 319 points, or 1.5%, in volatile trading. The S&P 500 slid 1.2%, while the Nasdaq dropped 1%.
U.S. nonfarm payrolls fell 701,000 in March, marking the worst jobs report since 2009, though the report fails to capture the full extent of the widespread damage the coronavirus pandemic has already begun to wreak on the labor market. As the reference period for the jobs report is based on the 12th of the month, the March data captured only a fraction of the joblessness across the country as roughly 10 million people have filed for unemployment benefits in the last two weeks alone. The Labor Department’s figure represents a dramatic shift from February, when job gains topped 200,000 with employers having difficulty finding qualified workers. “The abruptness with which the economy has taken this step down is so striking,” said FS Investments Inc. Chief U.S. Economist Lara Rhame. “It’s like a hurricane but hitting the entire country at the exact same time.” Given the extent of the economic damage taking shape, House Speaker Nancy Pelosi this morning called for another bill to expand the provisions outlined in the $2 trillion relief package passed last week. “Let’s do what we just agree do, except make it more current,” Pelosi said, calling for more direct payments to individuals, more small business loan funding on top of the $350 million already approved, and to extend the increased unemployment benefits for two more months.
Oil jumped again this morning as reports emerged that OPEC+ plans to meet on Monday to discuss a production cut to stem the historic rout in oil prices. West Texas Intermediate crude gained as much as 12%, while Brent crude rose more than 11%. The cartel is expected to discuss production cuts equivalent to about 10% of global supply, according to Reuters, following President Donald Trump’s statement yesterday that Saudi Arabia and Russia were working on an agreement to reduce production by 10 million to 15 million barrels per day. “President Trump might have been shooting from the hip when he Tweeted about oil yesterday, promoting the idea of a deal too early on negotiations of high complexity that need more time to blossom,” said Rystad Energy’s head of oil markets Bjornar Tonhaugen, while Eurasia Group’s Ayham Kamel said that the most likely path forward would be a “large OPEC+ supply cut that is complimented by a U.S. cut,” though Kamel cautioned that the meeting could also conclude with no deal.
Global cases of the coronavirus have surpassed 1 million, while cases in the U.S. have risen to at least 245,500. New York Governor Andrew Cuomo said this morning that the state saw its highest increase deaths from the virus since the outbreak began, with 2,935 deaths in the last 24 hours. “The curve continues to go up,” Cuomo said at a press conference, as cases there rose 10% overnight to 102,863 confirmed cases, with New York City alone accounting for 57,159 of the total cases in the state. White House coronavirus advisor Dr. Deborah Birx said that as states are ramping up testing, officials are keeping a close eye on which areas of the country look like the next potential hotspots for the virus, including Louisiana, Michigan, Connecticut, Indiana, Georgia, and Illinois. Birx said that the curve in the chart of new cases shows that people aren’t following the guidelines to practice social distancing in some of the hardest hit states. “Not everyone is doing it,” Birx said. “We’re only as strong every community, every county, every state, every American following the guidelines.” Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, also cautioned that Americans shouldn’t assume hydroxychloroquine is a “knockout drug” in preventing or treating COVID-19 and said that he’s worried the hype around the drug could spur a shortage of it for those who need it for a “proven indication.” “We still need to do the definitive studies to determine whether any intervention, not just this one, is truly sad and effective,” Fauci said. “But when you don’t have that information, it’s understandable why people might want to take something anyway even with the slightest hint of being effective.”
President Trump slammed 3M over its production of protective masks and invoked the Defense Production Act. “We hit 3M hard today after seeing what they were doing with their Masks,” Trump tweeted. The company said that it is maximizing its efforts to get respirator masks to U.S. health care workers battling the coronavirus pandemic, ramping up U.S. production capacity to 50 million masks per month by June. “The narrative that we aren’t doing everything we can as a company is just not true,” 3M CEO Mike Roman said to CNBC this morning. “The idea that 3M is not doing all it can to fight price gouging and unauthorized reselling is absurd. The idea that we’re not doing everything we can to maximize deliveries of respirators to our home country – nothing is further from the truth.”
Tesla shares surged as much as 13% this morning after the electric automaker reported that it delivered approximately 88,400 vehicles in the first quarter of 2020, beating expectations for 79,900 deliveries, even as the COVID-19 pandemic forced the company to wind down new car production at its car plants. “I’m shocked they did so well,” said Gene Munster, managing partner of venture capital firm Loup Ventures. “I don’t know how they did it. They had every excuse in the world to put out a bad number.” While Tesla didn’t give an update on whether or not it expects to deliver at least 500,000 vehicles this year, Robert W. Baird analyst Ben Kallo said the move “shows that they don’t have visibility in this environment. Saying nothing is better than saying something at his point.”
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Meridian Bioscience (NASDAQ: VIVO): Meridian Bioscience shares jumped as much as 20% yesterday after the company announced better-than-expected preliminary fiscal Q2 2020 results. For the quarter, the company anticipates revenues of about $57 million, up from $50.2 million in the same period last year, as demand soared for its COVID-19 diagnostic test. “We continue to be proud of the contribution that Meridian is making in the global fight against the COVID-19 pandemic. Our reagents are now included in 35+ diagnostic tests across China, Australia, Europe and the United States, and the Life Science team is working tirelessly to keep up with the demand,” said Jack Kenny, CEO of Meridian Bioscience. “Traction in Diagnostics continues and I look forward to more growth in that segment of the business as we bring new products to market over the next 12 – 24 months.”