Plus, Sorrento Therapeutics is partnering with New York’s Mount Sinai on developing a antibody cocktail to shield health care workers and other front-line workers from the coronavirus, Tesla is resuming production at its Fremont, CA plant, and Disney shares got a boost from tickets selling out within minutes for the reopening of its Shanghai Disneyland park.
Stocks were higher to start Friday with the Dow adding 331 points, or 1.4%. The S&P 500 rose 1.2%, while the Nasdaq traded 1.1% higher.
Stocks rallied this morning despite the dismal April jobs report as the market bets the worst of the coronavirus and its impact on the economy has passed. The Labor Department reported that 20.5 million workers were slashed from nonfarm payrolls in April, pushing the unemployment rate to 14.7%, the highest level since the Great Depression. The numbers paint a “pretty dismal picture, but April may be it for job losses going forward with the country starting to reopen,” said MUFG Union Bank chief financial economist Chris Rupkey. “If there is a silver-lining in today’s dismal jobs report, it is in the realization that the economy cannot possibly get any worse than it is right now.” The torrent of layoffs hit the leisure and hospitality industry the hardest, with the industry losing 7.7 million jobs, or 47% of total positions. “It’s devastating,” said Ryan Sweet, head of monetary policy research at Moody’s Analytics. “There’s someone behind each of these numbers. It’s going to take years to recover from this. There’s a case to be made that a lot of these are temporary layoffs, so hopefully people can return to work quickly as we begin to reopen the economy – but there’s no guarantee in that.”
President Trump cast doubt on the future of his “phase one” trade deal with China this morning, saying that he’s struggling with Beijing amid the global coronavirus pandemic. “Look, I’m having a very hard time with China,” Trump told Fox & Friends. “I made a great trade deal months before this whole thing happened. And it was kicking in, you know, a month ago and starting to kick in and starting to produce and then this happens and it sort of overrides so much.” This followed a call between U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer, and Chinese Vice Premier Liu He to discuss the “phase one” deal that was signed in January. According to the Office of the U.S. Trade Representative, both sides “agreed that in spite of the current global health emergency, both countries fully expect to meet their obligations under the agreement in a timely manner.”
As coronavirus cases in the U.S. rise to more than 1.26 million, Moderna CEO Stephane Bancel said Friday morning that if the company’s vaccine proves to work, the vaccine will be in short supply at least initially. “We will all be supply constrained for quite some time, meaning we won’t be able to make as many product as will be required to vaccinate everyone on the planet,” Bancel said. “In the case of the U.S., we anticipate to work very closely with the government and with key medical officials to decide who gets the vaccine in the first batch. And then when you have the next batch to ship to the government, how do we allocate it between health care workers, people who are high risk and different geographies where you have more cases.” Elsewhere, Sorrento Therapeutics has partnered with Mount Sinai Health System in New York City to develop an antibody cocktail they hope will shield against COVID-19 infection for up to two months. The treatment, called COVI-SHIELD, is designed to be administered as often as necessary, with doses expected to provide antiviral protection for health care and other essential workers.
California Governor Gavin Newsom yesterday laid out a four-phase plan to reopen up the state economy beginning today, giving manufacturing the green light to resume operations as soon as today. And with that green light, Tesla’s HR boss said the electric car maker’s Fremont plant will resume “limited operations” Friday, bringing back around 30% of employees normally working on a shift. “In light of Governor Newsom’s statement earlier today approving manufacturing in California, we will aim to restart production in Fremont tomorrow afternoon,” CEO Elon Musk said in a statement. “I will e on the line personally helping wherever I can. However, if you feel uncomfortable coming back to work at this time, please do not feel obligated to do so. These are difficult times, so thanks very much for working hard to make Tesla successful!”
And Disney shares are up 2% this morning after tickets for Monday’s reopening of Shanghai Disney sold out within minutes. The park has been closed since January 25 amid the coronavirus crisis, and while the park has been granted the ability to open at 30% visitor capacity, Disney’s Bob Chapek said the park will initially operate well below that threshold and then ramp up to reach the 30% cap over the course of the next several weeks. “These developments reaffirm our positive thesis that the reopening of Shanghai Disneyland is the first in several catalysts ahead, and we reiterate our Overweight rating on Disney shares,” said JPMorgan analyst Alexia Quadrani. The analyst has a $135 target price on the stock.
Stocks We’re Watching
Genmark Diagnostics (NASDAQ: GNMK): Genmark shares jumped as much as 38% yesterday after the company announced Q1 results, reporting an 80% year-over-year jump in revenue. “Our 2020 key priorities of strong revenue growth, margin expansion, and technology development remain intact despite the COVID-19 pandemic,” said Scott Mendel, Genmark President and Chief Executive Officer. “We made significant strides on all fronts during the first quarter by delivering molecular diagnostic solutions that enable better patient outcomes for critically ill patients.”