Plus, House Democrats unveiled their latest coronavirus relief bill, Sanofi said the U.S. will get its COVID-19 vaccine before the rest of the world if successful, JCPenney is talking with lenders ahead of an expected bankruptcy filing, and Tesla won its battle to start reopening its Fremont, CA plant.
Stocks were mixed to start Wednesday with the Dow dropping 150 points, or 0.6%. The S&P 500 slipped 0.4%, while the Nasdaq added 0.4%.
Federal Reserve Chairman Jerome Powell said this morning that the U.S. economy faces unprecedented risks if fiscal and monetary policy makers don’t rise to the challenge. “The recovery may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems,” Powell said at a virtual event hosted by the Peterson Institute for International Economics. “Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery.” Powell pushed back against calls for the Fed to take rates negative saying, “I know there are fans of the policy, but for now it’s not something that we’re considering.” Instead, policymakers may have to use additional weapons to pull the country out of an economic crisis that has cost the nation at least 20 million jobs and has caused “a level of pain that is hard to capture in words,” Powell said.
House Democrats unveiled their latest coronavirus relief bill late yesterday. The bill includes another round of direct payments of $1,200 per person, nearly $1 trillion in relief for state and local governments, around $200 billion in hazard pay for essential workers facing heightened health risks amid the pandemic, $75 billion for coronavirus testing and contact tracing, an extension of the $600 per week federal unemployment insurance benefit through January 2021, relief for the U.S. Postal Service, and funds for election safety and provisions to make voting by mail easier. House Speaker Nancy Pelosi said Congress has a “momentous opportunity” to help meet peoples needs amid the coronavirus crisis, and that “not acting is the most expensive course” as Republicans grow weary of more spending.
As coronavirus cases in the U.S. approach 1.4 million people, Sanofi said Americans are likely to get its COVID-19 vaccine before the rest of the world if they are able to successfully produce one. The French pharmaceutical giant said that this was because the U.S. was the first in line to fund Sanofi’s vaccine research, said CEO Paul Hudson in an interview with Bloomberg. “The U.S. government has the right to the largest pre-order because it’s invested in taking the risk,” Hudson said, adding that the U.S. expects “that if we’ve helped you manufacture the doses at risk, we expect to get the doses first.”
JCPenney shares are up nearly 21% as of this writing after news broke that it is in talks with key lenders to secure $450 million in financing for an expected bankruptcy filing. The struggling department store chain is expected to file as soon as Friday, according to a report from CNBC. As part of the discussions with its lenders, JCPenney would be able to draw $225 million of its bankruptcy loan on day one and will receive the rest of the funds depending on how the company does against its budget, protecting the lenders if JCPenney falls short. JCPenney operates 846 department stores and roughly 90,000 employees, and is working on a plan to close between 180 and 200 stores while in bankruptcy.
Tesla was given the green light to prepare to restart its Fremont car plant next week, winding down CEO Elon Musk’s battle with authority. Alameda said in a statement yesterday afternoon that it has “agreed Tesla can begin to augment their Minimum Business Operations this week in preparation for a possible reopening as soon as next week.” While it’s unclear if Tesla will face any punishment for reopening the plant on Monday in defiance of county orders, the electric car maker said in a press release that public health indicators will have to remain stable or improver for the factory to stay open. “We will be working with the Fremont PD to verify Tesla is adhering to physical distancing and that agreed-upon health and safety measures are in place for the safety of their workers as they prepare for full production,” the press release said.
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Altimmune Inc (NASDAQ: ALT): Altimmune shares are up 39% over the last two days after the clinical stage biopharmaceutical company announced it has appointed former Pfizer and Glaxo Smith Kline executive Dr. Diane Jorkasky to its board of directors. “We are excited to welcome Diane to the Board of Directors. Her deep development experience across multiple therapeutic areas will be a tremendous asset to Altimmune,” said CEO and President Vipin K. Garg, PhD. “We look forward to Diane’s contributions to the Board as we continue the important work of developing our liver disease and vaccine programs.”