Plus, Fed Chairman Powell said the U.S. economy could shrink 30% in the second quarter, oil surged to a two-month high, and FedEx and Microsoft are teaming up to “transform commerce” with a new data service.
Stocks rallied to start Monday with the Dow gaining 700 points, or nearly 3%. The S&P 500 added 2.6%, while the Nasdaq traded 2.1% higher.
Stocks surged on positive news from Moderna on its early-stage human trial for its coronavirus vaccine, sending the stock up more than 23%. Moderna reported that the vaccine candidate produced COVID-19 antibodies in all 45 trial participants, with those being given the 100 mg dose showing antibodies that “significantly exceeded levels” seen in recovered COVID-19 patients. The vaccine also produced neutralizing antibodies against the deadly virus in at least 8 of the participants. “These interim Phase 1 data, while early, demonstrate that vaccination with mRNA-1273 elicits an immune response of the magnitude caused by natural infection starting with a dose as low as 25 [micrograms],” said Moderna chief medical officer Dr. Tal Zaks in a statement. “When combined with the success in preventing viral replication in the lungs of a pre-clinical challenge model at a dose that elicited similar levels of neutralizing antibodies, these data substantiate our belief that mRNA-1273 has the potential to prevent COVID-19 disease and advance our ability to select a dose for pivotal trials.” The company says it will begin its Phase 3 trial for the vaccine in July, and hopes to have doses ready for an emergency use authorization in the fall.
Fed Chairman Jerome Powell said the U.S. economy could shrink by upwards of 30% in the second quarter due to the coronavirus, and the economic recovery stretching through the end of next year depending on the delivery of a vaccine. “Assuming there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of this year,” Powell said on CBS’s “Face the Nation” and “60 Minutes” which aired Sunday. “For the economy to fully recover people will have to be fully confident, and that may have to await the arrival of a vaccine.” Powell added that the Federal Reserve—which has already slashed interest rates to zero, flooded financial markets with trillions of dollars in liquidity, and unveiled nine emergency lending facilities to keep the economy afloat amid the crisis—still has options for aiding the economy available. “There’s a lot more we can do. We’ve done what we can as we go. But I will say that we’re not out of ammunition by a long shot,” Powell said. “This economy will recover. It may take a while. It could stretch through the end of next year. We really don’t know.”
The Trump administration kicked its rhetoric against China up a notch over the weekend. Top Trump trade adviser Peter Navarro suggested that Beijing sent airline passengers to spread the infection worldwide in an interview with ABC’s “This Week.” “The virus was spawned in Wuhan province, patient zero was in November,” Navarro said. “The Chinese, behind the shield of the World Health Organization, for two months hid the virus from the world and then sent hundreds of thousands of Chinese on aircraft to Milan, New York and around the world to seed that.” However, researchers at New York University found last month that the explosion of COVID-19 cases in the New York City area—the hardest hit city in the U.S.—resulted largely from infected patients who flew in from European countries including the U.K., France, Austria, and the Netherlands. “They could have kept it in Wuhan. Instead, it became a pandemic. That’s why I say the Chinese did that to Americans and they are responsible.” More accusations against China may emerge at the World Health Organization’s two-day 73rd World Health Assembly, kicking off today.
Oil surged more than 12% to a two-month high of $33 per barrel for West Texas Intermediate today, one day ahead of the June futures contracts expiration as easing of stay-at-home restrictions increases demand and production cuts supports prices. “Producers are significantly throttling back output and, with demand increasing, the market is on a slow path towards recover,” said Rystad Energy senior oil markets analyst Paola Rodriguez Masiu. “Faced with meager demand and unattractive low prices, production curtailments came faster and deeper than initially anticipated.” The rebound in oil has been so sharp that it’s easy to forget that oil plunged into negative territory this time last month. “We’ve gone full 180 and rather than plunging to new depths, the rally is only gaining momentum,” said Oanda analyst Craig Erlam. “The supply cuts of the last month combined with gradual reopening of various countries around the world has put a significant dent in the supply/demand imbalance and alleviated capacity concerns that led to last month’s panic.”
FedEx and Microsoft announced they are teaming up to “transform commerce” through FedEx’s logistics network and Microsoft’s Azure cloud technology. The service will give big and small companies alike real-time data to determine ways to improve how they move goods by giving early warnings of delays from weather, traffic, and other mishaps. “A lot of insight, a lot of intelligence, hides in this data,” said Raj Subramaniam, FedEx’s chief operating officer. “Our work together will dramatically improve our visibility and agility across the global supply chain.” The offering, called FedEx Surround, won’t cost customers extra and will roll out broadly later this year after a pilot program over the summer.
Stocks We’re Watching
Sorrento Therapeutics (NASDAQ: SRNE): Sorrento Therapeutics shares are up nearly 18% this morning following the stunning 158% surge on Friday after the biotech said it may have hit on a highly effective preventative treatment for COVID-19. Sorrento announced Friday that its anti-SARS-CoV-2 antibody, STI-1499, demonstrated 100% inhibition of SARS-CoV-2 virus infection in an in vitro virus infection experiment. “Our STI-1499 antibody shows exceptional therapeutic potential and could potentially save lives following receipt of necessary regulatory approvals,” said Sorrento Chairman and CEO, Dr. Henry Ji. “We at Sorrento are working day and night to compete the steps necessary to get this product candidate approved and available to the waiting public.”