Plus, health officials warned the protests could exacerbate the coronavirus outbreak in vulnerable communities, China suspended purchases of some U.S. agricultural products amid growing tensions, and Tesla shares are up after the successful SpaceX launch this weekend.
Stocks hovered around the flatline to start Monday with the Dow adding just 20 points, or 0.1%. The Nasdaq also gained just 0.1%, while S&P 500 traded less than 0.1% lower.
Chaos erupted in several cities this weekend following the police killing of George Floyd, with some demonstrators among largely peaceful protestors breaking off to rampage through shopping districts including Rodeo Drive in Beverly Hills and Michigan Avenue in Chicago, while also setting fire to police cars and municipal buildings. The violence prompted major retailers including Apple, Target, and Amazon-owned Whole Foods to announce closing locations in impacted areas temporarily, or adjust store hours around citywide curfews. Target CEO Brian Cornell said in a post on Sunday that the retailer was supporting the more than 200 team members “displaced” by the closure at its Lake Street location in Minneapolis, as well as at others stores that have been “damaged or at risk.” “As a Target team, we’ve huddled, we’ve consoled witnessed horrific scenes similar to what’s playing out now and wept that not enough is changing,” Cornell said. “And as a team we’ve vowed to face pain with purpose.”
The widespread protests over the weekend prompted health officials to warn that the mass gatherings will likely exacerbate the coronavirus outbreak in the most vulnerable communities. “I think there’s going to be a lot of challenges coming out of the events of the past week,” said former FDA Commissioner Dr. Scott Gottlieb. “One of them’s going to be that probably chains of transmission will have gotten lit by large gatherings. I don’t think there’s really a question about that.” In other coronavirus news, Gilead Sciences shares are down more than -4% this morning after the company said its drug remdesivir showed only a limited benefit in a late-stage trial of patients with more moderate cases of COVID-19, which could result in a shift of perceptions of the therapy that has already been approved for use in severe cases of the deadly virus.
The violent protests also sent Axon shares up more than 15% this morning. The law enforcement supplier formerly known as Taser International sells electrical weapons and body cameras for police officers. Oppenheimer praised Axon’s CEO in a note, saying, “CEO Rick Smith has a company vision and personal passion to arm police agencies with technology and disarm them of lethal weapons.” Smith said in a statement over the weekend that, “We empathize with the citizens and communities who are angry and acknowledge the pain and suffering they are experiencing in the wake of this event. I commend those that are showing true leadership by condemning the behavior we saw this week. …We know that our society faces major, deeply entrenched challenges. We will listen and continue to learn how we can be a part of fixing what is broken. We stand for protecting the truth. And protecting life. Everyone deserves to get home safe.”
Chinese government officials told major state-run agricultural companies to suspend purchases of some American farm goods, including soybeans and pork products, as Beijing evaluates the ongoing escalation of tensions with the U.S. over China’s actions over Hong Kong. Chinese state media also hit back at President Donald Trump’s decision to strip Hong Kong of its special status with the U.S., and said that the U.S. should deal with its own problems instead of interfering in other countries’ affairs. “With domestic crises on the rise, (the U.S.) has not forgotten to interfere in the affairs of foreign countries, as well as withdrawing from the world’s largest health organization,” said Chinese Communist Party newspaper, People’s Daily. Chinese state run news agency, Xinhua, also accused the U.S. of trying to use the “Hong Kong card” to curb China’s development. “The United States’ attempt to deter China’s development by interfering in Hong Kong affairs will not succeed,” the agency said.
In a bit of good news from the weekend, Tesla shares have gotten a boost today from the successful rocket launch of SpaceX’s first crewed mission of the Falcon 9 rocket and Crew Dragon spacecraft on Saturday. The launch by the privately-held, Elon Musk-led, SpaceX marks the first time NASA astronauts traveled to space on commercially built equipment, launching a new era in space technology and space investing. The two crew members, Robert Behnken and Douglas Hurley, also successfully docked with the International Space Station on Sunday, and the mission is the second and final test flight of the Crew Dragon spacecraft before SpaceX begins flying astronauts every few months. Other space stocks have seen a boost as well, including Aerojet Rocketdyne, satellite company Maxar Technologies, and space tourism company Virgin Galactic.
Stocks We’re Watching
Trillium Therapeutics (NASDAQ: TRIL): Trillium shares are up nearly 25% since Thursday’s close after the clinical-stage biotech announced data from the ongoing phase 1 dose escalation study of TTI-622 in patients with advanced relapsed refractory lymphoma. “The data emerging from this dose escalation study suggest that TTI-622 is a promising and highly differentiated CD47 blocker,” said Jan Skvarka, President and CCEO of Trillium. “We are seeing strong tolerability, consistent with the red blood cell-sparing property associated with this molecule. Both drug exposure and target engagement have shown dose response relationships. Notably, in addition to the previously reported monotherapy complete response, we have observed a partial response in a second DLBCL patient.”