Plus, Treasury Secretary Mnuchin said “we can’t shut down the economy again” for a second wave, weekly jobless claims came in at more than 1.5 million, and Regeneron said it started the first clinical trial of its coronavirus antibody treatment.
Stocks fell to start Thursday, with the Dow currently down 975 points, or 3.61%. The S&P 500 has sunk 3%, while the Nasdaq has slipped 2.1% lower.
Stocks opened lower on fears of an emerging second wave of coronavirus cases in the U.S. As cases surpass 2 million, states including Arizona, Texas, Florida, and California, are showing evidence of a second wave building. Arizona “sticks out like a sore thumb in terms of a major problem,” said Jeffrey Morris, director of the division of biostatistics at University of Pennsylvania’s Perelman School of Medicine, as cases there have spiked in the last two weeks. Texas reported its highest number of new cases, 2,504, in a single day on Wednesday, while California saw its hospitalizations rise to their highest level in nearly a month. “The second wave isn’t going to mirror the first wave exactly,” said Lance Waller, a professor at Emory University’s Rollins School of Public Health in Atlanta. “It’s not snapping back to exactly the same thing as before, because we’re not exactly the way we were before.”
Even with a second wave emerging, Treasury Secretary Steven Mnuchin said today that shutting down the economy for a second time to slow the spread of COVID-19 isn’t an option as it would cause even more headaches for the nation. “We can’t shut down the economy again,” Mnuchin said. “I think we’ve learned that if you shut down the economy, you’re going to create more damage. And not just economic damage, but there are other areas and we’ve talked about this: medical problems and everything else that gets put on hold.” While the White House and Republican negotiators pushed back a new round of coronavirus relief talks until late July, Mnuchin testified yesterday to the Senate Small Business and Entrepreneurship Committee that more stimulus will be needed, especially for travel, retail, and leisure businesses, as well as more cash for American families. “I do think the economy is going to rebound significantly, but there is still significant damage in parts of the economy,” he said.
Applications for U.S. unemployment benefits eased a bit last week, even as businesses reopened from shutdowns from the initial wave of coronavirus cases. Initial jobless claims totaled 1.54 million for the week ending June 6, according to the Labor Department, while continuing claims to 20.9 million. Federal Reserve Chairman Jerome Powell said yesterday that he has concerns about longer-term unemployment challenges in the wake of the pandemic. “My assumption is that there will be a significant chunk, well, well into the millions of people who don’t get to go back to their old jobs and there may not be a job in that industry for them for some time. It could be some years before we get back to those people finding jobs.”
In a bright spot amid the ongoing coronavirus crisis, Regeneron said today that it has started the first clinical trial of its experimental COVID-19 antibody drug. The antibody cocktail is being tested in four human populations, with two groups receiving the drug to test its effectiveness as a treatment for the deadly virus, and two receiving it as a possible prevention. Regeneron chief scientific officer, Dr. George Yancopoulos, said that the company is hopeful they’ll be able to “quickly test the safety and then start understanding the efficacy for four major different settings of this virus challenge.” Yancopoulos added that “if all goes well,” Regeneron could have “definitive data” within a few months on the effectiveness of the antibody cocktail. “I think there’s a lot of reason for hope,” he said. Elsewhere, Moderna confirmed that it plans to start a trial of 30,000 volunteers of its much-anticipated coronavirus vaccine in July as it enters its final stage of testing.
And Boeing shares are down more than -10% this morning after news broke that a key supplier —Spirit AeroSystems—for the 737 MAX was asked to halt work related to the grounded plane, potentially putting the existing timeline for the troubled plane’s reintroduction to service, as well as deliveries that had been expected this year and next, at risk. Spirit said it received a letter from Boeing directing it to “pause additional work on four 737 MAX shipsets and avoid starting production on 16 737 MAX shipsets to be delivered in 2020. … Based on the information in the letter, subsequent correspondence from Boeing data June 9, 2020, and Spirit’s discussions with Boeing regarding 2020 737 MAX production, Spirit believes there will be a reduction to Spirit’s previously disclosed 2020 737 MAX production plan of 125 shipsets.”
Stocks We’re Watching
EyeGate Pharma (NASDAQ: EYEG): EyeGate shares are up more than 2% this morning after the clinical-stage biotech announced it has received positive feedback from the FDA regarding the requested packaging for EyeGate’s Ocular Bandage Gel eye drop. “We are very pleased with this positive feedback from the FDA. With their comments, there is a clear path forward for using the multi-dose preservative-free bottle in future clinical studies and ultimately in commercialization,” said Stephen From, EyeGate’s CEO. “We believe that using this packaging will dramatically reduce our cost of goods sold, providing us with more financial flexibility as we continue the development of OBG.”