Plus, the U.S. reported a record number of new confirmed coronavirus cases, the FAA and Boeing completed the test flights of the 737 Max, Tesla is up after saying it delivered 90,650 vehicles in the second quarter, and PG&E shares are up after the utility emerges from bankruptcy.
Stocks were higher to start Thursday with the Dow gaining 269 points, or 1.1%. The S&P 500 also added 1.1%, while the Nasdaq rose more than 1% to a new record high.
Nonfarm payrolls rose by 4.8 million in June as the unemployment rate fell to 11.1%, the Labor Department reported this morning. “The 4.8 million rise in nonfarm payrolls in June provides further confirmation that the initial economic rebound has been far faster than we and most others anticipated,” said Michael Pearce, senior U.S. economist at Capital Economics. “But that still leaves employment 9.6% below its February level and with the spread of the virus accelerating again, we expect the recovery from here will be a lot bumpier and job gains far slower on average.” Indeed, initially jobless claims rose by more than expected in the last full week of June, with the Labor Department reporting claims rose by 1.427 million. Thursday’s data release comes as some states begin to pause or rollback their reopening plans amid a sharp increase in new coronavirus cases.
And that sharp increase has led to the U.S. reporting a record number of new confirmed coronavirus cases. The U.S. reported more than 50,600 additional cases on Wednesday, the largest single-day increase since the beginning of the pandemic. Arizona reported a record spike in new cases, reporting nearly 4,900 new cases and 80 new deaths. “We can’t be under any illusion that this virus is going to go away on its own,” said Arizona Governor Doug Ducey when announcing the state’s reopening rollback on Monday. “Our expectation is that next week our numbers will be worse. It will take several weeks for the mitigation that we have put in place and are putting in place to take effect.” Despite the recent surge in cases of the deadly virus and states’ moves to pause or rollback reopening efforts, Vice President Mike Pence said today that the Trump administration would “keep opening up America,” adding that the administration will stay with state leaders “every step of the way as they continue to take steps to mitigate the expansion of the coronavirus.”
The FAA and Boeing have completed certification test flights on the 737 Max, marking a key milestone toward the plane’s—which has been grounded since March 2019 after two fatal crashes—return to service. The FAA still needs to evaluate the data from the three days of testing, and there are other tasks to complete before the plane will be re-certified. “The agency is following a deliberate process and will take the time it needs to thoroughly review Boeing’s work,” the FAA said. “We will lift the grounding order only after FAA safety experts are satisfied that the aircraft meets certification standards.”
Tesla shares are up more than 7% this morning after the electric automaker said it delivered roughly 90,650 vehicles in the second quarter, beating analysts’ expectations for around 83,000 deliveries. It’s an incredible feat amid plant shutdowns induced by the coronavirus pandemic. Wedbush analyst Dan Ives also raised his bull price target for Tesla shares today to $2,000 per share, writing that “Musk & Co. hit a home run” after the deliveries report. “Strong Model 3 demand out of China remains a ray of shining light for Tesla in a dark global macro,” Ives wrote, adding that he believes Tesla can deliver 100,000 Chinese-built Model 3 sedans in the first year of operations at its Shanghai facility. “[The] million-mile battery remains an elusive goal now in the grasp in our opinion,” the analyst added.
And PG&E shares are up nearly 4% today in its first day of trading after emerging from bankruptcy. PG&E filed for Chapter 11 reorganization in January 2019 after its equipment was found to be the cause of deadly and destructive fires in California. The utility’s restructuring plan was approved by the bankruptcy court last month, it will now be able to take part in a state wildfire fund created to cover the costs of future catastrophic wildfires and contributed $5 billion to the fund as part of its emergence from bankruptcy. The payment to the fund and its settlements with insurers and wildfire victims were financed in part with $20 billion of debt and equity sales, and PG&E also has a new board of directors as well as a new interim chief executive in Bill Smith, a retired AT&T Services executive.
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Akero Therapeutics Inc (NASDAQ: AKRO): Akero shares gained as much as 41.7% yesterday after the biotech announced strongly positive results of a 16-week analysis of secondary and exploratory endpoints in its Phase 2a BALANCED study of efruxifermin (EFX) in patients with nonalcoholic steatohepatitis (NASH). Of the 40 study participants, 48% achieved at least a one-stage improvement in fibrosis without worsening of NAFLD activity score, and 28% achieved at least a two-stage improvement. “We believe the BALANCED study data, which exceeded our expectations, demonstrate the strong potential of efruxifermin to be a foundational monotherapy for the treatment of NASH,” said Andrew Cheng, M.D., Ph.D., president and CEO of Akero. “We look forward to the continued development of efruxifermin and are working diligently to deliver this potentially leading treatment to patients. We are extremely grateful to all of our investigators and study patients, particularly given that this study cohort was completed amidst the COVID-19 pandemic.”