Fed’s Kaplan Said The Economy’s Only Hope Is Widespread Mask-Wearing

Plus, the U.S. reported another record jump in new coronavirus cases, Gilead released positive results from an analysis of its remdesivir treatment in patients severely ill with COVID-19, United reached an agreement with its pilots union, and a top Apple analyst issued a new prediction.

Stocks were lower to start Friday with the Dow falling 49 points, or 0.2%. The S&P 500 slipped 0.5%, while the Nasdaq sank 0.9%.

The U.S. reported a daily record of 63,247 new confirmed coronavirus cases on Thursday, marking the second time this week the nation topped its record for new infections reported in a 24-hour period. The surge in cases across America’s Sun Belt has swamped hospitals and exhausted supplies. Quinn Snyder, an emergency physician in Mesa, Arizona said, “We’ve been discussing putting people in fluoroscopy suites, in radiology suites, everything to housing people in tents. We’re rearranging deck chairs on the Titanic as we speak.” Even amid the surge in confirmed cases, former FDA Commissioner Dr. Scott Gottlieb said that he believes there continues to be a significant number of unreported coronavirus cases. “We must have well over 700,000 infections a day, even though we’re only diagnosing about 60,000,” Gottlieb said. “Before, when we had come down, and we were sort of boring around 20,000 diagnosed infections a day, the conventional wisdom was the prevalence was 1 in 200 people. Now, it must be higher than that.” And Dallas Federal Reserve President Robert Kaplan said this morning that the most important thing for the economic recovery going forward is mask-wearing. “If we all wore a mask, it would substantially mute the transmission of this disease and we would grow faster,” Kaplan told Fox Business. “We would have a lower unemployment rate… and we would be less likely to slow more of our reopenings.”

In other coronavirus news, Gilead shares are up nearly 3% this morning after the company said its antiviral drug remdesivir reduced the risk of death for severely sick COVID-19 patients by 62% compared with standard care alone. Gilead’s analysis of the treatment found that it was associated with “significantly improved clinical recovery,” in a data set from 312 patients in its phase three trial. “While not as vigorous as a randomized controlled trial, this analysis importantly draws from a realworld setting and serves as an important adjunct to clinical trial data, adding to our collective understanding of this virus and reflecting the extraordinary pace of the ongoing pandemic,” said Dr. Susan Olender of Columbia University Irving Medical Center in a statement regarding the analysis. Gilead’s findings show that 7.6% of patients treated with remdesivir died, compared with 12.5% of patients in the analysis who did not receive the treatment, while 74.4% of patients who received the treatment recovered from the coronavirus by day 14, versus 59% of patients who received standard care alone. “We are working to broaden our understanding of the full utility of remdesivir,” said Gilead Chief Medical Officer Dr. Merdad Parsey said in a statement. “To address the urgency of the continuing pandemic, we are sharing data with the research community as quickly as possible with the goal of providing transparent and timely updates on new developments with remdesivir.”

The long-running dispute between the U.S. and France over taxes on American technology giants including Amazon, Google-parent Alphabet, and Facebook takes a step forward today. The U.S. is expected to announce further details on its tariff list on $500 million to $700 million in French goods, including such items as wine, cheeses, and handbags. “France’s response will be unchanged,” said Finance Minister Bruno Le Maire. “If there is no international solution by the end of 2020, we will, as we have always said, apply our national tax.” However, one person familiar with the matter said that while an announcement regarding the tariffs may come today, the U.S. may delay implementation of the duties until later this year when France begins collecting its tax. Still, U.S. Trade Representative Robert Lighthizer indicated the tariffs were imminent at an event yesterday. “We’re going to announce that we’re going to be taking certain sanctions against France, suspending them like they’re suspending collection of the taxes right now,” Lighthizer said in a webcast hosted by Chatham House, as reported by Politico. France’s Le Maire said he would be speaking with Lighthizer later today.

United Airlines shares are up more than 5% this morning after the carrier reported that it and the union that represents its roughly 13,000 pilots have reached a tentative agreement on voluntary furloughs and early retirement packages, its latest effort to slash costs as the coronavirus pandemic continues to roil flight demand. Up next, the deal will need to be ratified by union leaders next week, and while the details of the deal weren’t immediately disclosed, it’s likely to resemble pilots’ early retirement packages offered by American, Delta, and Southwest. The announcement comes just a day after United warned 36,000 employees that they could be furloughed in the fall, including the  possible furloughs of more than 2,200 United pilots. “Unfortunately, this may not be the full extent of the furloughs, and we must be prepared for more based on the Company’s plan to be 30 percent smaller next summer,” said Capt. Todd Insler, chairman of the United chapter of the Air Line Pilots Association.

And Apple analyst Ming-Chi Kuo issued a prediction today that the company will launch a new MacBook Pro with its in-house chips in the fourth quarter of this year. Early last month, Apple said that it would be replacing chips from Intel in its new MacBooks with Apple-made processors. “We predict that Apple will launch new MacBook models including the new 13.3-inch MacBook Pro equipped with the Apple Silicon in 4Q20, the new MacBook Air equipped with the Apple Silicon in 4Q20 or 1Q21, and new 14- and 16-inch MacBook Pro models equipped with the Apple Silicon and all-new form factor design in late 2Q21 or 3Q21,” Kuo, who’s an analyst with TF International Securities, said in a note. “In our bull-case scenario, the MacBook shipments in 2021 will markedly increase to 18–20 mn units if Apple lowers the price of MacBook Air equipped with the lower-cost Apple Silicon and the demand for the all-new form factor design 14- and 16-inch MacBook Pro models is better than that of legacy models.”

Stocks We’re Watching

Big 5 Sporting Goods (NASDAQ: BGFV): Big 5 shares jumped as much as 75% yesterday after the sporting goods retailer released upbeat preliminary results for its fiscal second quarter.  “Over the first half of the second quarter, when the impacts of the COVID-19 pandemic forced us to operate with a highly reduced store count, our same store sales decreased by 28.2% compared to the prior year period,” said Big 5 Chairman, President, and CEO, Steven G. Miller. “However, as we reopened stores our product assortment and convenience clearly resonated with consumers and for the second half of the second quarter our same store sales increased by 15.5% compared to the prior year period with very strong merchandise margins. We are pleased that the positive sales and margin momentum in our business has continued into the start of the third quarter.”