Plus, President Trump issued an executive order banning TikTok and WeChat, July job gains came in just under 1.8 million, and coronavirus relief bill talks have stalled.
Stocks were lower to start Friday with the Dow dropping 151 points, or 0.6%. The S&P 500 and Nasdaq both traded 0.3% lower.
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Banned. President Donald Trump yesterday issued executive orders banning U.S. transactions with TikTok owner ByteDance, and Chinese messaging app WeChat, owned by Tencent. The ban will take effect in 45 days, and marks a significant escalation by Trump in his confrontation with Beijing as the U.S. seeks to curb China’s power in global technology. TikTok has threatened legal action against the executive order banning it from doing business with U.S. firms, saying it was “shocked” by the order that it says came with “no due process or adherence to the law” from the Trump administration. “This Executive Order risks undermining global businesses’ trust in the United States’ commitment to the rule of law, which has served as a magnet for investment and spurred decades of American economic growth,” TikTok said in a blog post. Trump’s ban of WeChat could potentially impact billions of people as the app serves as a communication method among people in the world’s two largest economies. “This move points to a hegemonic war – the U.S. is trying to suppress China’s rise as a super power,” said Yik Chan Chin, who researches global media and communications policy at the Xi’an Jiaotong-Liverpool University in Suzhou. “All these things will leave a bad impression in China, and the tide of nationalism is already very high right now.”
The Labor Department reported nonfarm payrolls increased 1.763 million for the month of July. the unemployment rate fell to 10.2% from its previous 11.1% in June. The consensus was for gains of 1.48 million and an unemployment rate of 10.6%. July’s report “confirms that the resurgence in new virus cases caused the economic recovery to slow, but also underlines that it has not yet gone into reverse,” said Andrew Hunter, senior U.S. economist at Capital Economics. “With new infections now trending clearly lower again and high-frequency activity indicators showing tentative signs of a renewed upturn, employment should continue to rebound over the coming months.” However, CNBC’s Jim Cramer said of the jobs report, “I don’t see anything here that makes me feel confident,” referring to sectors that showed strong employment gains, including eating and drinking establishments and retail. “Drinking places are all being shut. That is just a huge part of the equation. They had the nonessential [retailers] come back. Well, how are those guys doing? Horribly. I suspect that we’ll see big layoffs there,” Cramer said. “I’ve been completely focused on the idea that you should open up America with masks and with social distancing. But these numbers show you that if we close it, if we do have too many hot spots, we’re right back down. I’m not as encouraged as other people about this. … I think that it’s really important to keep the fire to the feet of these congresspeople because boy, I think this is the last good” monthly jobs report.
Speaking of those congresspeople, negotiations on the next coronavirus relief deal have ground to a near halt, and it is unclear whether the two sides will resume talks today to try to strike a deal ahead of their self-imposed deadline. After a more than three-hour meeting yesterday, House Speaker Nancy Pelosi, Senate Minority Leader Chuck Schumer, Treasury Secretary Steven Mnuchin, and White House chief of staff Mark Meadows painted a bleak picture of relief talks that have accomplished little over the last week and a half. “We have always said that the Republican and the president do not understand the gravity of the situation and every time that we have met, it has been reinforced,” Pelosi said after the meeting. Mnuchin said, “I think there is a lot of issues we are close to a compromise position on, but I think there are a handful of very big issues that we are still very far apart.”
On the coronavirus front, as confirmed cases in the U.S. rise to nearly 4.9 million, Pfizer has agreed to manufacture and supply Gilead Sciences’ antiviral drug remdesivir, a drug that has been shown to help shorten the recovery time of some hospitalized coronavirus patients. “From the beginning it was clear that no one company or innovation would be able to bring an end to the COVID-19 crisis,” said Pfizer CEO Albert Bourla in a statement. “Pfizer’s agreement with Gilead is an excellent example of members of the innovation ecosystem working together to deliver medical solutions. Together, we are more powerful than alone.” There are no FDA-approved drugs for the coronavirus, but remdesivir has been granted emergency use authorization, allowing it to be used on patients hospitalized with COVID-19. Gilead said it plans to produce more than 2 million remedisivir treatment courses by the end of this year, and said it anticipates being able to make “several million more” in 2021.
And Biogen shares are up more than 9.5% this morning after it said the FDA has granted an expedited review for the market application of its Alzheimer’s drug, aducanumab. If approved, aducanumab would be the first treatment designed to delay progression of the fatal, mind-robbing disease, which is expected to affect 13.9 million Americans by 2060. The agency is expected to take a decision by March 7, 2021, though Biogen said the FDA “has stated that, if possible, it plans to act early on this application under an expedited review.” Biogen CEO Michel Vounatsos said in a statement, “The FDA’s acceptance of the aducanumab BLA with Priority Review is an important step in the path to potentially having a treatment that meaningfully changes the course of Alzheimer’s disease.” With no medications currently available to slow the progression of the disease, demand for a therapy like aducanumab would be substantial if it is approved.
Stocks We’re Watching
Cryoport Inc (NASDAQ: CYRX): Cryoport shares got a boost yesterday after it delivered second quarter earnings results. “For the Second Quarter of 2020, we reported revenue of $9.4 million, an increase of 11% from the Second Quarter of 2019. This was largely driven by revenue from our biopharma segment. We are pleased to have achieved these solid results and to have provided advanced temperature-controlled supply chain services to deliver high-value therapies to eligible patients across our clinical and commercial portfolios globally and without disruption,” said Jerrell Shelton, Chairman and CEO, in the earnings release. “Our Second Quarter results reflect the strength and resilience of our company where we saw continued year-over-year growth despite the challenging environment caused by the COVID-19 pandemic. Thanks to the tireless work of our colleagues around the world, we continue to successfully navigate the external realities, and we remain focused on our mission of supporting life and health by delivering reliable and comprehensive temperature-controlled supply chain solutions for the life sciences through our innovation, advanced technologies, and global supply chain network.”
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