Plus, Moderna said its coronavirus vaccine candidate showed a promising immune response in older patients in an early trial, Kansas City Fed President Esther George warned of a double-dip recession, and McDonald’s has reportedly expanded the scope of its investigation against former CEO Easterbrook.
Stocks were mixed to start Wednesday with the Dow falling 9 points, or less than 0.1%. The S&P 500 rose 0.22%, while the Nasdaq added 0.5%.
Moderna said this morning that its coronavirus vaccine candidate generated a promising immune response in elderly patients in an early-stage clinical trial, pushing shares of the biotech up more than 4%. “The whole industry is very focused as to, can we get a vaccine that can protect the elderly. It’s always a big question, and so we are super happy” said Moderna CEO Stephane Bancel, adding that the vaccine produced neutralizing antibody levels in older adults that were “very consistent” with younger adults. “You don’t have some elderly at very high level and some at very low level. One hundred percent of the elderly have high neutralizing antibodies. It’s very tight between people.”
Kansas City Federal Reserve President Esther George said the recession that began in February could revisit the U.S. economy should the coronavirus pandemic intensify this fall. “An important risk to that outlook is thinking about what happens as we come into the fall, whether we see any resurgence in the virus that would cause an additional pullback in the economy,” Georges told CNBC. “We’ll monitor that carefully to see whether that plays out.” George added that while “financial conditions are very accommodative… [and] the Federal Reserve is going to be very vigilant on that and be prepared to respond if they would have to.” Fed Chairman Jerome Powell is slated to provide an update on the central bank’s policies and practices when he speaks tomorrow at its annual Jackson Hole conference, which is being held virtually this year due to the coronavirus pandemic.
White House chief of staff Mark Meadows said the Trump administration is weighing executive actions to help airline employees facing furloughs if Congress doesn’t provide assistance in a new round of stimulus following yesterday’s announcement of 19,000 layoffs by American Airlines. “If Congress is not going to work, this president is going to get to work and solve some problems,” Meadows said. “Hopefully we can help the airlines and keep some of those employees from being furloughed.” Meadows also said he doesn’t think it’s likely Congress will cut a new stimulus deal before the end of September. “If we got back in the room with some of their priorities, we could cut a deal – the president wants to do that. But I’m not optimistic,” Meadows said, adding that he believes House Speaker Nancy Pelosi “is going to hold out until the end of September and try to get what she wants in the funding for the government in the CR or whatever funding mechanism happens to come up at the end of September.”
Salesforce shares are up nearly 27% this morning following the company’s second quarter earnings beat. The enterprise-software company reported earnings per share of $1.44 on revenue of $5.15 billion, surpassing analysts’ expectations for earnings per share of $0.67 on revenue of $4.90 billion. Dick’s Sporting Goods shares are up more than 15% after it reported digital sales surged 194% in its most recent quarter. “During this pandemic, the importance of health and fitness has accelerated and participation in socially distant, outdoor activities has increased,” said CEO Ed Stack in a statement. “There has also been a greater shift toward athletic and active lifestyle product with people spending more time working and exercising at home. The majority of our assortment sits squarely at the center of these trends. We are in a great lane right now.” But it wasn’t all good news on the earnings front. Nordstrom shares are down 6% after the department store chain said its sales fell 53% in its second quarter, leading to a net loss for the period of $255 million, or $1.62 per share, a larger loss than expected.
And McDonald’s is reportedly investigating if former CEO Steve Easterbrook covered up other employees’ improprieties. Earlier this month, the fast food chain said it was suing Easterbrook, who was ousted in November 2019 after admitting to a consensual relationship with one employee, for allegedly covering up and lying about his sexual relationships with three employees in an effort to claw back tens of millions of dollars of the former CEO’s severance money. McDonald’s said in a statement that its board will “follow the facts wherever they may lead,” adding that CEO Chris Kempczinski has appointed a new head of HR and “announced refreshed values with input from employees around the world.”
Stocks We’re Watching
J.M. Smucker Company (NYSE: SJM): J.M. Smucker shares jumped 9% yesterday after the Folgers parent posed an earnings beat. The company reported net income of $237.9 million, or $2.03 per share, for its fiscal first quarter. “We expect continued momentum in the second quarter and are pleased to raise our full-year guidance,” said CEO Mark Smucker in a statement. “We remain confident in our ability to deliver on our fiscal year 2021 goals, advance our long-term strategy, and deliver increased shareholder value.”