Plus, jobless claims were lower than expected for last week though recovery in the labor market appears to be slowing, there’s a glimmer of hope on the stimulus front, and Moderna said it should have data for its late-stage coronavirus vaccine trial in November.
Stocks were lower to start Thursday with the Dow dropping 350 points, or more than 1%. The S&P 500 slid 1.4%, while the Nasdaq fell 1.8%.
President Donald Trump is expected to make a decision on TikTok’s fate in the U.S. in the next 24 to 36 hours, according to a report from CNBC. Trump said yesterday that he’s not happy with what he’s heard about the terms for the Oracle deal announced earlier this week. “Just conceptually, I can tell you I don’t like that,” Trump said to a reporter after the reporter told him TikTok’s Chinese owner, ByteDance, would retain a majority of the social media app’s assets, while Oracle would be acquiring a minority stake and would serve as TikTok’s technology partner in the U.S. “I’m not prepared to sign off on anything,” Trump added, saying that he needs to hear more details of the proposal. White House Chief of Staff Mark Meadows said this morning that he’s concerned the Oracle deal may just be a “repackaging” that won’t meet Trump’s goals. “We’re still looking at the potential details of the deal, and whether it meets the national-security thresholds, the American-interest thresholds,” Meadows said. “My big concern is if all we’re doing is repackaging it and still keeping it as a predominantly Chinese-government run company, that would not set well with the original goal the president outlined.”
Initial jobless claims were lower than expected with filings totaled 860,000 for the week ended September 12, the Labor Department said. “Initial claims came in at 860,000, broadly in line with expectations and down 33,000 from last week. Continuing claims were 12.6 million, beating consensus expectations of 13 [million] and down 1 [million],” said Mohamed El-Erian, chief economic advisor at Allianz, in a tweet. “Bottom line: Recovery continues but at a pace below what’s both needed and possible.” Bloomberg economist Eliza Winger said, “The recovery in the labor market appears to be slowing, but not reversing. …Still, jobs data remain well shy of the pre-pandemic peak, and well-targeted fiscal aid is needed to sustain momentum in spending through year-end and into 2021.”
As jobless gains slow, President Trump said that he was open to more stimulus spending for pandemic relief in stalled talks with congressional Democrats. Trump said at a White House press conference yesterday that he liked “the larger numbers” in a compromise $1.5 trillion stimulus proposal from a bipartisan group of lawmakers that debuted earlier this week. “I agree with a lot of it,” Trump said of the bipartisan plan. “I heard Nancy Pelosi say she doesn’t want to leave until we have an agreement” and “she’s come a long way.” Still, whether Trump’s words will encourage further discussions remains to be seen. White House Chief of Staff Meadows said the $1.5 trillion proposal wasn’t a “show-stopper,” House Speaker Nancy Pelosi called the plan insufficient, and Republican Senator John Thune, the chamber’s second-ranking Republican, said that a large stimulus plan would case “a lot of heartburn” among lawmakers on the GOP side.
Moderna CEO Stephane Bancel said today that the company should have enough data from its late-stage trial to know whether its coronavirus vaccine works in November. While the company could have enough data by October, Bancel added that that’s unlikely. “If the infection rate in the country were to slow down in the next weeks, it could potentially be pushed out in a worst-case scenario in December,” Bancel said. Moderna is one of three drugmakers backed by the U.S. in late-stage trials for a potential coronavirus vaccine, with the other two being Pfizer and AstraZeneca. Bancel also said in a press release that Moderna will also begin developing a vaccine for the seasonal flu. “We are announcing that we are increasing our investment in vaccines and we will develop a seasonal flu vaccine given the unmet need for highly effective vaccines,” Bancel said in the statement.
Biggest software IPO ever. Snowflake shares are down more than 9% just a day after the company’s blockbuster market debut. The cloud company closed up more than 111% yesterday, reaching a valuation of $70.4 billion, but with this morning’s fall, that valuation has fallen to $64 billion. Snowflake CEO Frank Slootman took it all in stride saying, “A stock is worth exactly what somebody wants to pay for it. It’s like talking about the weather, it is what it is. Tomorrow’s another day, we’ll see what it brings.” Snowflake raised more than $3 billion based on its opening price in its market debut yesterday, the most ever for a software company.
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SpringWorks Therapeutics Inc (NASDAQ: SWTX): SpringWorks shares rose nearly 9% yesterday after the biopharma announced a collaboration with the Children’s Oncology Group (COG) to evaluate nirogacestat, an investigational gamma secretes inhibitor, in a Phase 2 clinical trial for the treatment of children and adolescents with progressive, surgically unresectable desmoid tumors. “Desmoid tumors can cause significant morbidities, including severe pain, internal bleeding, incapacitating loss of range of motion, and, in rare cases, death, and there are currently no approved therapies for patients suffering from this rare tumor,” said Saqib Islam, Chief Executive Officer of SpringWorks. “We are encouraged by the case reports published on the pediatric patients treated with nirogacestat under our Expanded Access Program and are pleased to be collaborating with COG to further explore the clinical benefit of nirogacestat in pediatric and adolescent patients with desmoid tumors. In addition to our ongoing Phase 3 DeFi trial evaluating nirogacestat in adults with progressing desmoid tumors, which is now fully enrolled, this new Phase 2 trial provides an opportunity to further evaluate the potential benefit of nirogacestat for desmoid tumors.”