Plus, President Trump refused to commit to a peaceful transition of power should he lose the November election, last week’s initial jobless claims were higher than expected, and United Airlines is about to start offering rapid coronavirus tests to some fliers to Hawaii.
Stocks were lower to start Thursday with the Dow falling 96 points, or 0.4%. The S&P slipped 0.3%, while the Nasdaq also fell 0.4%.
Election chaos. In a press conference yesterday, President Donald Trump refused to commit to a peaceful transition of power if he loses the 2020 election to Democrat Joe Biden. “We’re going to have to see what happens,” Trump said in response to a reporter’s question at the press conference. As Trump cast doubt on the election, he also predicted that the Supreme Court will decide the outcome of the election and argued that the Senate should confirm his nominee to replace the late Justice Ruth Bader Ginsburg to break a 4 – 4 tie. “I think this will end up in the Supreme Court and I think it’s very important that we have nine justices, and I think the system’s going to go very quickly,” Trump said. In contrast, Republican lawmakers vowed that the presidential transition after the election will occur without disruption in rebuke to Trump. Utah Senator Mitt Romney was the first member of Trump’s party to speak out, tweeting, “Fundamental to democracy is the peaceful transition of power; without that, there is Belarus. Any suggestion that a president might not respect this Constitutional guarantee is both unthinkable and unacceptable.”
Initial jobless claims were higher than expected for last week as the labor market continues its sluggish recovery from the coronavirus pandemic. The Labor Department reported that initial claims for the week ending September 19 came in at 870,000, while economists had expected claims to come in around 850,000. Continuing claims came in at 12.6 million, versus estimates for 12.3 million. “It’s an indicator of the pain that’s still out there,” said Ethan Harris, Bank of America’s head of global economic research. “And it’s consistent with the idea that we’re getting past that phase where we’re kind of rebounding from that shutdown, and now we’re more to the gliding-forward phase with this massive headwind from the labor market.”
As confirmed coronavirus cases near 7 million in the U.S. and 32 million globally, fliers may soon get a glimpse of what traveling during the pandemic could look like in the coming months when United Airlines begins offering COVID-19 tests to its Hawaii-bound passengers in San Francisco, making it the first major U.S. airline to make the tests available to travelers. The catch? The on-the-spot coronavirus testing to Hawaii-bound customers will only be available to those willing to pay an extra $250 to avoid a two-week quarantine on arrival to the island paradise. Elsewhere, a number of airports are implementing trials of quick-fire coronavirus tests, working with airlines to push technologies still being developed as a way to revive stunted international travel. The tests, which can be completed in 30 minutes, are viewed as the best hope for the aviation industry to overcome new travel curbs imposed due to the pandemic. Other initiatives include a Finnish experiment at Helsinki Airport with dogs that can sniff out the virus on travelers.
Olive Garden-parent Darden Restaurants shares are up more than 6% this morning after the restaurant chain company reported earnings. Darden posted earnings per share of $0.28 on revenue of $1.53 billion, compared to estimates for earnings per share of $0.05 on revenue of $1.56 billion. While Darden said its fiscal first quarter revenue fell 28%, it said it expects net sales to be down just 18%. In response to the coronavirus crisis, Darden said it has streamlined its menus, adjusted its cost structure, and shrunk its marketing spending by more than $40 million. Even as Olive Garden, which accounts for roughly half of Darden’s revenue, saw its same-store sales decline by 28%, its off-premise sales more than doubled and made up around 45% of the pasta chain’s total sales. “We see a pretty resilient consumer our there,” said CEO Gene Lee on a conference call with analysts. “I know that it’s hard to imagine for you guys up in New York, but that’s not what we see in the rest of the country.”
And Nikola shares are down around 10% today after the electric truck maker got its first sell-equivalent rating on Wall Street. Wedbush analyst Dan Ives cut his rating on Nikola from Hold to the equivalent of Sell, and slashed his price target from $45 to $15. “It has been a Twilight Zone-like few weeks for Nikola investors as the company has seen some highs with the flagship GM partnership announcement followed by the shocker that founder and former Chairman Trevor Milton was leaving the company,” Ives wrote in a note. “The recent questions surrounding the Nikola story raised by the bears will be a dark cloud over the stock until unanswered, especially with no fundamental or delivery catalysts in the near-term.”
Stocks We’re Watching
Aslan Pharmaceuticals Ltd (NASDAQ: ASLN): Aslan Pharmaceuticals shares are up more than 27% over the last week after the Singapore-based biotech announced earlier this week that its clinical sites in the U.S. and Australia are open and ready to enroll patients into the company’s multiple ascending dose (MAD) study testing the first-in-class therapeutic antibody ASLAN004 in moderate to severe atopic dermatitis (AD) patients. “The speed at which we have been able to fully recruit the second cohort of the MAD study since restrictions lifted in Singapore last month reaffirms the scale of the demand by patients and the interest of physicians for innovative treatments for AD,” said Dr. Kenneth Kobayashi, Chief Medical Officer, Aslan Pharmaceuticals, in a statement. “We accelerated our plans to open new study sites in the U.S. and Australia, and are pleased that the sites are now ready to recruit.”