Democrats Are About To Put Forth A New $2.4 Trillion Stimulus Bill

Plus, Goldman Sachs said fears that a delayed U.S. election result could upend the stock market are overblown, Novavax entered a late stage trial for its coronavirus vaccine candidate, and Amazon announced two new Fire TV sticks.

Stocks were lower to start Friday with the Dow trading 88 points lower, or 0.3%. The S&P 500 slid 0.2%, and the Nasdaq hovered just below the flatline.

Giving it another go. House Democrats are prepping a new $2.4 trillion stimulus package in an attempt to forge ahead with negotiations with the Trump administration. The bill will reportedly include enhanced unemployment insurance, direct payments to Americans, Paycheck Protection Program small business loan funding, and aid to airlines, among other provisions. The bill, which shaves $1 trillion off the $3.4 trillion package the House passed in May, could be voted on by the chamber next week, and while it is expected to pass the House, it’s unlikely to gain traction in the Senate as it remains much larger than what Senate Republicans have said they would accept. “When you are talking about $2.2 trillion and $1.5 trillion, you are in deal-making territory,” said Democratic Representative Dan Kildee. Treasury Secretary Steven Mnuchin said during a Senate Banking Committee hearing yesterday that a targeted pandemic relief package was “still needed,” adding, “If the Democrats are willing to sit down, I’m willing to sit down any time for bipartisan legislation. Let’s pass something quickly.”

Goldman Sachs said in a note yesterday that fears that a delayed U.S. election result could upend markets are overestimated. While a delayed outcome is a “tail risk,” economists Michael Cahill and Alec Phillips said that a combination of early results, voter turnout, county-level data, and the high correlation of polling errors across states suggests investors will have enough information on election night to determine the likely victor of the presidential election. “It seems fairly likely that there should be enough information on election night from states that will report results quickly for the market to be able to gauge the likely winner. In other words, the S&P can trade the likely outcome, even if the AP does not call the race,” the Goldman economists wrote. “While we recognize that an especially uncertain election outcome could have a significant negative impact on risk sentiment, we think this outcome is less likely than current market pricing—and client conversations—seem to imply.”

Another COVID-19 vaccine candidate entered late-stage clinical trials. Novavax said Thursday that it will begin the Phase 3 trial of its vaccine candidate with 10,000 volunteers in the U.K., with a trial of 30,000 volunteers beginning next month in the U.S. if regulators are satisfied with the safety showing of the Phase 2 trial that’s currently underway here. “Just because you’re first, doesn’t mean you have the best vaccine,” said Novavax financial chief John Trizzino. “And just because you’re first, doesn’t mean that you’re going to be sucking all of the demand out of the marketplace, right?” In other vaccine news, AstraZeneca won partial immunity over side-effects from its potential COVID-19 vaccine in the European Union, with EU states paying part of legal bills in case of problems. Unexpected side-effects after a drug has regulatory approval are rare, however the speed at which a COVID-19 vaccine is being pursued increases the risks of unforeseen conditions. The deal with AstraZeneca, which shifts some of the risks involved in the rapid roll-out of a vaccine to taxpayers, means the company would only pay legal costs up to a certain threshold.

Amazon presented two new Fire TV products during its big online hardware event yesterday that offer a redesigned home screen. The new features announced Thursday will be available later this year, starting with the new Fire TV Stick and Fire TV Stick Lite, which begin shipping next week, with the changes also coming to existing Fire TV devices, beginning in the first quarter of 2021. “Today, you can search for comedies, or stuff by Tom Cruise, but we’ve tried to make a landing spot for when you don’t know what you want to watch,” said Sandeep Gupta, Amazon’s vice president and general manager of Fire TV. “This shows you stuff that’s free, movies and TV shows, broader categories, apps and more.” In addition to the updated software on the Fire TV sticks, Amazon also announced video chat support for its Fire TV Cube devices, enabling users to add a Logitech webcam for video chat through Fire TV.

And in a world-first, a hydrogen fuel-cell plane that’s capable of carrying passengers completed its maiden flight this week, in another step forward for low and zero-emission flight. ZeroAvia’s six-seater Piper M-class aircraft has been retrofitted with a device that combines hydrogen and oxygen to produce electricity. The aircraft undertook a taxi, take-off, full pattern circuit, and landing yesterday. “While some experimental aircraft have flown using hydrogen fuel cells as a power source, the size of this commercially available aircraft shows that paying passengers could be boarding a truly zero-emission flight very soon,” said Val Miftakhov, CEO of ZeroAvia, in a statement. The next step for the company’s HyFlyer project will see it work toward carrying out a flight of between 250 and 300 nautical miles from the Orkney Islands, an archipelago located in waters off the north coast of mainland Scotland with hopes for the flight to take place before the end of 2020.

Stocks We’re Watching

Exact Sciences (NASDAQ: EXAS): Exact Sciences shares skyrocketed as much as 29% yesterday after the cancer-screening-technology company presented at Cowen’s Liquid Biopsy Summit. At the summit, CEO Kevin Conroy unveiled data for its liquid biopsy that detected multiple cancers from a blood sample, a move that could further establish the diagnostics company as a heavyweight in the industry. Cowen analyst Doug Schenkel said Exact Sciences’ data was “new and exciting,” adding that the firm “took a big step today to declare its intent to be a major liquid biopsy company.”

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