Plus, the Treasury Department demanded the return of money the government provides to the Fed for lending to certain markets in times of stress, the U.S. set a new daily coronavirus case record, and Tesla hit a new all-time high.
Stocks were lower to start Friday with the Dow dropping 170 points, or 0.6%. The S&P 500 fell 0.4%, while the Nasdaq slid 0.1%.
Pfizer and BioNTech will apply for emergency use authorization from the FDA for their COVID-19 vaccine today. If the application is approved, the vaccine will likely be limited and rolled out in phases with health care workers, the elderly, and people with underlying conditions likely receiving the first doses likely sometime next month. Essential workers, teachers, and people in homeless shelters and prisons would likely be next, followed by children and young adults. The FDA is expected to take a few weeks to review the application, and an advisory committee meeting to review the vaccine has already been tentatively scheduled for early December. “Filing in the U.S. represents a critical milestone in our journey to deliver a COVID-19 vaccine to the world and we now have a more complete picture of both the efficacy and safety profile of our vaccine, giving us confidence in its potential,” said Pfizer CEO Dr. Albert Bourla in a statement.
The Treasury Department released a letter to Federal Reserve Chair Jerome Powell demanding the return of money the government provides the central bank so it can lend to certain markets in times of stress, spurring a disagreement from the Fed which issued a statement just minutes later urging that “the full suite” of measures be maintained into 2021. “This is a significant and disturbing breach at a critical time for the economy,” said Tony Fratto, a former Treasury and White House worker during the George W. Bush administration. “We need all the arms of government working together and instead we’re seeing a complete breakdown.” Outgoing Treasury Secretary Steven Mnuchin sought to reassure markets this morning, telling CNBC, “Markets should be very comfortable that we have plenty of capacity left,” adding that he is “merely, simply following the intent of the law. It was not a decision on whether we needed these or didn’t need these.” Chicago Federal Reserve President Charles Evans called the decision “disappointing,” while High Frequency Economics chief economist Carl Weinberg compared it to stripping the Titanic of its lifeboats. “One of the problems was that there weren’t enough lifeboats onboard, and then none of those lifeboats were being used when the boat left the dock, but when you needed them, they weren’t there,” Weinberg said. “These are the lifeboats for the economy, these are the places for companies to go when there is no place else to go, whether they are small business or medium-sized businesses, not the big ones that can go to the capital markets, but the little ones.”
In other coronavirus news, the U.S. reported a record 185,424 new cases on Thursday and its highest death count since May 7. The CDC now forecasts the nation’s COVID-19 death toll to reach between 276,000 and 298,000 by December 12. “The number of deaths that we’re going to see in three weeks’ time or four weeks’ time reflects the actions that we all take right now,” said Dr. Leana Wen, an emergency physician and the former Baltimore health commissioner. “I understand that people are worried, they’re stressed, they haven’t seen their loved ones, they want to see their loved ones now more than ever. But we really cannot do that in person, indoors, safely this Thanksgiving.” As cases continue to soar and public health restrictions rise, former FDA commissioner Dr. Scott Gottlieb said schools should be the “last thing” shut down as governors and local officials around the U.S. weigh additional restrictions to stem the spread of the virus. “We should be trying to curtail whatever activities we know are sources of community spread long before we close schools,” Gottlieb said. “So, some of these jurisdictions, including New York City, have it backwards where they close the schools and leave other things open where the spread is occurring.”
Georgia’s hand recount of votes affirmed President-elect Joe Biden’s narrow victory of the state over President Donald Trump, pushing Biden’s electoral college vote count to 306 and dealing another setback to Trump’s efforts to overturn the election results. The Georgia secretary of state’s office said Biden had an advantage of 12,284 votes. “Georgia’s historic first statewide audit reaffirmed that the state’s new secure paper ballot voting system accurately counted and reported results,” said Georgia Secretary of State Brad Raffensperger. “This is a credit to the hard work of our county and local elections officials who moved quickly to undertake and complete such a momentous task in a short period of time.” Republican Senator Mitt Romney denounced Trump over his continuing campaign to reverse his defeat to Biden in the election on Thursday. “Having failed to make even a plausible case of widespread fraud or conspiracy before any court of law, the president has now resorted to overt pressure on state and local officials to subvert the will of the people and overturn the election,” Romney said in a statement. “It is difficult to imagine a worse, more undemocratic action by a sitting president.”
And Tesla shares rose to a new all-time high of $508.61 yesterday. The stock has been on a tear this week since the S&P Dow Jones Indices announced Tesla would be added to the benchmark index prior to trading on Monday, December 21. Goldman Sachs said in a note out this morning that Tesla’s addition to the S&P 500 could unlock $8 billion of demand from active U.S. large-cap mutual funds. “Of the 189 large-cap core funds in our universe, 157 funds that manage around $500 billion in assets under management did not hold Tesla on September 30,” the Goldman analysts wrote. Assuming those funds choose to hold the electric carmaker at benchmark weight, they would need to buy $8 billion of the stock, or about 2% of Tesla’s market value.
Stocks We’re Watching
Jushi Holdings Inc (OTC: JUSHF): Jushi shares got a boost this morning after the cannabis operator announced it has purchased an additional 17.235% of the issued and outstanding equity of Dalitso LLC, a Virginia-based pharmaceutical processor, bringing its total ownership of the company to 79%. Jim Cacioppo, Chief Executive Officer, Chairman and Founder of Jushi said: “The Dalitso seed-to-sale facility will seamlessly integrate our cultivation, manufacturing, processing, and retail capabilities in Virginia. Between the expansion of our ownership stake in Dalitso and the enactment of new legislation earlier this year, we will be in a strong early mover position to drive value for our shareowners while serving patients in the most densely populated part of the Commonwealth.”