Hope for a vaccine on Wall Street injects a good dose of optimism

Wall Street set to jump on stimulus, vaccine hopes
May 18, 2020
Oil Extends Rally as US Inventories Fall — Market Talk
May 20, 2020

Hope for a vaccine on Wall Street injects a good dose of optimism

(New York) The New York Stock Exchange closed sharply higher on Monday, buoyed by encouraging preliminary results from clinical trials of a coronavirus vaccine and generally positive sentiment about the economic outlook.

Posted on May 18, 2020, 9:41 a.m.

Updated at 4:57 p.m.

Its flagship index, the Dow Jones Industrial Average, climbed 3.87% to 24,597.37 points. It was its largest percentage increase in one session since early April.

The highly technological NASDAQ appreciated by 2.44% to 9,234.83 points.

The S&P 500, which represents the 500 largest companies on Wall Street, took 3.15% to 2953.91 points.

The US-funded Moderna laboratory, Moderna, said on Monday “positive interim data” from the initial phase of clinical trials for its mRNA-1273 vaccine project.

The latter appeared to elicit an immune response in eight people who had been given it, on the same scale as that seen in those who were naturally infected with the virus, according to a statement from the laboratory.

The full results of this phase 1 trial are not yet known, however, and large-scale trials are planned for July.

President Donald Trump was quick to applaud the “staggering” results and praised their positive impact on the financial markets.

On Wall Street, Moderna’s share soared nearly 20%.

After Wall Street closed, the company also announced the issuance of new shares for $ 1.25 billion. Subscribers will also have the option of purchasing $ 187.5 million in additional shares for 30 days.


Cautiously optimistic Powell

On the economic front, the head of the Federal Reserve, Jerome Powell, continued to be cautious while envisaging a return to growth in the United States in the medium term or the long term.

In an interview broadcast on CBS on Sunday, Powell said the current crisis had “fundamental differences” from the Great Depression, noting that, unlike 1929, all indicators were green for the US economy before the pandemic.

The Fed chairman nevertheless ruled that the unemployment rate could reach 20% to 25% in the United States and that the GDP could drop to 30% in the second quarter.

“The news of a possible vaccine is behind” the sharp rise in the stock market on Monday, said Peter Cardillo of Spartan Capital Securities, “but Powell also deserves credit for his moderately optimistic outlook.”

More and more companies have planned to gradually reopen their business in North America this week. This was the case on Monday of the automobile factories, in particular General Motors (+9.81%), Ford (+1.87%), Fiat Chrysler USA (+8.31%) and Tesla (+1.87%).

Among the other values ​​of the day, several oil majors took advantage of the new jump in oil prices: Chevron rose 5.33%, ExxonMobil by 7.95% and Occidental by 9.04%.

Several industries strongly dependent on a full revival of the American economy also posted strong growth, such as the airlines Delta Air Lines (+ 13.91%), American Airlines (+ 9.18%) and United Airlines (+ 21.13%).

Disney for its part took 7.15%. The group will reopen the mall at its massive Orlando, Florida complex on Wednesday, setting strict health standards. The amusement park and hotels remain closed for the time being.

The specialist in car reservations with driver Uber took 3.54% after announcing Monday to lay off 3000 additional workers, after 3700 job cuts already decided in early May.

On the bond market, the 10-year rate on the US debt rose, moving to 0.7208% against 0.6428% on Friday evening.