D&D Note (10.27.2020) ~ Rising Average Daily Virus Cases & Hospitalizations Continues To Weigh Down Markets ~
The reality is Covid-19 has not gone away and in fact is right now at the worse point in the Pandemic in both Europe and the USA.
In the U.S. we are seeing an alarming rate of new cases, which is leading to an increase in hospitalizations, which then leads to more deaths (deaths tend to lag spike in cases by 2 weeks).
Logistics of how to disperse a potential vaccine are also weighing down hopes for a quick “cure.”
States in the U.S. will need more than $8 billion from Congress to be able to distribute a vaccine. The government has invested $10 billion into producing a vaccine but so far is unwilling to invest in the actual distribution.
The EU has said there will not be enough doses of a vaccine to give the entire population before then end of 2021 and is looking at 2022 before everyone in the 27 country bloc can be vaccinated.
A new study from the U.K. shows that Covid antibodies fall as people who had been infected recover from the virus. This dents hopes of “herd immunity” as essentially people lose immunity after recovering. The study suggests there was decline in immune population in the months following the first wave.
The company 3M is now making even more N95 masks than ever before as global Covid-19 cases continue to rise. The company is on track to produce 2 billion N95 masks of which half will be in the U.S.
YouTube will be adding a warning label on Election Day stating ‘Results may not be final.’
More than 67 million Americans have already voted in the 2020 Presidential election with Texas and Florida seeing record high voter turnout. There were 136 million total ballots cast in 2016.
The youth vote is what most are watching as they tend to vote in person and polls are showing that the youth vote this year could match the levels seen in 2008 that propelled Obama into office.
A national poll of ages 18 to 29 shows Joe Biden leading 63% to Trump 25%.
Chipmaker AMD said today it is buying rival Xilinx for $35 billion all-stock deal. Xilinx gained while AMD fell.
Microsoft reported earnings after the bell, share gained 1.95% leading into the earnings call. 1Q REV. $37.2B, EST. $35.75B. 1Q EPS $1.82 VS. $1.38 Y/Y, EST. $1.55. 1Q intelligent cloud REV. $12.99B, +20% Y/Y, EST. $12.78B. Shares fluctuated between modest gains & losses in after hours after the initial release of an overall beat. Shares look to be settling up leading into the actual earnings call.
In todays cash trading session the DOW was kept in the red throughout the day. The S&P 500 wavered between gains and losses. The NASDAQ trended in the green throughout the session.
The biggest laggards on the DOW today were Caterpillar and Boeing.
DOW down -0.80%
S&P 500 down -0.30% (3390.68)
NASDAQ up 0.64%
VIX up 2.74% to 33.35
Oil up 2.26% to $39.43 a barrel.
Gold up 0.23% to $1910.10 an ounce.
Hospitalizations due to Covid-19 is rising in 36 U.S. states by at least 5%.
The past seven day average for cases has now climbed to 69,967 in the U.S.
Health officials in the U.S. have said the increase in cases is not due to more testing as the actual percent of tests that are positive has increased with the more testing. 6.3% of tests were positive on 7day average up from 5.3% a week earlier.
Global Virus cases: 43.8 million+
Global Virus deaths: 1.16 million+
U.S. Virus cases: 8.75 million+
U.S. Virus deaths: 226,383+
~ Dave James / Principal Trader and Market Strategist