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2020-05-26 Economy
Dow futures jump 500 points as investors bet on the economy reopening and a vaccine breakthrough
[CNBC] Stock futures traded sharply higher early Tuesday to begin a holiday-shortened week, as optimism grew about the reopening of the economy and a potential coronavirus vaccine.

Futures on the Dow Jones Industrial Average pointed to an implied opening gain of about 516 points. Dow futures added 513 points or 2.1%. S&P 500 futures gained 1.9%. Nasdaq-100 futures also rose 1.9%. U.S. markets were closed Monday in observance of Memorial Day.

Here’s what the markets were watching:

  • American biotech company Novavax said Monday it started the first human study of its experimental coronavirus vaccine. The company said it expects initial results on safety and immune responses in July. Last week, another biotech Moderna reported positive development on its vaccine trial where all 45 participants had developed coronavirus antibodies. There are 10 vaccines in clinical evaluation and 114 in pre-clinical evaluation, according to a running tally by Fundstrat.

  • Economic activity continued to pick up as states begin opening up their economies. The biggest gainers in the premarket were directly tied to the reopening. Carnival shares jumped 11%. MGM Resorts climbed 9%. United Airlines and Southwest Airlines rose 7% each.

  • The S&P 500 was set to meet or exceed its 200-day moving average after the open Monday. The benchmark needs to gain 1.8% to reach the milestone. Many technical analysts look at that moving average as a sign of the long-term trend. Rising above it could signal a change in long-term trend from bearish to bullish.
    • "Next month we will know Bank stress test results; whether oil prices are a bounce or something more sustained; and if we have moved out of COVID season or into a second wave," Christopher Harvey, Wells Fargo’s head of equity strategy, said in a note. "If things break positively, we would expect to see a healthy rotation toward cyclicals, smaller caps, and value stocks."

    The moves in stock futures followed a solid week for Wall Street that saw the 30-stock Dow rise 3.3%, posting its best weekly performance since April. The S&P 500 and Nasdaq also climbed more than 3% last week.

    The number of coronavirus cases in the U.S. topped more than 1.6 million as deaths rose to more than 97,000, a tally from Johns Hopkins University showed as of Monday.

    Meanwhile, investors kept an eye on the U.S.-China tensions, which showed signs of escalation over the weekend. White House National Security Advisor Robert O’Brien said Sunday the U.S. will likely impose sanctions on China if Beijing implements national security law that would give it greater control over autonomous Hong Kong.
    Posted by Besoeker 2020-05-26 07:39|| || Front Page|| [6 views ]  Top

    #1 Bet on the economy. F*ck the vaccine.
    Posted by M. Murcek 2020-05-26 07:55||   2020-05-26 07:55|| Front Page Top

    #2 'pump-n-dump' is how they make their money.
    There won't be a vaccine (soon), and business won't be able to reopen because they can't recall their help fast enough.

    Suggest values fall @Wed/Thurs.
    Posted by Skidmark 2020-05-26 09:39||   2020-05-26 09:39|| Front Page Top

    #3 The stupidly large injection of unnecessary money to the usual suspects will keep the stock market over pumped. It will all be about getting out at the right time. As always.
    Posted by M. Murcek 2020-05-26 10:14||   2020-05-26 10:14|| Front Page Top

    #4 It's a stock-picker's market. Aside from buying Skid's favorite hooch-maker, there are plenty of good picks out there. Southwest is a top pick.

    If a company is priced as if it's going bankrupt but in fact has plenty of cash in the bank and zero risk of going bankrupt, then its stock is a Buy.

    For example, Buffett may be right about the airlines with weak balance sheets, mediocre management and lots of international exposure, but none of that applies to Southwest. That well-managed and lean airline doesn't need to completely fill its planes with passengers in order to keep going. Last I checked they have s.t. like $12 billion in cash reserves (including a recent infusion of $3B from Uncle Mnuchin) -- so even at 50-60% passenger capacity they could keep on burning $20m per day and stay afloat for years. In the meantime they can offset the lost passenger revenue with new cargo revenues.
    Posted by Lex 2020-05-26 11:22||   2020-05-26 11:22|| Front Page Top

    #5 And now Obama's top economic adviser is agreeing with Kudlow and Hassett that the economy will rebound rapidly.

    Democratic economist Jason Furman points to data indicating that this recovery will be similar to what we see after a hurricane or other natural disaster. Echoing Kudlow, Furman says that in Q3 "We are about to see the best economic data we’ve seen in the history of this country."
    Posted by Lex 2020-05-26 13:21||   2020-05-26 13:21|| Front Page Top

    #6 Jason Furman:

    "You could easily have 1 to 2 million jobs created a month in the four [jobs and unemployment] reports before November,” he said.

    “And then toward the end of October, we will get GDP growth for the third quarter, at an annualized rate, and it could be double-digit positive economic growth. So these will be the best jobs and growth numbers ever.”
    Posted by Lex 2020-05-26 13:52||   2020-05-26 13:52|| Front Page Top

    #7 I would expect the never-Trump brigade of Socialist and Rino econofreaks to try and talk up expectations so Trump's recovery can't possibly make them. Then they blame him for the failure to meet "their" ridiculous predictions.
    Posted by AlanC 2020-05-26 13:55||   2020-05-26 13:55|| Front Page Top

    #8 Economic panics are always artificial in every way except for the people tossed out of work. This one will snap back with a vengeance.
    Posted by M. Murcek 2020-05-26 16:39||   2020-05-26 16:39|| Front Page Top

    #9 The only scary thing is that the people who would like to collapse the economy on a whim now know it will take more than a mask panic to do it.
    Posted by M. Murcek 2020-05-26 16:40||   2020-05-26 16:40|| Front Page Top

    		20:45 Dale
    20:25 Dale
    19:01 One Eyed Protector of the Texans6023
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    17:15 M. Murcek
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    16:38 trailing wife
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    15:16 Penguin_of_the_Sanhedrin
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