Monday July 13th


Dow futures rise more than 200 points as Pfizer, BioNTech vaccines get ‘fast track’ status

U.S. stock index futures extended their gains after Pfizer and German biotech BioNTech SE were granted fast track designation by the FDA for two of the companies’ four vaccine candidates against the coronavirus. Pfizer shares added 2%. BioNTech jumped 5%. The news helped investors look past a record spike in coronavirus cases in Florida. Tech shares  also rose in the premarket. Futures on the Dow Jones Industrial Average gained 223 points, or 0.8%. The move implied an increase of 244 points at Monday’s open. S&P 500 futures added 0.7%. Nasdaq-100 futures contracts rose 0.9%. Florida reported 15,299 new coronavirus cases on Sunday, the highest single day total for any U.S. state since the pandemic began. Meanwhile, the U.S. has reported more than 60,000 new cases daily for three days in a row now, bringing the national total to more than 3 million cases, according to data from Johns Hopkins University. Pfizer and BioNTech said they expect to start the next phase of the vaccine trial later this month with 30,000 subjects. The companies expect to have 100 million doses of a vaccine by the end of 2020 and more than 1.2 billion doses by the end of 2021, according to a release. Here are the other things traders were watching Monday morning: Key technology shares climbed in premarket, continuing their mystifying run as investors bet on their resilience during the coronavirus. Apple, Amazon and Netflix were higher in premarket trading. Tesla jumped 5%. Chip stocks increased after Analog Devices offered to buy Maxim Integrated in a $21 billion all-stock deal. Maxim jumped 17% in premarket trading. Stocks which will benefit from a successful reopening of the economy gained despite the case increase. United Airlines added 2% in the premarket. Carnival Corp. added 1%. Disney, which opened its Orlando theme park over the weekend, gained 1.4%. Disney also got a boost after Goldman Sachs initiated coverage of the stock with a buy rating a $137 per share price target. Meanwhile, analysts at Wedbush and Morgan Stanley raised their price targets on Apple, sending the stock up 1.2%. The Dow and the S&P 500 are coming off two consecutive weeks of gains, while the resilience in tech shares pushed the Nasdaq to a new record after three straight positive weeks. For July, the Dow and the S&P 500 have risen 1.0% and 2.7%, respectively. The tech-heavy Nasdaq outperformed, climbing 10.7% this month as Amazon, Apple, Netflix, Alphabet all reclaimed new highs. “The overall rally is still very narrow...and several of the high flying mega-cap stocks are becoming overbought (and more over-valued),” Matthew Maley, chief market strategist at Miller Tabak, said in a note on Sunday. “Therefore, we HAVE to wait to see if the key resistance level on the S&P is indeed broken to the upside before we can confirm that another rally leg in the broad stock market has begun.” Earnings season is set to kick off this week with big banks and others reporting their quarterly results. JPMorgan, Citigroup and Wells Fargo are scheduled to report on Tuesday. Pepsi will report earnings on Monday before the market open. Corporate profits are expected to fall by 44% in the second quarter, which would be the biggest drop in quarterly earnings since the fourth quarter of 2008, according to Refinitiv data. However, the market could shrug off the sharp profit decline as long as companies signal a recovery on the horizon. JPMorgan shares gained about 1% in premarket trading. After the S&P 500′s best quarter in more than 20 years, the broad market’s comeback rally has slowed down amid fears of a worsening pandemic. Still, the equity benchmark is now down just 1.4% year to date, sitting about 6% off its February record. Stocks in Asia jumped on Monday as investors shrugged off concerns over the rising number of coronavirus cases stateside. Mainland Chinese stocks were among the biggest gainers regionally on the day, as the Shenzhen component soared 3.496% to about 14,149.14 while the Shanghai composite was up 1.77% to around 3,443.29. Elsewhere, the Nikkei 225 in Japan rose 2.22% to close at 22,784.74. The Topix index also advanced 2.46% to finish its trading day at 1,573.02. South Korea’s Kospi gained 1.67% to close at 2,186.06. Hong Kong’s Hang Seng index rose 0.57%, as of its final hour of trading. Oil slipped in early Asian trade on Monday as traders eyed an OPEC technical meeting this week which is expected to recommend an easing in supply cuts that have been propping up crude prices. Brent crude fell 27 cents to $42.97 a barrel by 0114 GMT while U.S. West Texas Intermediate crude was at $40.27 a barrel, down 28 cents. Gold prices rose on Monday, holding ground above the key $1,800/oz level, as a weaker dollar and worries over surging COVID-19 cases around the globe kept the safe-haven metal underpinned. Spot gold was up 0.3% at $1,803.80 per ounce by 0303 GMT. U.S. gold futures rose 0.4% to $1,809.10.