U.S. equities rallied on Friday between a report that says a Gilead Sciences drug has again appeared to be an effective coronavirus treatment and the White House’s move to start to relax business closure recommendations. Though Gilead cautioned that anecdotal reports don’t prove efficacy, hopes that we may soon have a reliable therapy ushered traders into equities on the week’s final day of trading. President Trump also issued a process for the economy to reopen. Here’s what’s happening:
2:23 pm: Guggenheim’s Minerd: S&P 500 could sink to 1,200
Scott Minerd, Guggenheim’s chief investment officer, said that the S&P 500 could fall 57% to 1,200, according to a Bloomberg report. Minerd said that unemployment could spike as high as 17%, and that shutdowns could continue for the next two years, the report said. On Friday the S&P 500 traded around 2,842, about 30% above its March 23 low. – Stevens
2:07 pm: Recovery forecast ‘weakest ‘V’ I’ve ever seen,’ Morgan Stanley economist says
Morgan Stanley chief U.S. economist Ellen Zentner said on CNBC’s “The Exchange” that lingering economic effects from the virus will prevent a sharp snapback.
“When you mark down forecasts from economists on paper, it looks like a ‘V.’ There’s no getting around it,” Zentner said. “But it’s got to be the weakest ‘V’ I’ve ever seen, and it doesn’t at all properly convey just how dampened growth will be on the other side of this.”
She said that cautious household spending in the face of an uncertain economic environment, as well as restaurants and businesses reopening in limited capacity will hamper the economy’s effort to bounce back. Zentner did say that the economy could start to improve soon, however.
“We are moving through the worst of it now, and households are seeing a light at the end of the tunnel,” Zentner said. — Pound
12:55 pm: Stocks making the biggest moves midday: Boeing, Gilead, Apple & more
Check out the companies making headlines in midday trading on Friday:
Boeing — Shares of the aerospace company jumped more than 12% after Boeing said it would resume commercial aircraft production at its Seattle-area plant as early as Monday, with social distancing policies in place. Shares of the plane manufacturer have shed 54% this year.
Apple — The iPhone maker slid more than 2% after Goldman Sachs downgraded the stock to a sell rating. The firm cut its forecast for Apple for the third time since February, saying it’s “now modeling a deeper reduction in unit demand through mid-2020 and then a shallower recovery into early 2021.” Goldman also cut its price target from $250 to $233, which is roughly 16% below where the stock currently trades.
Read about the rest of the companies making headlines here. —Franck
12:10 pm: Charlie Munger says companies are not calling Berkshire for rescue investments
Charlie Munger, vice chairman at Berkshire Hathaway and Warren Buffett’s longtime business partner, said the conglomerate’s phone has not been ringing with corporate executives begging for rescue capital as the coronavirus outbreak has left everyone in shock and confused about what their next step will be. “Everybody’s just frozen,” Munger told The Wall Street Journal. “Take the airlines. They don’t know what the hell’s doing.” —Imbert
12:00 pm: Markets at midday: Stocks jump to end the week on hope of coronavirus treatment
Around midday, the major averages were up sharply as a report on a Gilead drug raised hope for a potential coronavirus treatment. The Dow traded about 400 points higher, or 1.7%. The S&P 500 gained 1.5% while the Nasdaq advanced 0.6%. Friday’s gains put the S&P 500 on pace for its first back-to-back weekly increase since February. —Imbert
11:45 am: Hospitalizations continue to decline in New York
The total number of patients hospitalized with coronavirus in New York declined again on Thursday, Gov. Andrew Cuomo said, the fourth straight day of net declines. The number of new patients entering hospitals has stayed flat at around 2,000 per day Cuomo said. New York suffered 630 deaths on Thursday, similar to the number of deaths in the prior days. — Pound
11:20 am: Drug stocks hitting new highs
Several pharmaceutical and medical stocks hit new 52-week intraday highs on Friday morning. Incyte rose to its highest levels since January 2018, and Regeneron hit its highest mark since December 2015. Abbott Labs, Centene, Eli Lilly and Vertex Pharma set new all-time highs. — Francolla, Pound
11:05 am: Stocks fade in late morning trading
The stock market gave up some of its early gains as losses in major tech stocks Apple and Amazon weighed on market averages. The Dow Jones Industrial Average was up 400 points, or 1.7%, after trading up by as much as 600 points earlier in the session. Tech and entertainment stocks that have been beneficiaries of people staying home, including Amazon, Netflix and Activision-Blizzard, have fallen amid rising optimism that medical breakthroughs could allow the economy to reopen. — Pound
10:55 am: Wall Street raises expectations for Netflix ahead of earnings in Friday’s analyst calls
- Goldman Sachs downgraded Apple to sell from neutral.
- BMO raised its price target on Netflix to $500 from $450.
- Barclays downgraded FedEx to equal weight from overweight and UPS to underweight from equal weight.
- KeyBanc downgraded Cisco to sector weight from overweight.
- Benchmark upgraded World Wrestling to buy from hold.
- Jefferies upgraded TJX Companies to buy from hold.
- Morgan Stanley downgraded Chewy to equal weight from overweight.
- Oppenheimer downgraded Comcast to perform from outperform.
- Goldman Sachs downgraded Qualcomm to sell from neutral. — Bloom
10:50 am: Ford warns of $2 billion loss
Legacy automaker Ford Motor said in a securities filing that it expects to report a $2 billion net loss for its fiscal first quarter. CFO Tim Stone said in a release that the company has enough cash to last “at least the end of the third quarter with no incremental vehicle production and wholesales or financing actions.” Ford said earlier in the week that it expected a roughly 16% decline in revenue for the quarter. Shares of Ford were up 2.3% on Friday morning. — Wayland, Pound
10:34 am: Fed’s Bullard issues proposal he says ‘would end the crisis’
St. Louis Fed President James Bullard called Friday for subsidizing costs to companies that produce coronavirus tests. “That would end the crisis,” the central bank official said during a panel discussion. He also said the unemployment rate could rise as high as 42% – worse even the previous dismal scenario the St. Louis Fed economists have projected – but he also said he sees a strong recovery on the other side. – Cox
10:17 am: There’s a ‘global sense of urgency’ in biotech, trader Jeff Kilburg says
Jeff Kilburg, CEO of KKM Financial, said Friday there is a “global sense of urgency” in the biotechnology sector that can lift that group in the near future. “Back in late March, when you saw a lot of turmoil, we actually bought IBB,” said Kilburg on CNBC’s “Worldwide Exchange,” referring to the iShares Nasdaq Biotechnology ETF. “Some of these names which maybe fell out of favor going into an election year … are all the sudden back in favor,” Kilburg added. “You’re seeing Gilead this morning with a really nice pop, but a high tide lifts all boats.” —Imbert
10:05 am: Gap, other retailers surge in early trading
Shares of Gap jumped more than 9% in early trading to lead big retail stocks higher amid optimism about the U.S. economy possibly reopening sooner than expected. Gap’s stock is still down more than 50% for the year. Macy’s, Nordstrom and Kohl’s also rose more than the broader market on Friday. — Pound
10:03 am: Dow headed for best close in more than a month
The Dow’s early gain of more than 500 points puts the 30-stock average above 24,000. If the Dow holds these gains, it would mark its first close above 24,000 since March 10, when it closed at 25,018. — Imbert
9:53 am: Mall owner Simon Property Group rallies 12%
Shares of Simon Property Group led the S&P 500 higher, gaining more than 12% on Friday. The largest mall owner in the U.S. has been beaten down due to the coronavirus shutdown as retail struggles. The REIT’s stock is down more than 64% this year. However, hopes of a coronavirus treatment and a reopening of the economy is boosting shares. — Fitzgerald
9:49 am: Boeing jumps on plan to restart Seattle-area production
Boeing shares were up more than 8% after the aerospace giant said aircraft production would resume at its Seattle-area facility as early as Monday. The company had suspended production three weeks ago amid stay-at-home orders in Washington state. Friday’s jump put Boeing on pace for its best day since April 6. — Imbert, Josephs
9:35 am: Dow jumps 500 points, S&P 500 adds 1.8% after opening bell
The Dow jumped 600 points immediately after the opening bell only to pare back its gain to around 500 points a few minutes later. The S&P 500 rose 1.8% to around 2,850 and came within one point of touching its 50-day moving average in its rally just after the start of regular trading. Boeing led the Dow higher with a 9.7% pop; Home Depot claimed the No. 2 spot and added more than 50 points. — Franck
9:20 am: New York Fed’s Williams says the economy won’t be back to ‘full strength’ by end of 2020
New York Federal Reserve President John Williams warned on Friday that the U.S. economy is unlikely to fully recover by the end of 2020. The New York Fed chief said industries like construction should be the first to come back. “I expect that to be able to bounce back a little bit more quickly than maybe some of the other sectors,” Williams told CNBC’s Steve Liesman. “But I don’t see the economy getting back to full strength by the end of the year.” — Cox, Franck
9:15 am: Dow futures show 600-point gain, S&P 500 set for 2.2% jump with 20 minutes to open
Dow industrials futures pointed to a 600-point gain with 15 minutes left before the opening bell. S&P 500 futures suggested a 2.2% jump as equities moved off their premarket highs after New York Federal Reserve President John Williams warned that economic growth in the U.S. is unlikely to return to normal through 2020. — Franck
8:42 am: Moderna shares surge after receiving $483 million in federal funding for vaccine
Moderna jumped nearly 20% in the premarket after the biotechnology company received $483 million in federal funding aimed at a coronavirus vaccine development. CEO Stephane Bancel told CNBC’s “Squawk Box” the funding is particularly critical in aiding manufacturing efforts. “Instead of waiting for the data and then scaling up with manufacturing process … we can make as many doses as we can. We are doing both in parallel,” he said. —Imbert, Stankiewicz
8:12 am: Trump lays out three-stage reopening of the country
President Donald Trump has issued a three-stage process for the economy to reopen slowly as the coronavirus recovery process begins. In an 18-page plan titled “Opening Up America Again,” the White House sees some states coming online before others. The first phase sees some companies open while vulnerable individuals continue to shelter in place and social distancing continues. The second envisions further loosening so long as there’s no evidence of a rebound in Covid-19 cases. Finally, the plan still calls for precautions for vulnerable individuals but a more aggressive return to normal for most aspects of the economy. — Cox
7:55 am: Dow futures point to 700-point gain, S&P 500 set for 2.5% jump at open
Futures contracts tied to the major U.S. stock indexes pointed to strong gains at the opening bell as investor optimism over the prospects of a Gilead Sciences drug treatment for the novel coronavirus ushered traders into equities. The Dow Jones Industrial Average was poised to soar some 740 points while S&P 500 futures suggested a pop of about 2.8%. — Franck
7:50 am: Remdesivir could give economy ‘fighting chance,’ Cramer says
CNBC’s Jim Cramer said on Twitter last night that Gilead Sciences drug remdisivir being effective in treating coronavirus would give the economy a “fighting chance.” “Every large S&P name is screaming but also the banks that are so hated…,” Cramer said in another tweet. “I think that remdesivir would cut the morbidity .. which would change how quickly we can open… and what we can do.” Cramer said in late March that investors who were betting the stock market would continue to fall long-term were “betting against science.” — Pound
7:47 am: Gilead rockets 12% in premarket trading on virus treatment hopes
Gilead Sciences soared more than 12% in the premarket session Friday after a report said that its drug remdesivir proved effective in treating the coronavirus. STAT news reported Thursday evening that a Chicago doctor treating those with the virus with the drug in a trial said her patients were recovering rapidly from severe symptoms. Though Gilead cautioned in a statement to Reuters that such anecdotal reports do not prove remdesivir’s efficacy, the company said more rigorous trials should show more certain results by the end of April. — Franck
7:40 am: China GDP slides as coronavirus hammers economic activity
China’s GDP contracted by 6.8% in the first quarter as coronavirus containment measures exacted a sharp economic hit. The decline was even worse than the 6.5% expectation, though economists generally cast doubt on China’s official figures. Industrial production fell 1.1%, which was better than estimates of 7.3%, while retail sales plunged 15.8% against a 10% forecast. Unemployment for the quarter stood at 5.9%, down from 6.2% amid efforts to gradually restart daily activities. However, continued weakness in demand shows that “even after the lockdowns have been lifted, people are cautious to consume,” Bo Zhuang, chief China economist at TS Lombard, told CNBC. — Cox
7:37 am: Procter & Gamble sees a 10% boost to US sales during COVID-19 shutdown
Shares of the consumer staples giant rose nearly 2% in premarket trading on Friday after reporting a 10% surge in U.S. sales in its quarterly earnings. Procter & Gamble said American sales got a boost from consumers stocking up on staples like toilet paper ahead of the coronavirus outbreak. The company earned $1.17 per share adjusted, compared to the Refinitiv estimate of $1.13 per share. However, the Vicks owner cut its revenue forecast for fiscal 2020, citing headwinds from foreign currency. — Fitzgerald
7:35 am: Boeing to resume production, stock jumps 9%
Shares of Boeing jumped more than 9% in Friday’s premarket trading after the company said it plans to resume commercial aircraft production at its Seattle-area plant as early as Monday. The company is implementing new physical distancing measures to avoid the spread of Covid-19. About 27,000 employees will be returning to work, equal to around 17% of the company’s workforce. The stock is down 58% this year. — Stevens, Josephs
7:28 am: Goldman Sachs downgrades Apple to sell, says stock will drop 20%
Goldman Sachs on Friday downgraded shares of Apple to sell from neutral and said it sees slowing iPhone demand as users hang on to phones longer. “We are now modeling a deeper reduction in unit demand through mid 2020 and then a shallower recovery into early 2021. We also assume some lingering [average selling price] weakness as consumers look to economize similar to what we have seen in prior downturns,” Goldman analyst Rod Hall told clients. The firm said consumer demand may not return till late 2021 and that it would feel more bullish with evidence it would return sooner. Goldman lowered its price target on the stock to $233 from $250, representing a near 20% drop from Thursday’s closing price of $286.69 a share. — Fitzgerald
— CNBC’s Jeff Cox, Fred Imbert, Leslie Josephs, Kevin Stankiewicz and Jesse Pound contributed reporting.
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