The stock market looks set to soar Monday morning because good news comes in threes.
For starters, an article in a Chinese government-run publication called for a “healthy bull market.” That’s akin to the Federal Reserve saying stocks look too cheap, and the
responded accordingly: It’s up 5.7%.
bought natural gas pipeline and storage assets from
his first big deal following the bear market. Whatever Warren does is noteworthy—remember when he invested in the big banks during the financial crisis?—and a big deal could be taken as a signal that the stock market’s rally is real.
Finally—and most important—deaths due to Covid-19 are falling despite a surge in the number of cases. Fewer than 500 people have died each day over the past week, down from a comparable peak of more than 2,000 deaths in mid-April.
When investors get a trifecta of good news it shows.
Dow Jones Industrial Average
futures were up 350 points, or 1.4%.
The Fight over Monuments Escalates
Protesters in Baltimore pulled down a statue of Christopher Columbus and dumped it into the city’s Inner Harbor over the holiday weekend as President Donald Trump issued an executive order for a “National Garden of American Heroes,” featuring statues of everyone from Frederick Douglass to Ronald Reagan.
- President Trump has seized on defending statues to help bolster his re-election bid, The Wall Street Journal reported. With national and state polls showing him falling behind former Vice President Joe Biden, who has said he supports taking down statues honoring Confederates who “committed treason,” including Jefferson Davis and Robert E. Lee.
- Biden says he wants to protect statues of Columbus and Founding Fathers like George Washington and Thomas Jefferson.
- Demonstrators have toppled statues of Confederate generals and other historical figures across the country as part of protests against police violence and racism that erupted after George Floyd’s death in May while he was being arrested by Minneapolis police.
- New York City and the American Museum of Natural History have agreed to take down the statue of Theodore Roosevelt flanked by a Black man and a Native American man. The makeup of the statue, which puts the two men at Roosevelt’s side in a subservient position, was a key reason many found it offensive.
What’s Next: Congress looks set to include language, written by Sen. Elizabeth Warren (D., Ma.), in this year’s defense spending bill that would rename military bases honoring Confederate officers. President Trump has threatened to veto the $741 billion measure over that language.
Coronavirus Science Faces Fresh Setback and a Few Glimmers of Hope
The World Health Organization has stopped trials of the antimalaria drug hydroxychloroquine and two HIV drugs to treat coronavirus, it said in a statement. None showed promise based on interim results from the trials, with “little or no reduction in the mortality of hospitalized Covid-19 patients when compared to standard of care.”
- The FDA released guidance requiring that any vaccine be at least 50% more effective than a placebo.
and its German biotech partner
will begin a larger trial of their vaccine with tens of thousands of participants sometime this month.
- A cheap, readily available steroid—dexamethasone—remains the most promising treatment for severely ill patients.
- Adding a smell test in addition to existing fever checks in workplaces, restaurants, and public gathering spaces could help pre-screen people for a possible coronavirus infection who have yet to get a nasal swab. Up to 80% of people with the virus lose their sense of smell, which can be checked with a simple scratch-and-sniff test, STAT reports.
What’s Next: Early research suggests that a variant of Covid-19 first seen in Europe is more easily transmissible, Dr. Anthony Fauci said in an interview last week. With new daily infections in the U.S. hovering around 50,000 cases, containing the evolving epidemic has and will continue to be challenging.
New Projection for Covid’s Economic Toll
expects the U.S. economy to shrink more in 2020 than previously forecast, as rising coronavirus cases will delay the country’s full reopening. The bank had forecast -4.2% GDP growth in 2020, but reduced that estimate to -4.6% growth and raised its outlook for 2021’s bounceback by 1 to 1.5 percentage points.
- Local officials in Arizona, Florida, and Texas have voiced frustrations with their states’ reopenings, saying they were done too early and too haphazardly, the Washington Post reported.
- The head of the FDA said Sunday that it’s “too soon to tell” if it will be safe for Jacksonville, Fla., to host the Republican National Convention in August. “We’ll have to see how this unfolds in Florida and around the country,” Dr. Stephen Hahn said. He also declined to back President Trump’s claim that 99% of Covid-19 infections are “totally harmless.”
“We need to accept the fact that we are in the second wave right now. Two months ago, there were about 10 states that—where the reproduction number was above 10, meaning they had expanding epidemics. Now, there’s 40.” –Former FDA Commissioner Dr. Scott Gottlieb
What’s Next: Florida and Texas recorded record numbers of new cases on Saturday, reporting more than 11,000 and 8,000, respectively. Both states reported lower figures Sunday, but that may be the effects of the holiday weekend on testing facilities.
U.K. Approves $2 Billion Arts Bailout
The British government has approved a £1.6 billion ($2 billion) fiscal package for the country’s movie theaters, concert venues and museums, after pleas from professionals that continuous social distancing measures would cripple the arts industries for years to come, and lead to thousand of job cuts.
- U.K. Chancellor of the Exchequer Rishi Sunak is due to detail Wednesday his overall fiscal plans to stimulate the nascent recovery as business strives to come out of the coronavirus-related lockdown and restrictions.
- Funding for the arts comes after hundreds of music stars led by the Rolling Stones and Paul McCartney wrote an open letter to the U.K. government last week warning of a major crisis, as concert venues remain closed and summer festivals are being canceled.
- The Institute for Fiscal Studies, an influential U.K. think tank, said Monday that 13 universities may need a bailout because of the current crisis, as a drop in the number of students and raising pension liabilities are putting them at risk of insolvency.
What’s Next: Sunak’s presentation this week is eagerly expected by investors who want to gauge what balance the U.K. finance chief will strike between the need for more stimulus to avoid a long slump, and his concerns about the country’s rising deficits and public debt.
Australia Isolates the State of Victoria After Spike in Melbourne
The Australian government said Monday it would close the border between the states of Victoria and New South Wales after a new major outbreak of coronavirus in nine Melbourne social housing buildings, whose inhabitants have been quarantined.
- This is the first time in a century that the border between the two states has been closed. It remained open in the first stage of the pandemic because of the logistics problems involved with closing 50 border crossings, along with a few border towns.
- The Australian Medical Association has called for a pause in the easing of restrictions that had started across the country.
- The number of new cases of the virus in the last day (127) was the highest recorded in the state of Victoria since the beginning of the outbreak.
What’s Next: Australian developments illustrate the risks of new outbreaks of the Covid-19 pandemic even in countries that seemed ahead of the curve in tackling the virus. It may serve as a lesson to governments world-wide when deciding on the speed and breadth of lockdown relaxing.
MarketWatch Wants to Hear From You
With the unemployment rate at record highs, will filing taxes be different this year—especially if you’ve been collecting unemployment benefits?
A MarketWatch correspondent will answer this question on Thursday. In the meantime, send any questions you would like answered to us at [email protected].
—Newsletter edited by Stacy Ozol, Anita Hamilton, Matt Bemer, Benjamin Levisohn