Daily Markets: Investors Cheer Gilead Results and Reopening Roadmap

Gilead Sciences logo
Credit: Stephen Lam - Reuters /

Today’s Big Picture

The markets today are in a giddy mood thanks to preliminary data from a Gilead Sciences (GILD) study using the antiviral treatment remdesivir on COVID-19 patients that found the drug highly effective - much needed great news. Yesterday President Trump also presented the public with a plan to open up the economy which provided guidelines but left the decisions on how and when in the hands of state governors. Investors reacted positively to both pieces of news with US equity futures pointing to solid moves up at the open. 

While we are cautiously optimistic given the above, the economic data and earnings reports for the next few weeks are likely to remind investors that the economy is unlikely to bounce back quickly, even if a miracle treatment is found. The market’s enthusiasm today will be forced to contend with those realities in the days and weeks to come.

Broadcom (AVGO) provided a stark reminder of this as it warned customers they will need to place orders for parts at least six months ahead of time given lockdowns in Malaysia, Thailand, Singapore, and the Philippines that are "closing or severely restricting business operations." In a letter to customers, Broadcom “urged clients to put in their orders at least 26 weeks ahead of delivery -- meaning anything ordered now will get shipped right around the crucial holiday season.” 

All the major equity indices in Asia closed in the green, gaining between 0.7% and 3.2% while equity markets in Europe were all solidly in the green by midday trading with the major equity indices all up well over 3%.

Data Download


The total number of confirmed cases worldwide will be over 2.2 million within a matter of hours while the number of lives lost is nearing 150,000. In the US the number of reported deaths nearly doubled the prior record yesterday with 4,591 people losing their lives to COVID-19 in the 24 hours ending 8 pm EST. Yesterday New York's governor announced that its economy "on pause" policy will be extended until May 15 at the earliest and the UK extended its national lockdown for at least three more weeks.

A new report out of Italy found that the number of deaths in the nation more than doubled since March 1, 2020, compared to the same time last year with over 70 municipalities reporting 10x the number of deaths versus last year. This, along with data from other nations, is leading many to theorize that all over the world, deaths from the virus are possibly being unintentionally, materially under-reported. More importantly, the mortality rate of the virus may also be lower than the official data implies because the actual number of cases may be much higher than the confirmed number of cases. This would mean that many more people may have been exposed to the virus which hopefully implies some level of immunity.

Northern Ireland also reported that its death toll was revised upward by one-third based on previously unreported fatalities at nursing homes and private residences. We expect to see more of this type of data adjustments going forward.

China also revised its death toll from the virus up by around 40% as US intelligence and virologists around the world question the divergence between the virus there and what has been experienced in much of the western world. The discrepancy was officially stated to have been due to mistakes during hospital overload and missing those victims who had died at home or non-hospital care facilities.

Some good news came out of Germany today when Lothar Wieler, head of the Robert Koch Institute, reported that the virus’ reproduction number R0 in Germany has dropped from 1 at the end of March to 0.7 today. This means that every person infected is infected less than one other person, a critical step for opening up a nation’s economy.

International Economy

Industrial production in Japan fell 5.7% YoY in February, marking the fifth consecutive decline. On a month over month basis, February industrial production fell 0.3%, missing expectations for +0.4%. Notable declines were had in the production of transport equipment, electrical machinery, and food & tobacco.

Construction output contracted 0.9% YoY in the Eurozone during February with declines in building activity that were mitigated by civil engineering activity. 

China’s economy contracted 6.8% in the first quarter of 2020, the first contraction since the nation began reporting quarterly data in 1992. Industrial Production contracted 1.1% YoY in march after having fallen 13.5% in January and again in February, better than the expected 7.3% decline. Industrial Capacity Utilization rate fell to a record low of 67.3% in the first quarter of 2020 from the previous 77.5%.  Retail sales fell by 15.8% YoY in March after the 20.5% decline in both January and February, a steeper decline than the expected 10% for the month. 

Domestic Economy

Yesterday Bloomberg's weekly reading on consumer comfort fell another 5.4 points, the second-largest weekly decline on record after last weeks record 6.4 point drop, to rest at 44.5, the lowest level since October 2016. The 18.5 point decline over the past 4 weeks is more than double the prior 4-week record with data going back to 1990.

So far housing is holding up better than other parts of the economy in March, but Starts fell 22.3% and Permits fell 7% per Census data reported yesterday.

In terms of the US, the lone economic report to be released today will be the March Leading Indicators report, which will be followed this afternoon by the weekly Baker Hughes Oil Rig Count.


Yesterday the markets fluctuated between gains and losses, managing to close slightly in the green after a late-day rally. Bespoke Investment Group pointed out yesterday that the S&P 500 has never declined on a day when jobless claims were a million or more. Talk about a fascinating market. The Dow closed up 0.1%, the S&P 500 gained 0.6% while the Nasdaq Composite rose 1.7% with healthcare and technology stocks leading the market.

US crude prices hit another 18-year low, dropping to $18 a barrel this morning.

Stocks to Watch

In response to President Trump's staged plans to re-open the US economy, several beaten-down industries and companies look to trade higher when US equity markets open. They include:

  • Restaurants, which among others include McDonald’s (MCD)Starbucks (SBUX)Chipotle Mexican Grill (CMG)Cheesecake Factory (CAKE), and Chuy’s Holdings (CHUY);
  • Carnival Cruise Lines (CCL)Royal Caribbean Cruises (RCL), and Norwegian Cruise Line (NCLH);
  • Airlines such as American Airlines (AAL)Delta Airlines (DAL)JetBlue Airlines (JBLU), United Airlines (UAL) and others;
  • Hotels stocks such as Marriott International (MAR) and Hilton Worldwide (H);
  • Las Vegas Sands (LVS)Wynn Resorts (WYNN)MGM Resorts (MGM) and other casino stocks; 
  • Ridesharing companies such as Lyft (LYFT) and Uber (UBER);
  • and even amusement parks that include Walt Disney (DIS)Six Flags (SIX), and Cedar Fair (FUN)

We are also seeing pressure in shares of companies that benefited from the opportunistic demand buying as a result of the pandemic come under pressure. For example, shares of home exercise machine companies such as Peloton (PTONand Nautilus (NLS) traded off in aftermarket trading amid prospects for health clubs and gyms like Planet Fitness (PLNT) to re-open.

Shares of Gilead jumped in after-hours trading last night after STAT news reported on a study in Chicago that has been evaluating Gilead's remdesivir in severely ill COVID-19 patients. Per the report, the results were positive with rapid recoveries in fever and respiratory symptoms observed and almost all patients discharged in less than a week.

Speaking at company meeting yesterday Apple (AAPL) CEO Tim Cook, according to a Bloomberg report, noted that “when he first joined Apple in 1998, the company responded to financial challenges with the release of the original iMac. He noted that Apple rolled out the first iPad in 2010, right after the Great Recession, and said that Apple plans to come out of the COVID-19 pandemic in a similar fashion." Apple is expected to release up to four redesigned 5G iPhones later this year speculation suggests the company will introduce a virtual-reality headset in 2021 or 2022.

Masimo (MASI) has partnered with Samsung (SSNLF) Electronics America to make the Masimo SafetyNet Patient App available on select Samsung smartphones, pre-installed and pre-configured.

The world’s biggest luxury group LVMH Moet Hennessy Louis Vuitton (LVMH) and the largest cosmetics maker L’Oréal SA (OR:FP) both shared they will be able to withstand the coronavirus knock to their businesses. Near-term, even though demand is slowly recovering in China as quarantines are lifted, both companies shared “the travel bans in much of Europe and the US that remain in place will remain a drag for longer.”

EU Passenger car registrations dropped just over 55% in March leading registrations in the March quarter to fall 25.6%. Companies to watch on this news include Fiat Chrysler (FCAU)Ford (F)General Motors (GM), and Volkswagen (VWAGY). Separately, Volkswagen reported its worldwide deliveries fell 37.6% in March, with declines across all of its passenger car brands and geographic markets. 

Despite seeing its shares trading higher this morning, Las Vegas Sands (LVS) announced it will suspend its dividend program. Columbia Sportswear (COLM) withdrew its 2020 guidance and suspended both its dividend and share buyback program. American Woodmark (AMWD) suspended its 2020 outlook and shared operations at its component plants in Mexico have been suspended through April 30.  Cedar Fair (FUN) also withdrew its long-term financial guidance and suspended its quarterly distribution. Uber (UBER) too withdrew its 2020 guidance. Facebook's (FB) Mark Zuckerberg confirmed Facebook is canceling any large physical events through June 2021.

Proctor & Gamble (PG) reported better than expected March quarter EPS despite a slight revenue miss vs. consensus expectations. The company trimmed its 2020 outlook and now sees revenue for the year up +3-4% YoY, down from its prior guidance of up 4-5%. Ahead of its earnings conference call this morning, which should breakdown its updated outlook in greater detail Proctor shared it expects to pay over $7.5 billion in dividends and repurchase $7-$8 billion of common shares in 2020.

After today’s market close, there are no companies expected to report their quarterly results. For readers looking to get a jump on the more than 450 such reports to be had next week, including 105 S&P 500 constituents, we suggest visiting Nasdaq’s earnings calendar page

On the Horizon

    • Dates to mark:
        • April 20: Before the market open, DexCom (DXCM) will become a component of the NASDAQ-100 Index, the NASDAQ-100 Equal Weighted Index, and the NASDAQ-100 Ex-Tech Sector Index
        • April 24: University of Michigan Consumer Sentiment report
        • April 28: Wholesale and Retail Inventories
        • April 28-29: Federal Reserve FOMC meeting
        • April 29: Q1 GDP (first estimate)
        • April 30: European Central Bank rate decision
        • May 1: Vehicle Sales
        • May 12-14: Google I/O Developer Conference
        • May 25: US stock market closed for Memorial Day

Thought for the Day

“A good sense of humor will get you everywhere.” ~ Josh Bowman


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Chris Versace

Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.

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Lenore Elle Hawkins

Lenore Elle Hawkins has, for over a decade, served as a founding partner of Calit Advisors, a boutique advisory firm specializing in mergers and acquisitions, private capital raise, and corporate finance with offices in Italy, Ireland, and California. She has previously served as the Chief Macro Strategist for Tematica Research, which primarily develops indices for Exchange Traded Products, co-authored the book Cocktail Investing, and is a regular guest on a variety of national and international investing-oriented television programs. She holds a degree in Mathematics and Economics from Claremont McKenna College, an MBA in Finance from the Anderson School at UCLA and is a member of the Mont Pelerin Society.

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