After Hours Summary: Super busy with earnings; CDNA +15.7%, QLYS +11.2%, AVID +9.4%, PYPL +4.8% higher on earnings; FSLY -17%, ETSY -9.7%, TWLO -5% fall on earningsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: CDNA +15.7%, QLYS +11.2%, AVID +9.4%, CCRN +8.9%, ARLO +8.8%, GIL +8.1%, SIMO +5.5%, AOSL +5.4%, QTWO +5.2%, RCII +5.2%, OSUR +5.1%, STAA +5%, HEAR +4.9%, NUS +4.8%, PRIM +4.8%, PYPL +4.8%, RUN +4.4%, PING +4%, ZNGA +3.8% (also to acquire Chartboost), TNDM +3.7%, ADPT +3.6%, ECPG +3.6%, DGII +3.5%, BE +2.9%, MDU +2.9%, NVST +2.9%, APA +2.7%, PDCE +2.5%, LBTYA +2.4%, ROOT +2.2%, MELI +1.9%, WW +1.8%, BAND +1.7%, HUBS +1.7%, SKT +1.7%, CNDT +1.6% (also CFO to step down), MRO +1.3%, QRVO +1.3%, UGI +1.3% (also increases dividend), FOXA +1.1% (also to acquire Outkick Media), FRT +0.8%, RGR +0.8%, SJI +0.6%, ADTN +0.5%, HCC +0.4%, WTRG +0.4%, BKNG +0.3%, EPR +0.3%, PRI +0.3%, BFAM +0.2%, LUMN +0.2%, ORCC +0.2%, ANSS +0.1%, GDOT +0.1%, LCI +0.1%, LNC +0.1%, NVRO +0.1%, RLJ +0.1%, WHD +0.1%
Companies trading higher in after hours in reaction to news: HOME +15.3% (in talks with Hellman & Friedman for take-private deal, according to WSJ), LGIH +6.8% (reports April 2021 home closings), CUTR +3.8% (COO resigns), BE +2.9% (BKR and BE to collaborate on efficient power and hydrogen solutions), SGMO +2.5% (files mixed securities shelf offering), ZYNE +2.1% (receives guidance from FDA on a confirmatory Phase 3 trial of Zygel), MRNA +1.5% (announces "positive" initial mRNA-1273 booster data), CWH +0.4% (to acquire Hilmerson RV), AG +0.2% (files for US$300 mln mixed securities shelf offering), MTZ +0.1% (acquires INTREN for approx. $420 mln)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: JRVR -29.9% (also announced $175 mln stock offering), FSLY -17% (also CFO to step down), YELL -14.2%, AVNW -13.3%, RKT -12.5%, TXG -9.8%, ETSY -9.7%, VAPO -8.4%, ORA -7.8%, TWO -6.7%, CTSH -6.1%, MTW -5.7%, LESL -5.6%, CENX -5.5%, INSG -5.5%, LOPE -5.5%, TWLO -5%, GKOS -4.8%, FATE -4.4%, XEC -3.3%, RDFN -3.2%, DCP -3.1%, ALB -3%, KW -3%, PLYA -2.9%, GDDY -2.8%, EQT -2.4%, CF -2.2%, GBT -2.1%, KLIC -2.1%, KTOS -2%, NBIX -1.8%, UBER -1.7%, KRO -1.6%, SRPT -1.6%, ADT -1.2%, ATSG -1.2%, UNM -1.2%, MTG -1.1%, FLT -0.9%, SLF -0.7%, ACAD -0.5%, ALL -0.5%, EZPW -0.2%, MET -0.2%, RSG -0.2%, VAC -0.2%, ACCD -0.1%, EQH -0.1%, FMC -0.1%, FNV -0.1%, RPT -0.1%, TLND -0.1%, EVH -0.1%
Companies trading lower in after hours in reaction to news: ALGT -3.4% (commences offering of 1.35 mln shares), GDDY -2.8% (names new CFO), NVAX -1.6% (announces publication of results for Phase 2b trial conducted in South Africa of NVX-CoV2373), MRK -0.5% (FDA approves KEYTRUDA for HER2-positive gastric or gastroesophageal junction adenocarcinoma), LNT -0.5% (to enter into settlement agreement on future Wisconsin rates), COST -0.5% (reports April compa +32.5%), CEQP -0.1% (files for 6 mln common unit offering by selling shareholders)
Closing Stock Market SummaryThe S&P 500 increased 0.1% on Wednesday in a mixed session that favored the value and cyclical stocks. The Dow Jones Industrial Average (+0.3%) outperformed for the third straight day and set fresh record highs, while the Nasdaq Composite decreased 0.4% after starting with a 0.9% gain. The Russell 2000 lost 0.3%.
The energy (+3.3%), materials (+1.3%), and financials (+0.9%) sectors represented the cyclical leadership, partially due to rotational factors since oil prices ($65.63/bbl, -0.07, -0.1%) and Treasury yields were muted today. Decent economic data on services sector activity and the labor market likely fueled the reopening narrative, though.
Conversely, the information technology (-0.2%), consumer discretionary (-0.4%), and communication services (-0.3%) sectors exerted the influential weakness after a half-hearted rebound bid to start the day. The lightly-weighted utilities (-1.7%) and real estate (-1.5%) sectors were the weakest performers.
Like the Nasdaq, the information technology sector was up as much as 1.0% intraday after falling about 2% yesterday. The inability to sustain a buy-the-dip effort, however, was viewed as an indicator of tiredness and wasn't conducive for risk sentiment.
Despite the disappointing price action in the growth-stock oriented sectors, overall price action remained consistent with consolidation activity. In other words, the index moves were benign with a lot of churn happening at the sector and individual stock levels.
Specifying today's economic data, the ISM Non-Manufacturing Index decreased to 62.7% in April (consensus 65.0%) from 63.7% in March. The ADP Employment Change report for April showed 742,000 jobs were added to private-sector payrolls (consensus 810,000). While they missed expectations, the reports still depicted healthy activity in the services sector and on the hiring front.
Separately, Treasury Secretary Yellen, Chicago Fed President Evans (FOMC voter), and Fed Vice Chair Clarida (FOMC voter) all downplayed sustained inflation pressures. Ms. Yellen also clarified prior comments on interest rates, saying she wasn't predicting, nor recommending, the Fed to hike rates in response to government stimulus proposals.
In the Treasury market, the 2-yr yield decreased one basis point to 0.15%, and the 10-yr yield decreased one basis point to 1.58%. The U.S. Dollar Index was little changed at 91.27.
Reviewing Wednesday's economic data:
- The ISM Non-Manufacturing Index decreased to 62.7% in April (consensus 65.0%) from 63.7% in March. The dividing line between expansion and contraction is 50.0%. The April reading marks the eleventh straight month of growth for the services sector and follows a record high reading for March.
- The key takeaway from the report is the understanding that services sector activity is still running at a fast pace, as business activity slowed only modestly from the record pace logged in March.
- The ADP Employment Change report estimated that 742,000 jobs were added to private-sector payrolls in April (consensus 810,000) following an upwardly revised 565,000 increase (from 517,000) in March. This was the largest increase since September 2020.
- The IHS Markit Services PMI for April was revised higher to 64.7% from 63.7% in the preliminary reading.
- The weekly MBA Mortgage Applications Index decreased 0.9% following a 2.5% decline in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report and preliminary Productivity and Unit Labor Costs for the first quarter on Thursday.
- Russell 2000 +13.5% YTD
- Dow Jones Industrial Average +11.8% YTD
- S&P 500 +11.0% YTD
- Nasdaq Composite +5.4% YTD
U.S. Backs Waiver of Intellectual Property Protection for Covid-19 Vaccines
Biden administration supports WTO proposal aimed at speeding up global vaccine production
WASHINGTON—The Biden administration said it would back a proposal at the World Trade Organization to waive intellectual property protections for Covid-19 vaccines to help speed up global production.
Developing nations led by India and South Africa have been pushing for the waiver, saying it is needed to stem the coronavirus pandemic. The waiver is also supported by more than 100 members of Congress.
Pharmaceutical companies and other business groups have opposed the waiver, however, saying it wouldn’t supply short-term supply production problems because contract producers lack certain needed technical knowledge.
U.S. Trade Representative Katehrine Tai said the administration’s decision was based on the extraordinary circumstances of the pandemic.
“The administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for Covid-19 vaccines,” Ms. Tai said,
Member nations of the WTO are discussing a proposal supported by over 100 developing nations calling for a temporary waiver of intellectual property rights protection related to the “prevention, containment, or treatment” of Covid-19.
Until now, the U.S., other wealthy nations and the European Union have opposed the waiver, saying IP protection provides an important incentive for innovation to develop products to fight the current and future pandemics.
Ms. Tai said the support for the waiver is just one part of Washington’s effort to get vaccines around the world quickly.
“As our vaccine supply for the American people is secured, the administration will continue to ramp up its efforts—working with the private sector and all possible partners—to expand vaccine manufacturing and distribution,” she said. “It will also work to increase the raw materials needed to produce those vaccines.”
Covid-19 Booster Shows Promise Against Variants in Early Study, Moderna Says
Booster shots improved immune responses of people who had been given Moderna’s vaccine, early study finds
Booster shots under development by Moderna Inc. MRNA -6.19% helped improve immune responses against some variants among people given the company’s Covid-19 vaccine in an early study, the biotech company said Wednesday.
The results, though preliminary, are a sign that adding booster shots several months after original vaccinations could bolster people’s immunity against more contagious strains of the virus.
The company tested giving people boosts with either a single dose of its original vaccine, mRNA-1273, or a new vaccine, mRNA-1273.351, which was modified to better match a virus variant first identified in South Africa and known as B.1.351.
The subjects received the booster shots about six to eight months after they had received the second dose of the original vaccine as part of a midstage, Phase 2 study that started last year.
Both booster shots increased immune-system agents known as neutralizing antibodies against two variants of concern: B.1.351 and P.1, which was first identified in Brazil, according to Moderna.
The immune responses were measured 15 days following the booster doses, the company said.
A booster dose of the variant-targeted vaccine induced higher neutralizing antibody concentrations against the B.1.351 variant than a booster dose of Moderna’s original vaccine, Moderna said.
“We are encouraged by these new data, which reinforce our confidence that our booster strategy should be protective against these newly detected variants,” Moderna Chief Executive Stephane Bancel said.
Fed Vice Chair Richard Clarida CNBC interview
Mr. Clarida said:
- He doesn't think its time to talk about tapering.
- Real unemployment is near 10%.
- He knows Treasury Secretary Janet Yellen was not giving the Fed advice yesterday.
- US still a long way from goals on economy.
- He doesn't think overheating is a baseline scenario.
- There would be upward pressure on prices, but inflation will not persist over a long period of time.
- He thinks 2021 growth could be near 7%.
US backs plan to suspend Covid vaccine patents during pandemic
Move to rip up intellectual property rights prompts sell-off in jab maker shares
The US has backed a temporary suspension of intellectual property rights for Covid-19 vaccines in a move likely to enrage the pharmaceutical industry, which strongly opposes a so-called waiver.
Joe Biden’s top trade adviser Katherine Tai said that while the US administration “believes strongly” in IP protections, it would support a waiver of those rules for vaccines.
“This is a global health crisis, and the extraordinary circumstances of the Covid-19 pandemic call for extraordinary measures,” Tai said in a statement.
Shares of the major coronavirus vaccine companies were hit by the announcement on Wednesday. Moderna, BioNTech and Novavax’s shares fell by between 5 and 7 per cent in New York trading, while Pfizer’s stock price fell by almost 1 per cent before recovering.
The companies did not immediately respond to request for comment.
A measure to allow countries to temporarily override patent rights for pandemic-related medical products was proposed at the World Trade Organization by India and South Africa in October, and has since been backed by almost 60 countries.
Donald Trump’s administration firmly opposed the waiver at the WTO, along with the UK, EU and Switzerland, but Tai had rattled US pharmaceutical companies by putting that position under review.
Tai said the US would “actively participate” in text-based negotiations at the WTO, but that those negotiations would take time given the consensus-based nature of the institution and the complexity of the issues involved.
“As our vaccine supply for the American people is secured, the administration will continue to ramp up its efforts — working with the private sector and all possible partners — to expand vaccine manufacturing and distribution,” Tai said.
“It will also work to increase the raw materials needed to produce those vaccines,” she added.
Tai and her staff have in recent weeks discussed the WTO’s IP rules with the chief executives of pharma companies and vaccine makers, trade unions, advocacy groups and Seth Berkley, chief executive of the UN-backed vaccine alliance Gavi.
In a speech to a WTO meeting on vaccine equity earlier this month, Tai said that both the government and the private sector would need to do their part to “live up to” the “spirit” of the Trade-Related Aspects of Intellectual Property Rights (Trips) agreement, which was born out of the HIV crisis.
Gregg Gonsalves, assistant professor of epidemiology at the Yale School of Public Health, welcomed the announcement on Wednesday as “a start”.
He added: “We need the writing of the text of this waiver to be transparent and public. But as we have always said we need tech transfer now and the US to use the $16bn already appropriated in the American Rescue Plan to lay the groundwork for international and domestic scale-up of manufacturing. There is no going back.”
Earlier this week, Anthony Fauci, the president’s chief medical adviser, said he was “agnostic” on the question of whether there should be a waiver, but warned of the political implications of backing such a move.
He said: “Going back and forth, consuming time and lawyers in a legal argument about waivers — that is not the endgame. People are dying around the world and we have to get vaccines into their arms in the fastest and most efficient way possible.”
His comments provoked a backlash from Biden’s liberal supporters however, especially when he was questioned by the journalist Mehdi Hasan on his online television show.
Saikat Chakrabati, president of the leftwing think-tank New Consensus, responded to Fauci’s comments in a tweet: “Waiving Covid patents is in no way mutually exclusive with giving vaccine doses to countries now.”
He added: “You don’t get the privilege of being ‘agnostic’ when you are the chief medical adviser to the president. There is no such thing as agnostic. Agnostic means doing the status quo, which is itself a decision.”
Jeff Bezos’s Blue Origin says it will take a civilian to space in July
Auction of first private ticket could boost company’s flagging efforts in the billionaire space race
Jeff Bezos’s space exploration company Blue Origin has launched an online auction for the first civilian seat aboard its tourism spacecraft, saying it will take flight on July 20.
If successful, the trip on New Shepard would be the first commercial space flight to take a civilian beyond the Kármán line, the internationally recognised edge of space, more than 60 miles above earth.
“This seat will change how you see the world,” the company said in a statement on Wednesday.
The achievement would give Blue Origin, which has been funded with billions of dollars from the Amazon founder, some much-needed momentum in the billionaire space race, beating both Richard Branson’s Virgin Galactic and Elon Musk’s SpaceX in taking a civilian to space.
When announcing his intention to step aside as Amazon chief executive later this year, Bezos emphasised his desire to devote more time to working on Blue Origin as a key motivation.
The company has faltered in its efforts to attract lucrative commercial and government contracts in the nascent space industry. It was beaten by SpaceX in its bid to work with Nasa in returning astronauts to the moon by 2024. The decision is being appealed.
While a handful of private citizens have travelled to space in the past, tagging along with government missions, Blue Origin hopes its New Shepard mission — named after Alan Shepard, the first American in space — will herald an era of frequent civilian space travel, sparking renewed public interest and helping to bring urgency to the fight against climate change.
Blue Origin declined to comment on whether Bezos himself planned to ever take the trip.
The announcement on Wednesday, which did not include any information regarding future ticket sales or pricing, was made to coincide with the 60th anniversary of Shepard’s flight.
“In the decades since,” the company said, “fewer than 600 astronauts have been to space above the Kármán line to see the borderless Earth and the thin limb of our atmosphere. They all say this experience changes them.”
The winning bidder, who will be one of six passengers on board, will get just a few minutes to gaze at the Earth and experience zero gravity, in a trip that in total lasts about 11 minutes from take-off to landing.
Sealed bidding began on Wednesday and will conclude with a final live auction on June 12. The proceeds will go towards Blue Origin’s charity foundation, Club for the Future, which supports education programmes in the Stem subjects: science, technology, engineering and mathematics.
Blue Origin believes it can get civilians to space before Virgin Galactic, which began selling its tickets in 2005 starting at $200,000 each, a price that has since increased.
Despite the project being hit with multiple and severe setbacks, including a fatal accident involving one of its pilots, Virgin Galactic said it had more than 600 “future astronauts” interested and had taken in excess of $80m in booking deposits. However, it does not expect to fly private customers until 2022.
Meanwhile, SpaceX’s approach to space tourism will be to take the passengers further out, into low orbit, in a trip that lasts several days and comes at significantly greater cost. The mission, named Inspiration4, is being funded by the billionaire entrepreneur Jared Isaacman, a professional jet pilot. Its total costs are yet to be disclosed.
Early next year SpaceX also plans to take three civilians to the International Space Station — at a cost of $55m each.
Blue Origin’s approach, at least for now, is intended to offer a more affordable way for civilians to experience space travel with only a day’s basic training — an appealing prospect, suggested Manny Shar, head of analytics at the space-focused consultancy BryceTech.
“We’ve done several surveys of high net-worth individuals,” he said. “There’s a keen interest among people who can afford these flights. So clearly, this market is real.”
There have so far been 15 unmanned test flights of New Shepard, which consists of a capsule launched by a rocket that releases it at 250,000 feet. All have been successful with the exception of the first, in April 2015, when the rocket suffered a crash landing, though the capsule returned to Earth safely.
The string of successful tests means that while Blue Origin is not the first company to sell tickets for a dedicated space tourism trip, it does stand a strong chance of being the first to actually honour them, suggested Thomas Markuzic, chief executive of Firefly Aerospace, and a former engineer at Blue Origin, SpaceX and Virgin Galactic.
“When it comes to space tourism, no one has done it as carefully and rigorously as Blue Origin,” Markuzic said. “If Jeff Bezos and Blue Origin are out there, saying that they’re ready to go, I truly believe that they are ready to go.”
Bezos has so far bankrolled the company by selling his Amazon stock. In 2018 he said he planned to plough about $1bn into the effort a year. But any future return on that investment would require Blue Origin to more forcefully compete against SpaceX’s commercial success, said Chris Quilty, a leading space strategy consultant.
“Space tourism is very much a side note to the core industry,” he said, noting that development of New Glenn, Blue Origin’s heavy-lift rocket, had been delayed following the US Space Force’s decision in August to no longer work with Blue Origin on phase 2 of its National Security Space Launch project. The contract instead went to SpaceX and the United Launch Alliance, a Lockheed Martin and Boeing joint venture.
As a result, the maiden flight of New Glenn is not expected until late 2022, having initially been scheduled for 2020.
Last month’s announcement that Blue Origin had failed to win the Nasa contract to return astronauts on the Moon was said to have been an issue of pricing, with SpaceX’s $2.9bn offer beating Blue Origin by a “wide margin”, according to documents leaked to The Washington Post.
Blue Origin — as well as a third player, Dynetics — have appealed against the decision, saying Nasa had “moved the goalposts at the last minute” on the plan, particularly when it came to the importance of cost in its decision. Such appeals are rarely successful, Quilty said.
“I guess the broader question,” he added, “is how much money is [Blue Origin] willing to lose in order to gain market share, or a seat at the table, relative to SpaceX?”