WSJ : The Secret Group of Scientists and Billionaires Pushing a Manhattan Projec

The Secret Group of Scientists and Billionaires Pushing a Manhattan Project for Covid-19
They are working to cull the world’s most promising research on the pandemic, passing on their findings to policy makers and the White House

A dozen of America’s top scientists and a collection of billionaires and industry titans say they have the answer to the coronavirus pandemic, and they found a backdoor to deliver their plan to the White House.

The eclectic group is led by a 33-year-old physician-turned-venture capitalist, Tom Cahill, who lives far from the public eye in a one-bedroom rental near Boston’s Fenway Park. He owns just one suit, but he has enough lofty connections to influence government decisions in the war against Covid-19.

These scientists and their backers describe their work as a lockdown-era Manhattan Project, a nod to the World War II group of scientists who helped develop the atomic bomb. This time around, the scientists are marshaling brains and money to distill unorthodox ideas gleaned from around the globe.

They call themselves Scientists to Stop Covid-19, and they include chemical biologists, an immunobiologist, a neurobiologist, a chronobiologist, an oncologist, a gastroenterologist, an epidemiologist and a nuclear scientist. Of the scientists at the center of the project, biologist Michael Rosbash, a 2017 Nobel Prize winner, said, “There’s no question that I’m the least qualified.”

This group, whose work hasn’t been previously reported, has acted as the go-between for pharmaceutical companies looking for a reputable link to Trump administration decision makers. They are working remotely as an ad hoc review board for the flood of research on the coronavirus, weeding out flawed studies before they reach policy makers.

The group has compiled a confidential 17-page report that calls for a number of unorthodox methods against the virus. One big idea is treating patients with powerful drugs previously used against Ebola, with far heftier dosages than have been tried in the past.

The Food and Drug Administration and the Department of Veterans Affairs have already implemented specific recommendations, such as slashing manufacturing regulations and requirements for specific coronavirus drugs.

National Institutes of Health Director Francis Collins told people this month that he agreed with most of the recommendations in the report, according to documents reviewed by The Wall Street Journal and people familiar with the matter. The report was delivered to cabinet members and Vice President Mike Pence, head of the administration’s coronavirus task force.

Dr. Cahill’s primary asset is a young lifetime of connections through his investment firm. They include such billionaires as Peter Thiel, Jim Palotta and Michael Milken—financiers who afforded him the legitimacy to reach officials in the middle of the crisis. Dr. Cahill and his group have frequently advised Nick Ayers, Mr. Pence’s longtime aide, and agency heads through phone calls over the past month.

No one involved with the group stands to gain financially. They say they are motivated by the chance to add their own connections and levelheaded science to a coronavirus battle effort that has, on both state and federal levels, been strained.

“We may fail,” said Stuart Schreiber, a Harvard University chemist and a member of the group. “But if it succeeds, it could change the world.”

Steve Pagliuca, co-owner of the Boston Celtics and the co-chairman of Bain Capital—as well as one of Dr. Cahill’s investors—helped copy edit drafts of their report, and he passed a version to Goldman Sachs Group Inc. Chief Executive David Solomon. Mr. Solomon got it to Treasury Secretary Steven Mnuchin.

The group’s members say they are aware that many of their ideas may not be implemented, and could be ignored altogether by the Trump administration.

This account is based on interviews with scientists, businesspeople, government officials, as well as a review of related documents.

Break out
Only two years ago, Dr. Cahill was studying for his M.D. and PhD. at Duke University, conducting research on rare genetic diseases and wearing $20 Costco slacks. He assumed he would continue the work after graduation.

Instead, he reconnected with a friend who introduced him to a job at his father’s company, the blue-chip investment firm the Raptor Group.

Dr. Cahill got hooked on investing, particularly in life sciences. He reasoned he could make a bigger impact by identifying promising scientists and helping them troubleshoot problems—both scientific and financial—than doing research himself.

After a stint at Raptor, he formed his own fund, Newpath Partners, with $125 million from a small group of wealthy investors, including Silicon Valley stalwart Mr. Thiel and private-equity founders like Mr. Pagliuca. They were attracted to his blunt approach, as well as his interest in tackling intractable problems.

In early March, as the Covid-19 death toll mounted, Dr. Cahill was intrigued and a little depressed with the state of research on the virus. “Science and medicine were the furthest things removed from everything happening,” he said.

His investors peppered him with questions about the virus, and he organized a conference call to share some against-the-grain ideas on how to accelerate drug development and the like. He expected about 20 people.

When Dr. Cahill tried to dial in the meeting, he was rejected because the call had reached capacity. Then his cellphone buzzed from a New York number. It was National Basketball Association Commissioner Adam Silver. He, too, wanted the meeting’s access code. Dr. Cahill later gave him a personal briefing.

Newpath’s deep-pocketed investor base had spread word of the call, and hundreds of people were on the line, most of whom he had never met, including Mr. Milken.

When he finally got on the call, Dr. Cahill took a deep breath and said he had been working with friends to whittle down potential Covid-19 treatments to the most promising. He said he largely dropped his investing work to focus on a hunt for a cure.

After an hour, he hung up and found his email inbox full of ideas and offers to help, including from Mr. Milken’s team. “For the 50 years I’ve been involved in medical research I have never seen collaboration as we have today,” Mr. Milken said.

Dr. Cahill received a handful of notes from advisers to the vice president. They also had been on the call.

The scientist-investor had gained a platform. All he needed was a plan.

Tracing contacts
One of Dr. Cahill’s first calls was to Mr. Schreiber, a founder of several private companies.

Mr. Schreiber looped in a longtime friend, Edward Scolnick, former head of research and development at pharmaceutical giant Merck & Co., where he helped develop 28 new drugs and vaccines. Dr. Scolnick was blunt: A vaccine would take at least 18 months to hit the market under normal circumstances, he told Mr. Schreiber, “if you’re damn lucky.”

Mr. Schreiber responded, “What about six months?”

The team drew up a list of roughly two dozen companies that could benefit from their recommendations and pledged to sell any shares in them immediately. One early member said he couldn’t and was kicked out.

Much of the early work involved divvying up hundreds of scientific papers on the crisis from around the world. They separated promising ideas from dubious ones. Each member blazed through as many as 20 papers a day, around 10 times the pace they would in their day jobs. They gathered to debate via videoconference, text messages—“like a bunch of teenagers,” Mr. Rosbash said—and phone calls.

Personal hygiene went by the wayside. Michael Lin, a Stanford University neurobiologist, began disabling the camera on his phone to protect his vanity. “A couple of days, I’ve had seven or eight Zoom meetings, which will itself I’m sure cause some kind of disease,” joked David Liu, a Harvard University chemical biologist.

Debates haven’t always been purely science. The group discussed, for instance, whether to suggest that public-health authorities rename the virus “SARS-2,” after the 2003 China animal virus. To them, the name sounded scarier and might get more people to wear face masks. They dropped it.

The team pledged to try to block out politics—not an easy task in the noise and fury of a presidential election year.

Hydroxychloroquine, a malaria drug promoted by the president, was dismissed after the group’s resident expert, Ben Cravatt of Scripps Research in La Jolla, Calif., determined it was a long shot at best. The drug received only a passing mention in the group’s final report.

The group also disparaged the idea of using antibody testing to allow people back to work if their results showed they had recovered from the virus. Mr. Cravatt, a chemical biologist, declared it “the worst idea I’ve ever heard.” He said that prior exposure may not prevent people from giving the virus to others, and that overemphasizing antibody testing might tempt some people to intentionally infect themselves to later obtain a clean bill of health.

The group’s initial three phases of recommendations, contained in its report, center on leveraging the scale of the federal government. For instance, buy medicines not yet proven effective as a way to encourage manufacturers to ramp up production without worrying about losing money if the drugs fail. Another is to slash the time required for a clinical review of new drugs to a week from nine months or a year.

The group next needed to get their recommendations to the right people in the Trump administration. For that, Dr. Cahill tapped another well-placed billionaire.

An introduction
Brian Sheth, co-founder of private-equity firm Vista Equity Partners, and a Democrat, had been watching the effort gather steam from his home in Austin, Texas. He was an early investor in Dr. Cahill’s fund and had been on the first call. His expertise was technology, though, not immunology.

He had become friendly with Thomas Hicks Jr., the Dallas businessman and co-chairman of the Republican National Committee. Mr. Sheth introduced Mr. Hicks to Dr. Cahill’s group.

The connection cinched ties between a group of mostly liberal scientists from left-leaning institutions with a Republican stalwart who hunts birds with Donald Trump Jr.

In his first chat with the group, Mr. Hicks said, “I’m not a scientist. Make it clear enough for me, and then tell me where the red tape is.”

A major concern of the scientists was the FDA. The scientists had in their research identified monoclonal antibody drugs that latch onto virus cells as the most promising treatment. But to make the medicine in sufficient quantities, one drugmaker, Regeneron Pharmaceuticals Inc., would have to shift some of its existing manufacturing to Ireland. FDA rules required a monthslong wait for approval.

Mr. Scolnick, who had tussled with bureaucracy during the AIDS epidemic, tried reaching the FDA. The call ended poorly after the bureaucrats told the group they already had the pandemic under control. In a group call afterward, one of the scientists said, of the FDA: “They’re the problem here.”

Dr. Cahill got in touch with Mr. Ayers. Once the group briefed the vice president’s aide on the bottleneck, Mr. Ayers said he knew who to call. That evening, March 27, Regeneron received a call from the FDA. They had permission, starting immediately, to shift production to Dublin.

“That was proof positive that what we were doing was starting to work,” Mr. Rosbash said.

The group also made inroads with the VA, the largest health care system in the U.S. The scientists pushed the division’s medical staff to allow veterans with Covid-19 to join existing studies in such areas as prostate cancer, to see if already-approved drugs might be effective against the virus. They spoke to the VA’s chief medical officer and secretary about the proposal and learned the initiative was being fast-tracked.

Mr. Pagliuca spoke to Charles Baker, the Republican governor of Massachusetts, on the phone about the report. The governor, Mr. Pagliuca said, planned to adopt elements of the plan.

With much of their scientific proposals under advisement, or already in the process, the group has an eye on the post-Covid-19 world. Mr. Pagliuca pushed the scientists to add a fourth phase to the plan—reopening America.

The ideas include development of a saliva test, and scheduling tests at the end of the workday so results are available by morning. They also have suggested a nationwide smartphone app that requires residents to confirm each day that they don’t have any of 14 symptoms of a cold or fever.

Group members have continued their discussions with administration officials in recent days, hoping their confidential plan turns to action.

“We need the entire nation—government, business and science—to unite to defeat this,” Mr. Pagliuca said.

WSJ : The Federal Reserve Is Changing What It Means to Be a Central Bank

The Federal Reserve Is Changing What It Means to Be a Central Bank
By lending widely to businesses, states and cities, the Fed is breaking taboos about who gets money to prop up a frozen U.S. economy

The Federal Reserve is redefining central banking.

By lending widely to businesses, states and cities in its effort to insulate the U.S. economy from the coronavirus pandemic, it is breaking century-old taboos about who gets money from the central bank in a crisis, on what terms, and what risks it will take about getting that money back.

And with large-scale purchases of U.S. Treasury securities, the Federal Reserve is stretching the boundaries for what a central bank will do to finance soaring federal debt—actions that move it deeper into political decisions it usually tries to avoid.

Fed leaders don’t like doing any of this. They believe they have no better alternative.

“None of us has the luxury of choosing our challenges; fate and history provide them for us,” Fed Chairman Jerome Powell said in a speech this month. “Our job is to meet the tests we are presented.”

Economists project the central bank’s portfolio of bonds, loans and new programs will swell to between $8 trillion and $11 trillion from less than $4 trillion last year. In that range, the portfolio would be twice the size reached after the 2007-09 financial crisis and nearly half the value of U.S. annual economic output.

It would make its role in the economy far greater than during the Great Depression or World War II, according to Wall Street Journal calculations. The portfolio had reached $6.57 trillion by April 22.

“The Fed is being sent on a mission to places it has never been before,” says Adam Tooze, a Columbia University history professor who writes about financial crisis and war. Due to the financial and economic shocks caused by the virus, he says, central-bank officials “are being sucked into a series of entanglements that they cannot control and that they normally will not touch with a long pole, but this time felt they had to go in, and go in hard.”

Many government policy makers, including past Fed critics, support its actions this time, though political calculations could change quickly.

“This should be considered a very freakish Black Swan event, not anything that would be revisited under ordinary circumstances,” says Sen. Pat Toomey (R., Pa.), who criticized the Fed after the last crisis for enabling large federal budget deficits. Last month, he helped advance the $2.2 trillion economic-rescue legislation in Congress that puts the Fed at the center of the government’s economic-rescue efforts.

Among risks the Fed is taking: that some programs won’t work, that officials won’t be able to unwind them, that politicians will grow accustomed to directing the central bank to fix problems its tools aren’t designed to solve, and that public discontent about the central bank’s choices will erode its authority over time.

This last risk is prominent because the Fed’s tools are better suited to helping large firms that borrow in capital markets than small ones that don’t.

“Capitalism without bankruptcy is like Catholicism without hell,” Howard Marks, director of investment fund Oaktree Capital Management LP, said in a letter to shareholders this month, writing that “Markets work best when participants have a healthy fear of loss.” Mr. Marks in a later interview said he didn’t want to imply Mr. Powell’s actions were wrong: “The fact that something can have negative, unintended consequences, doesn’t mean it’s a mistake.”

Mr. Powell defines the government’s task from a different moral perspective. “People are undertaking these sacrifices for the common good,” he said in his speech. “We need to make them whole to the extent we have the ability.”

After cutting interest rates to near zero in mid-March, the Fed began a torrent of bond-buying programs to stabilize markets. Between March 16 and April 16, it bought Treasury and mortgage securities at a pace of nearly $79 billion a day. By comparison, it bought about $85 billion a month between 2012 and 2014.

Fed purchases help the government inexpensively finance its debt, which is soaring as the Treasury sends checks directly to households and spends more on unemployment insurance.

The central bank is preparing a second wave, programs in partnership with the Treasury to get loans directly to companies and state and local governments. Congress has armed the Treasury with $454 billion to work in cooperation with the central bank for the effort.

The Fed will lend as much as 10 times the amount Congress appropriated, with the Treasury taking the first losses on loans that go bad. The Treasury has so far committed around 40% of those funds to some of nine different programs, leaving room to expand them or deploy others.

Congress called upon the Fed in part because it developed capabilities to intervene during the 2008 banking crisis and is positioned like few other institutions to move fast. It also entered the crisis outside a partisan fray marked by distrust between congressional Democrats and the Trump administration, lawmakers and analysts say.

And Mr. Powell’s measured response to President Trump’s relentless attacks on him over the past two years have dispelled concerns among lawmakers that the central-bank chief would be a footman for the president or his re-election.

“The Fed is not naturally suited to do this,” says Douglas Holtz-Eakin, a Republican former director of the Congressional Budget Office, “but the Treasury is using the Fed as its arm because the Fed is better at setting up these facilities and getting the money out.”

Fed officials will hold a remote gathering Tuesday and Wednesday this week. Discussion will turn to implementation of an array of programs announced in the past few weeks and how much further to push its bond purchase programs.

Unique power
The Fed has a unique power, the ability to create money by crediting banks with funds they can lend. That helps it guide the cost of money, which is the interest rate.

Low rates and money printing spurred consumer-price inflation after World War II and during the 1970s. Fed officials don’t see that as a risk now because the economy is sinking, meaning less consumer demand and less inflation. Moreover, inflation has been dormant for years in the U.S. and other countries like Japan with aggressive central banks.

Bigger federal borrowing needs will make it costly for the Treasury should interest rates eventually rise. “If the economy recovers and inflation is a problem, that will be the test,” says former Fed Chairwoman Janet Yellen. That isn’t a problem now. If it ever is, she says, “I think the Fed is going to win out on that.”

Whether the economy stabilizes depends on many forces out of the Fed’s control, including whether the coronavirus’s spread slows, whether other authorities put in place testing and monitoring programs to tame it, and whether treatments and vaccines are discovered.

The Fed said Monday it would expand a forthcoming program to provide financing to state and local governments squeezed by declining tax revenue. It will buy debts of up to three years in maturity issued by up to 261 municipal borrowers, including the 50 states, the District of Columbia, counties of at least 500,000 residents and cities of at least 250,000. It had initially said it would limit such purchases to counties of at least two million and cities of at least one million, in addition to the states.

Political minefield
The Fed has long seen lending to states and cities as a political minefield. Its initial population restriction for municipal borrowers has already invited blowback.

In a letter to Mr. Powell this month, Rep. Maxine Waters (D., Calif.), chairwoman of the House Financial Services Committee, said the program would have excluded 35 cities most heavily populated by African-Americans. “This approach risks exacerbating racial disparities in the federal government’s response,” she wrote.

Sen. Mike Crapo (R., Idaho), chairman of the Senate Banking Committee, sent Mr. Powell a letter the same day noting none of the municipalities in his state would be eligible and expressing unhappiness rural communities might be left behind. Other lawmakers have expressed similar complaints.

Several analysts have said if lawmakers want more aid for local governments, they are better positioned to provide grants to states rather than rely on the Fed to make loans.

Fed officials worry they might end up holding municipal debts borrowers can’t repay. Left unanswered are questions such as what role it would play in a bankruptcy and if it would support the borrower or line up with other creditors to get its money back.

“The Fed doesn’t want to be in a position to say, ‘You have to raise taxes or cut pay to policemen or firemen,’ ” says Scott Alvarez, the Fed’s general counsel from 2004 to 2017. “That’s one of the reasons we didn’t make loans directly to municipalities in 2008.”

The central bank experienced awkward moments in the previous crisis managing assets it held due to its bailout of investment bank Bear Stearns Cos.—including when it foreclosed on a shopping mall in Oklahoma City, owned loans on Hilton hotels in Hawaii and Puerto Rico, and sold a portfolio of debt on Red Roof Inn hotels after its bankruptcy. Mr. Alvarez says the Fed can be patient with assets that go bad because it doesn’t have to answer to shareholders.

The Fed’s corporate-debt backstops have been extended to include so-called fallen angels, companies recently downgraded to junk status. It also will buy exchange-traded funds that invest in junk bonds, and it will provide financing to investors in business-loan funds known as collateralized loan obligations, or CLOs.

Many private-equity funds added debt to their portfolio companies before the crisis in the junk-bond and CLO markets. By supporting junk bonds and CLOs, the Fed could be helping private-equity funds that made their portfolio companies vulnerable before the crisis with heavy debt burdens.

“It does take a fair amount of work to think about all the incentives our facilities are creating,” says Boston Fed President Eric Rosengren.


Fed officials have concluded they need to offer broad support to corporate-debt markets to prevent credit from drying up and producing even more wide-scale bankruptcy and job loss. “I’d be willing to take more credit risk than I would have before this situation,” says Cleveland Fed President Loretta Mester, “because this is a huge, unprecedented, negative shock.”

The Fed’s $600 billion Main Street Lending Program will be its most complicated task, current and former Fed officials say. For the first time since the Great Depression, the Fed will lend directly to small and midsize businesses, offering loans of up to four years through banks. It is trying to reach firms too large to qualify for Small Business Administration loans but too small to issue debt on Wall Street.

“The Fed took a hit to its reputation when it was seen as having facilitated the 2008 bailout of Wall Street and leaving Main Street un-helped,” says Vincent Reinhart, former Fed economist and now chief economist at asset-management firm Mellon. “They’re not going to do that again.”

The challenge isn’t just deciding who gets money. It is also how much to charge and on what terms.

‘Bagehot’s Dictum’
Central bankers live by “Bagehot’s Dictum,” named for the 19th-century British writer who edited the Economist magazine. To stop a panic, Walter Bagehot said, a central bank should lend freely against good collateral at an interest rate a bit higher than normal.

Brian Sack, the director of global economics at investment fund D.E. Shaw who ran the New York Fed’s markets desk after the last crisis, says that might not be well suited for the moment. Punitive rates implied by Bagehot might not be appropriate, and collateral is hard to size up in a mandatory shutdown. His addendum to Bagehot, he says: “Lend more freely than Bagehot under some circumstances.”

The Fed doesn’t want to lend to businesses that aren’t viable, says Ms. Mester, the Cleveland Fed president. It also doesn’t want to let viable ones fail because cash flow is temporarily cut off. Distinguishing between the two is the challenge—especially now. With Americans unable or unwilling to engage in commerce, nothing more than the passage of time may be needed to turn illiquidity into insolvency.

The Fed limited how much debt small firms can have before qualifying for Main Street program loans. It is requiring banks to hold 5% of each loan to insulate itself from becoming a dumping ground for bad debts. Borrowers will face restrictions on executive compensation and dividend payments. The Treasury will take the first $75 billion of any losses.

One danger is that the Fed revives Wall Street, where its tools have been tested, while the Main Street program falls short, says Glenn Hubbard, a Columbia economics professor who was chairman of the Council of Economic Advisers under President George W. Bush.

“I’m really worried it’s not going to work,” he says, noting that would be a reputational blow to the central bank.

Unlike in the 2008 bailouts, where the Fed and Treasury turned profits on bank rescues, Mr. Hubbard says, officials shouldn’t be concerned about recouping the Treasury’s investment. “If the Fed doesn’t lose money,” he says, “that says they weren’t lending to borrowers who needed the money.”

Another danger is that Congress gets used to asking the Fed to intervene. The central bank has aggressively guarded its independence, especially after it succumbed to President Nixon’s pressure to goose the economy ahead of the 1972 election and was later blamed for the resulting inflation.

Already, lawmakers are pressing the Fed to bail out particular sectors. On Friday, Sen. Ted Cruz (R., Texas) sent a letter to Mr. Powell asking the central bank to come up with ways to lend to oil-and-gas companies that have too much debt to qualify for existing Fed programs. Mr. Powell recently said the Fed’s authorities wouldn’t permit such rescues.

Last month, Fed lawyers helped nix legislative language that would have had Congress explicitly directing the Fed to launch lending programs, according to people familiar with the negotiations. Instead, Congress provided money to the Treasury that the Treasury could use in collaboration with the Fed at the discretion of both.

Mr. Toomey, who consulted with Fed officials during the negotiations, says he hopes Congress made clear such coordination was reserved for emergencies: “You have to be concerned about the precedents.”

The Fed’s actions represent a level of cooperation with Congress and Treasury not seen since World War II. Back then, the central bank held down long-term interest rates to help finance war spending and the recovery. The Fed successfully pressured the Truman administration to agree in 1951 to end that policy.

Treasury and Fed coordination during World War II “was the right thing to do, but it was hard to undo,” says Jeremy Stein, a former Fed governor who chairs Harvard University’s economics department. “You can imagine a similar thing playing out here.”

Ms. Yellen says such concerns can be overstated. She and former Fed Chairman Ben Bernanke say the Fed’s independence would be more seriously imperiled if it didn’t act boldly to protect the economy.

“This is why the Federal Reserve was invented,” says Ms. Yellen, “to do emergency lending in a crisis.”

>>> Europe : Brokers Upgrades & Downgrades - 258th of April 2020 V2(+)

>>> Up
* Borregaard Raised to Buy at SEB Equities; PT 115 kroner
* EnQuest Raised to Hold at Jefferies; PT 11 pence
* Go-Ahead Raised to Buy at Jefferies; PT 1,710 pence
* IG Group PT Raised to 910 pence from 770 pence at Peel Hunt
* Loomis Raised to Buy at SEB Equities; PT 290 kronor
* Plus500 PT Raised to 1,680 pence from 1,500 pence at Liberum (+)
* Royal Mail Raised to Buy at Citi; PT 210 pence
* Stagecoach Raised to Buy at Jefferies; PT 85 pence
* Swissquote Raised to Buy at AlphaValue
* Talenom Raised to Accumulate at Inderes; PT 7.50 euros (+)
* Wm Morrison Supermarkets Raised to Buy at Berenberg

>>> Down
* Accor Cut to Sell at MainFirst; PT 20 euros
* Aker Cut to Sell at Handelsbanken; PT 220 kroner
* Aker Solutions Cut to Sell at SpareBank; PT 3.50 kroner
* Aker BP Cut to Sell at Handelsbanken; PT 140 kroner
* Aker BP Cut to Hold at Jefferies
* Equinor Cut to Sell at Handelsbanken; PT 120 kroner
* Ferrari Cut to Underperform at Jefferies; PT $108
* Husqvarna Cut to Hold at Berenberg; PT 60 kronor
* InterContinental Hotels Cut to Hold at MainFirst
* Intl Petroleum Cut to Hold at Jefferies; PT 15 kronor
* Kvaerner Cut to Hold at Arctic Securities; PT 8 kroner
* Kvaerner Cut to Hold at SEB Equities; PT 6 kroner (+)
* Lundin Energy Cut to Hold at Jefferies; PT 234 kronor
* Norway Royal Salmon Cut to Hold at DNB Markets; PT 190 kroner
* Paradox Interactive Cut to Sell at SEB Equities; PT 155 kronor
* QinetiQ Cut to Hold at Investec; PT 335 pence (+)
* Sainsbury Cut to Sell at Berenberg; PT 170 pence
* Salzgitter Cut to Hold at Bankhaus Metzler; PT 14 euros (+)
* Sixt Cut to Hold at Commerzbank; PT 47 euros
* Software AG Cut to Equal-Weight at Morgan Stanley; PT 28 euros

>>> Initiation
* Ambu Rated New Buy at Berenberg; PT 291 kroner
* Cairn Energy Resumed Underperform at Jefferies; PT 85 pence
* Cosmo Rated New Buy at Research Partners; PT 87.50 Swiss francs
* Wizz Air Reinstated Buy at Goldman; PT 3,410 pence

>>> Call
* ABB Shares Seen Gaining After 1Q Earnings, Citi Says (+)
* AB InBev FY20 Consensus Has a ‘Long Way to Fall,’ Bernstein Says (+)
* Ambu Earnings Potential Leads Berenberg to Initiate at Buy
* Burford Shares to React Positively to New Disclosures: Jefferies (+)
* Capgemini’s Lack of Visibility Likely to Pressure Stock: Goldman (+)
* Eurofins 1Q Beats Estimates, Stock May Outperform Near Term: MS (+)
* Ferrari Cut at Jefferies on Recession Risk, Formula One Concern (+)
* Kuehne + Nagel’s 2Q Likely to Be Very Painful: Berenberg
* Sainsbury Cut, Grocers’ Bank Exposure Overlooked: Berenberg
* Software AG Upside Now Limited Following Rally: Morgan Stanley
* Symrise Shares Seen Underperforming After Disappointing 1Q: MS (+)
* Jefferies Bullish on U.K. Buses, Raises Stagecoach and Go-Ahead
* UBS Results Strong and ‘In the Right Place,’ Goldman Sachs Says (+)

FT : Brussels looks for ways of saving Europe’s sacred summer break

Brussels looks for ways of saving Europe’s sacred summer break
Commission under pressure to come up with a common system of rules to allow limited travel and prevent countries going it alone

Gradual moves towards easing Europe’s lockdown measures have turned political attention on an industry that is the lifeblood of countless regions across the continent: tourism.

The woes of the tourism industry and the legions of small businesses that rely on it have shot up Brussels’ list of priorities after Thierry Breton, EU single market commissioner, last week promised to convene a special summit later this year dedicated to reviving the industry. EU tourism ministers held a virtual meeting on Monday to discuss how to help shelter a sector that will be battered by economic lockdowns during the lucrative summer months.

Discussing holiday plans for Europe’s quarantined populations is not without its pitfalls. Ursula von der Leyen, European Commission president, learnt the hard way when she announced earlier this month that no one should be planning a summer break. The commission chief was later forced to recant and insisted that holidaymakers could make the most of “smart solutions to have a summer vacation” as restrictions ease.

The potential scale of the devastation is eye-watering. Mr Breton told MEPs last week that at worst, the sector is facing a €400bn wipeout from lost visitors this year. The OECD thinks the sector — which makes up 10 per cent of EU’s gross domestic product — could suffer a 70 per cent decline.

But with the summer months looming, member states that are ready to relax quarantine measures are also offering hope to their ravaged tourist hotspots. Greece’s tourism minister tells The Guardian that his government is preparing new rules for post-corona holidays in an attempt to salvage something of the summer season for its islands and resorts.

Greece is among a group of countries that is looking to Brussels to provide a common set of rules for potential holidaymakers who want to venture out for part of the long summer break. Ministers from seven countries, including Greece, Spain, Portugal, Cyprus and Malta on Monday signed a joint statement calling on the EU to come up with a dedicated recovery plan for the tourism industry and system to manage travel and hospitality.

With some countries relaxing restrictions faster than others, Brussels will want to avoid a chaotic summer where travellers are subject to a myriad of different restrictions in different countries.

A Greek government official told the Brussels Briefing that Athens wanted to see “common rules for all modes of transportation and shared protocols for airports, hotels, and restaurants”.

Julia Farrugia Portelli, Malta’s tourism minister, told her counterparts that the government had managed to salvage 99 per cent of jobs in a sector that accounts for 30 per cent of the island’s GDP. Malta has also called on the EU to consider setting up “safe corridors between territories and regions” to allow travellers who have undergone relevant safety checks to cross borders.

Greece’s health minister has also touted a similar idea, dubbed as “health passports”. As Le Soir reports, there is already some concern that member states will set up bilateral corridors between themselves and create a de facto class of “privileged” European travellers.

“We need to commit ourselves to reopening as soon as possible. There are risks but we need to manage risks”, said Farrugia Portelli. “Too much is at stake to simply lie inactive, until relief arrives, in the form of a vaccine. We cannot go down that road.”

>>> Stoxx 600 Pre-Market Indications

  • Lufthansa (LHA TH) +7.4%
    • Lufthansa’s Swiss to Get CHF1.5b State-Backed Bank Loan: T-A
    • Germany to Invest About EU9b in Lufthansa: Business Insider
  • Evotec SE (EVT TH) +2.8
  • Renault (RNL TH) +2.7%
  • Wirecard (WDI TH) +2.2%
    • Wirecard Says KPMG Could Not Review All Data for Audit
  • Carnival Plc (POH1 TH) +2%
  • Hochtief (HOT TH) +1.7%
  • TUI (TUI1 TH) +1.4%
  • IAG (INR TH) +1.4%
  • MorphoSys (MOR TH) +1.3%
  • BP (BPE5 TH) +1.3%
    • TOPLive Starts: Follow BP’s First-Quarter Earnings in Real Time
  • Telefonica Deutschland (O2D TH) -0.4%
  • Adidas (ADS TH) -0.4%
  • MTU Aero (MTX TH) -0.4%
  • Siemens Healthineers (SHL TH) -0.4%
  • Symrise (SY1 TH) -0.8%
    • Symrise 1Q Sales EU917.1 Mln, +8% Y/y, Est. EU938.3 Mln
  • TOMRA Systems ASA (TMR TH) -1%
  • Shell (R6C TH) -1.2%
    • Nippon Steel Cor: Nippon Steel Receives Third Shell Supplier Award Apr. 28, 2020
  • Kion (KGX TH) -1.5%
    • Kion 1Q Adjusted Ebit EU144.0 Mln, -21% Y/y, Est. EU159.0 Mln
  • Ferrari (2FE TH) -2%
    • Ferrari Cut to Underperform at Jefferies; PT $108
  • Polymetal (PM6 TH) -3.2%
    • Polymetal Sees Full Year Gold Production 1.50 Mln Equivalent Oz

>>> TradeGate Pre-Market Indications

DAX:
  • Lufthansa (LHA TH) +5.5%
    • Lufthansa’s Swiss to Get CHF1.5b State-Backed Bank Loan: T-A
    • Germany to Invest About EU9b in Lufthansa: Business Insider
  • Wirecard (WDI TH) +1.4%
    • Wirecard Says KPMG Findings Don’t Require Account Restatements
  • Continental AG (CON TH) +1.4%
    • Continental AG 1Q Adjusted Ebit Margin 4.4% Vs. 8.10% Y/y
  • Merck KGaA (MRK TH) +1.2%
  • Infineon (IFX TH) +1.2%
  • Siemens (SIE TH) +0.1%
  • Deutsche Bank (DBK TH) +0.1%
    • Deutsche Bank HY Bond Trading 3x Average; Clients Net Sellers
  • VW (VOW3 TH) +0.1%
  • Deutsche Post (DPW TH) -0.1%
  • E.On (EOAN TH) -0.2%
MDAX:
  • Evotec SE (EVT TH) +3.3%
  • Siltronic (WAF TH) +2.1%
    • Siltronic First Quarter Ebitda EU84.2 Mln, -34% Y/y
  • Delivery Hero (DHER TH) +2%
    • Delivery Hero Orders Jump 92% as Lockdown Boosts Food Delivery
  • Cancom (COK TH) +1.9%
    • Cancom Full Year Adjusted Ebitda EU130.5 Mln
  • MorphoSys (MOR TH) +1.7%
    • I-Mab, Morphosys Announce First Patient Dosed in China Study
  • Airbus (AIR TH) +0.1%
  • Varta (VAR1 TH) +0.1%
  • ProSieben (PSM TH) -0%
  • Deutsche PBB (PBB TH) -0.8%
  • Kion (KGX TH) -1%
    • Kion 1Q Adjusted Ebit EU144.0 Mln, -21% Y/y, Est. EU159.0 Mln
SDAX:
  • Nordex (NDX1 TH) +2.7%
  • Corestate (CCAP TH) +2.6%
  • Hamborner REIT (HAB TH) +2.4%
  • LPKF (LPK TH) +2.2%
  • Steinhoff (SNH TH) +1.9%
  • Bilfinger (GBF TH) +1.4%
  • Kloeckner (KCO TH) +1.4%
  • Shop Apotheke (SAE TH) +1.1%
  • Deutz (DEZ TH) -0.5%
  • Aixtron (AIXA TH) -0.6%

>>> What to look at today - 28th of April 2020

U.S. and European futures were mixed along with stocks in Asia on Tuesday as governments mulled reopening economies. Crude oil extended sharp losses from Monday.
Shares in Japan and Australia ended little changed, and South Korean and Hong Kong stocks climbed in a choppy Asian session. Chinese stocks fluctuated after a report the country would ease some initial public offering rules. S&P 500 futures retreated after the index closed at its highest since March 10. West Texas oil futures in New York slumped to around $11 a barrel. Treasury yields held Monday’s gains.
US After Hours FFIV +10.6% and AMKR +6.2% up on earnings; HLIT -11.6%, SANM -7.5% seeing weakness on earnings

Nikkei -0.18% Hang Seng +0.91% CSI +0.82% Shanghai +0.01% Shenzen -0.01%

Eur$ 1.0820 CNH 7.0921 CNY 7.0857 JPY 107.20 GBP 1.2418 CHF 0.9765 RUB 74.3541 TRY 6.9940 WTI 11.18 -12.50%

S&P -0.13% EuroStoxx +0.25% FTSE +0.24% Dax +0.43% SMI +0.60%

Macro :
- Germany’s Cases Slow; Pathogen Seen as Seasonal: Virus Update
- Ermotti Says Clients Ready to Deploy Cash Selectively: TOPLive
- Oil Extends Drop Near $11 as ETF Selloff Exacerbates Volatility

Keep an eye on :
- ABBN SW : ABB Expects 2Q Orders, Revenues to Decline in All Businesses
- AIR FP : Airbus Furloughs Staff at U.K. Site in Bid to Stem Cash Drain
- AKA NO : Akastor First Quarter Ebitda NOK137 Mln
- CAP FP : Capgemini to Hold Shareholders Meeting Behind Closed Doors
- CO FP : Casino’s Naouri To Have Pay For April, May Cut by 25%
- CMBN SW : Cembra Money Bank Suspends 2020 Views, 1Q Net ‘Above’ Budget
- COM GY : Comdirect Sees Full Year Pretax EU130 Mln to EU150 Mln
- CON GY : Continental AG 1Q Adjusted Ebit Margin 4.4% Vs. 8.10% Y/y
- DHER GY : Delivery Hero Orders Jump 92% as Lockdown Boosts Food Delivery
- ENEL IM : Enel 1Q Installed Capacity -1.8% to 88.3GW
- ERA FP : Eramet First Quarter Sales EU774 Mln
- RF FP : Eurazeo Scraps Div. for 2019; Fundraising Slows Since Mid-March
- ERF FP : Eurofins Keeps 2020 Objectives, Won’t Propose Dividend
- GSC1 GY : Gesco 1Q Net, Orders Drop, FY Outlook Impacted by Pandemic
- WL6 GY : Heidelberg Pharma to Offer Up to 2.82m Shares via MainFirst Bank, Heidelberg Pharma Raises EU14.4m From Placement
- IAG LN : *SPAIN READIES FINANCIAL AID FOR IAG'S IBERIA, EL PAIS REPORTS
- IMMO BB : Immobel Maintains Dividend, Signs 14,200 Sq.-Mtr Lease With ING
- KEMIRA FH : Kemira Oyj First Quarter Oper Ebitda EU108.5 Mln, +13% Y/y
- KEMIRA FH : Kemira Withdraws Outlook for 2020 on Covid-19, Oil-Price Decline
- KGX GY : Kion 1Q Adjusted Ebit EU144.0 Mln, -21% Y/y, Est. EU159.0 Mln
- LHA GY : Lufthansa’s Swiss to Get CHF1.5b State-Backed Bank Loan: T-A
- MLP GY : MLP SE Updates Forecast for Year 2020
- EGL PL : Mota-Engil Consortium Signs $365m Contract in Mozambique
- NCCB SS : NCC 1Q Net Sales SEK11.77 Bln, +2.9% Y/y, Est. SEK12.38 Bln
- NOKIA FH : Nokia to Deploy About 300,000 Radio Units for Bharti Airtel
- NOVN SW : Novartis First Quarter Core EPS $1.56
- OKEA NO : OKEA First Quarter Ebitda NOK312 Mln, +38% Q/q
- PHO NO : PhotoCure to Offer Up to 2.18m Shrs to Trade On April 28
- WAF GY : Siltronic First Quarter Ebitda EU84.2 Mln, -34% Y/y
- SKAB SS : Skanska 1Q Revenue SEK41.2 Bln, +17% Y/y, Est. SEK38.51 Bln
- SY1 GY : Symrise 1Q Sales EU917.1 Mln, +8% Y/y, Est. EU938.3 Mln
- SBS GY : Stratec Will Replace RIB Software in Germany’s SDAX Index
- TEL NO : Telenor 1Q Ebitda NOK13.80 Bln, +13% Y/y, Est. NOK13.61 Bln (1)
- HO FP : Thales Sees ‘Very Significant’ Impact on 2Q, 1H
- TIETO FH : TietoEVRY First Quarter Adj. Oper Profit EU78.2 Mln
- TKO FP : Tikehau Capital Hires NAB’s Neil Parekh to Head Asia Expansion
- WIHL SS : Wihlborgs First Quarter Rental Income SEK781 Mln, +8.8% Y/y
- WDI GY : *Wirecard: No Significant Findings in Audit Areas That Would Require Adjustment of 2016-2018 Accounts
- WLN FP : SIX: Worldline Shares Placed at EU61.2 Per Share

>>> Europe : Brokers Upgrades & Downgrades - 258th of April 2020

>>> Up
* Borregaard Raised to Buy at SEB Equities; PT 115 kroner
* EnQuest Raised to Hold at Jefferies; PT 11 pence
* Go-Ahead Raised to Buy at Jefferies; PT 1,710 pence
* IG Group PT Raised to 910 pence from 770 pence at Peel Hunt
* Loomis Raised to Buy at SEB Equities; PT 290 kronor
* Royal Mail Raised to Buy at Citi; PT 210 pence
* Stagecoach Raised to Buy at Jefferies; PT 85 pence
* Swissquote Raised to Buy at AlphaValue
* Wm Morrison Supermarkets Raised to Buy at Berenberg

>>> Down
* Accor Cut to Sell at MainFirst; PT 20 euros
* Aker Cut to Sell at Handelsbanken; PT 220 kroner
* Aker Solutions Cut to Sell at SpareBank; PT 3.50 kroner
* Aker BP Cut to Sell at Handelsbanken; PT 140 kroner
* Aker BP Cut to Hold at Jefferies
* Equinor Cut to Sell at Handelsbanken; PT 120 kroner
* Ferrari Cut to Underperform at Jefferies; PT $108
* Husqvarna Cut to Hold at Berenberg; PT 60 kronor
* InterContinental Hotels Cut to Hold at MainFirst
* Intl Petroleum Cut to Hold at Jefferies; PT 15 kronor
* Kvaerner Cut to Hold at Arctic Securities; PT 8 kroner
* Lundin Energy Cut to Hold at Jefferies; PT 234 kronor
* Norway Royal Salmon Cut to Hold at DNB Markets; PT 190 kroner
* Paradox Interactive Cut to Sell at SEB Equities; PT 155 kronor
* Sainsbury Cut to Sell at Berenberg; PT 170 pence
* Sixt Cut to Hold at Commerzbank; PT 47 euros
* Software AG Cut to Equal-Weight at Morgan Stanley; PT 28 euros

>>> Initiation
* Ambu Rated New Buy at Berenberg; PT 291 kroner
* Cairn Energy Resumed Underperform at Jefferies; PT 85 pence
* Cosmo Rated New Buy at Research Partners; PT 87.50 Swiss francs
* Wizz Air Reinstated Buy at Goldman; PT 3,410 pence

>>> Call
* Ambu Earnings Potential Leads Berenberg to Initiate at Buy
* Kuehne + Nagel’s 2Q Likely to Be Very Painful: Berenberg
* Sainsbury Cut, Grocers’ Bank Exposure Overlooked: Berenberg
* Software AG Upside Now Limited Following Rally: Morgan Stanley
* Jefferies Bullish on U.K. Buses, Raises Stagecoach and Go-Ahead