After Hours Summary: VRNT -11.6%, BB -9% are weak on earningsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: PUMP +1.8%, GVA +0.1%
Companies trading higher in after hours in reaction to news: IFRX +75.4% (doses first patient in trial investigating IFX-1 in patients with severe COVID-19-induced pneumonia), VEL +10.7% (files to delay its 10-K), NVAX +9.7% (signs NanoFlu manufacturing agreement with EBS), OII +6.5% (confirms Q1 guidance but is withdrawing its full-year 2020 guidance), VECO +3.8% (reports prelim Q1 revs in-line with consensus), TWO +3.2% (details additional risk factors in 10-K), CMTL +2.4% (provides COVID-19 update; withdraws outlook), SGMS +2.1% (signs new 4-year deal with LOTTO Bayern in Germany), SKT +1.9% (withdraws 2020 guidance), SIX +1.9% (adopts short-term stockholder rights plan), BDX +1.1% (launch of rapid serology test for detection of COVID-19 exposure), AKR +0.5% (withdraws FY20 guidance)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: PAYS -20% (postpones earnings call), VRNT -11.6%, BB -9%
Companies trading lower in after hours in reaction to news: XRX -3% (Xerox withdraws its offer to acquire HPQ), DK -2.2% (to dropdown logistics assets to DKL), AGNC -1.9% (believes that the worst is behind it for its Agency MBS portfolio), HPQ -1.8% (Xerox withdraws its offer to acquire HPQ), MMM -1.2% (provides details about capacity increases of N95 respirators), GIII -1% (announces employee furloughs), MTCH -0.9% (says it's seeing fewer new users joining; also co has delayed several product feature and press launches), NOC -0.7% (files mixed securities shelf offering)
Closing Stock Market SummaryThe stock market ended the tumultuous first quarter in negative territory on Tuesday, while investors continued to assess the latest news on the coronavirus and the policies proposed to address its impact. The S&P 500 closed near session lows with a 1.6% decline after a brief stay in positive territory early in the session.
The Dow Jones Industrial Average lost 1.8%, the Nasdaq Composite lost 1.0%, and the Russell 2000 lost 0.5%.
Notably, President Trump said a $2 trillion infrastructure bill should be included in the fourth part of a stimulus bill with U.S. interest rates near zero. Prior to the statement, Bloomberg reported that White House officials were looking into a $600 billion relief bill for mortgage markets, the travel industry, and state governments.
There was another story from a Bloomberg reporter that President Trump approved a proposal pushed for by some businesses to delay payment of certain tariffs by 90 days. An announcement could come as soon as this week. Market reaction was muted, although shares of Caterpillar (CAT 116.04, +4.33, +3.9%) likely benefited from the president's infrastructure proposal.
Instead, quarter-end rebalancing contributed to the outperformance of the distressed energy sector (+1.6%) and, conversely, the sharp declines in the defensive-oriented utilities (-4.0%) and real estate (-3.3%) sectors.
On the coronavirus front, NIAID Director Dr. Fauci said there have been "glimmers of hope" that social distancing is helping to curtail the spread of COVID-19, but the situation remained dire with the number of infections continuing to rise in the U.S. On a related note, Texas Governor Abbott issued a "stay at home" order until May 4.
Separately, the Fed established a repurchase agreement facility as an alternative source for foreign central banks to temporarily exchange their U.S. Treasury securities for U.S. dollars. This was simply the latest "whatever it takes" action by the Fed to support financial markets.
U.S. Treasuries had a relatively quiet day, ultimately closing mixed and little changed. The 2-yr yield declined one basis point to 0.20%, while the 10-yr yield increased three basis points to 0.70%. The U.S. Dollar Index declined 0.2% to 98.99. WTI crude increased 1.5% to $20.52/bbl, although it was up more than 8% in the session.
Reviewing Tuesday's economic data:
- The Conference Board's Consumer Confidence Index for March dropped to 120.0 (consensus 110.0) from an upwardly revised 132.6 (from 130.7) for February. The March reading is the lowest since July 2017.
- The key takeaway from the report is that the downturn was not as bad as feared; however, the prevailing expectation is that consumer confidence will get much worse due to the impact of the coronavirus and its effect on consumer attitudes about job security and income growth prospects.
- The Chicago PMI decreased to 47.8 in March (consensus 40.0) from 49.0 in February.
- The S&P Case-Shiller Home Price Index for January increased 3.1% following an upwardly revised 2.8% increase in December (from +2.9%).
Looking ahead, investors will receive the ISM Manufacturing Index for March, the ADP Employment Change Report for March, Construction Spending for February, the weekly MBA Mortgage Applications Index, and auto and truck sales for March on Wednesday.
- Nasdaq Composite: -14.2%
- S&P 500: -20.0%
- Dow Jones Industrial Average: -23.2%
- Russell 2000: -31.0%
French companies join forces to make 10,000 ventilators in 50 days
Consortium led by Air Liquide will help ramp up production of critical medical kit
Some of France’s largest companies have joined forces to try to produce 10,000 ventilators in 50 days as President Emmanuel Macron promises to ramp up the production of critical medical equipment to treat coronavirus.
The initiative comes amid a global rush to provide life-saving machines, overwhelming established medical device makers with orders, often at multiples of their normal output.
Mr Macron announced the plan on Tuesday during a visit to a medical-mask factory in the west of the country, where he also said the country was on course to increase the production of masks to 15m a week by the end of April.
“The days to come will not look like the days that have gone before. We must rebuild our national and European sovereignty,” he said.
As part of that push, a consortium led by industrial gas specialist Air Liquide, which is also the only French producer of ventilators, is to “study the possibility” of providing 10,000 respirators by mid-May.
France’s attempts to produce more of the life-saving devices follows other nations that have urged domestic industry to rise to the challenge of plugging the shortage.
In the US, Ford this week said it would produce 50,000 ventilators over the next 100 days in collaboration with General Electric’s healthcare unit. GM is working with another ventilator maker to supply 10,000 a month.
Both carmakers had been criticised by President Donald Trump for not acting more quickly.
The UK has committed to purchase at least 40,000 new ventilators — a mixture of established models and others designed from scratch by companies such as Dyson.
A small research and development consultancy, Science Group, joined the list on Tuesday when it revealed it was in talks with officials to supply a batch of 10,000 machines.
France has recorded 3,523 deaths in hospitals from the coronavirus and has 5,565 people in intensive care. It had only about 5,000 intensive care beds equipped with ventilators at the start of the crisis.
It has increased that to close to 8,000 and plans a further increase to more than 14,000 in the weeks ahead.
The French ventilator consortium, which includes software company Schneider Electric, carmaker PSA and parts maker Valeo, will use close to 100 suppliers to provide the 300 components for the ventilators.
Air Liquide has said the ventilators will be provided at cost price with the state adding €4bn into its health budget to help with purchases of the ventilators and masks.
The groups join a growing number of big-name manufacturers whose factory lines have halted because of the pandemic that are trying to find ways to plug the ventilator shortage, in efforts reminiscent of a wartime economic push.
Alongside scaling up production, initiatives under way include modifications to existing designs and the creation of new models that can be rapidly churned out.
However, figures in the medical devices sector have cast doubt on whether companies with no experience in the field will be able to deliver the equipment on time for the expected peaks in infections.
Ventilators are highly regulated and must normally go through stringent safety tests, with the manufacturers required to hold special certification. In response to the urgent need, regulators in countries such as Britain and the US have indicated they will relax the normal processes.
Another potential bottleneck is the supply of components and raw materials. One of the top ventilator makers, Germany’s Drägerwerk, has warned global demand will outstrip supply and that its international supply chains “must not be interrupted under any circumstances”.