Morning Minutes 10/5/2020

Morning Minutes

Stocks Bounce Back with Biotech and Theatre Stocks In Focus

October 5, 2020

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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

The new trading week is off to a positive start for stocks and commodities as concerns over President Trump’s health have faded amid signs his health has stabilized or improved including a drive around appearance yesterday, a resumption of his tweeting, and talk that he could be released from hospital as early as today. Indications that the parties in Congress continue to inch toward a deal in US fiscal stimulus also may be helping sentiment today.

US index futures are up 0.6% to 0.8% this morning. Dow futures have erased all of Friday’s losses, but the NASDAQ has farther to go to recoup Friday’s 2.2% plunge. Overseas, the FTSE is up 0.9%, the Dax is up 0.8%, the Nikkei and Hang Seng rose 1.2% and Sydney popped 2.2%.

Equity investors have turned their focus to the biotech sector this morning. Regeneron Pharmaceuticals is up 5.1% in premarket trading while Gilead Sciences is up 3.3% on reports that both of their COVID-19 products were used to treat President Trump over the weekend. It has also been a busy weekend for biotech mergers with Bristol Myers agreeing to purchase Myocardia for $13.1B, or $225 per share (compared with a $139.60 Friday close), and Eidos Therapeutics agreeing to merge with Bridge BioPharma.

On the other hand, movie theatre chains are under pressure with AMC Entertainment falling 6.6% premarket after the recent announcements of more major film delays to 2021 from the Marvel and James Bond franchises in the last few days pushed Cinemark to shut down its theatres in the US and UK once again. Canada’s Cineplex has not announced any changes or plans at the time of writing.

Energy commodities are on the rebound this morning today with WTI crude up 4.25%, Natural Gas up 4.5% and Gasoline up 4.6%. Metals are mixed today with Copper falling 1.3%, Gold steady just above $1,900/oz and Silver bouncing 0.5%.

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