Monday June 1, 2020.
As Riots Rage, Investors Bet on Reopening
Despite ongoing protests following the death of George Floyd while in custody of Minneapolis Police Officers on May 25th, the markets trended up today with investors seemingly focused on hopes that major cities would be reopening soon. Last week New York Governor Andrew Cuomo announced that New York City will see the first phase of reopening on June 8, which will allow for 400,000 wholesale, construction, manufacturing, curbside retail workers, and dentists to return to work.
As unrest continues around the country, Governor Cuomo also announced a curfew for NYC that will be in effect from 11pm to 5am and that police presence on city streets would be doubled from 4000 to 8000.
Not everyone in the finance world was feeling quite so optimistic about the reopenings. “The timing could not have been worse. All of a sudden we have 90% of the population in the U.S. in a phase back state, and now you are trying to reopen the small businesses and the social unrest really derails the economic recovery,” said Deutsche Bank Wealth Management Americas CIO Deepak Puri on Yahoo’s The First Trade, adding a cautious note to clients. “Cash has taken a more bigger and prominent role in your asset allocation, no doubt about that,” Puri said. “I think people realized that even though it’s not to generate much of a return, the safety aspect of return on your principles has at times over the last three months taken precedence over a return on capital.”
All That Glitters is Not GILD
Gilead Sciences (GILD: US) shares dropped today as their Phase 3 trial of the antiviral drug remdesivir showed mixed results in efficacy against moderate COVID-19 cases. According to Bloomberg, one group in the trial showed “modest improvement” with a five-day regimen compared to a control, while a group on a 10-day regimen showed no statistically significant improvement at all. GILD, which is up 16% this year largely on speculation surrounding remdesivir’s potential as a COVID-19 treatment, slipped in morning trading, eventually closing down over 3%.
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