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The U.S. stock market (Dow Jones Industrial Average) closed around 27940.47 Wednesday, jumped almost +1.60% (+440 points) as Trump may continue tariff China rather than real decoupling. In his epoch-making Labor Day speech Monday, Trump kept two options for China as punishment-complete decouple or tariffs. And Trump also pointed out that he has already applied the 2nd option (tariffs). Dow was also boosted by hopes of a mini-corona stimulus 4.0 by this week.
On early Wednesday, Dow Future recovered from Tuesday’s plunge as Trump will not decouple China, but stick to the tariffs strategy. Dow was also boosted by the better prospect of a Trump win in the Nov election as a Norwegian lawmaker nominates Trump for Nobel Peace Prize. As per the report, a Norwegian lawmaker has nominated Trump for the Nobel Peace Prize for 2021 for helping broker a deal between Israel and UAE, the second time he has put forward the U.S. president for the honor. The Norwegian lawmaker also lauded Trump for his efforts toward resolving protracted conflicts worldwide.
On early Asian Wednesday, Dow Future slips almost -300 points after AstraZeneca halted its COVID-19 vaccine 3rd stage trial owing to adverse development in one of its volunteers. There was a sense of gloom over the fate of the COVID-19 vaccine after AstraZeneca halted the Oxford COVID-19 vaccine (AZD1222) 3rd stage trial for a minimum of one week owing to adverse development in one of its volunteer (neurological problem). But on late Wednesday, there was a report that the affected volunteer improved quite significantly and may be released from the hospital soon.
AstraZeneca said in an official statement: We are working to expedite the review of the single event to minimize any potential impact on the trial timeline. This is a routine action that has to happen whenever there is a potentially unexplained illness in one of the trials, while it is investigated, ensuring we maintain the integrity of the trials. It is the second time that enrolment has been paused — in the first case, the person was found to have an illness unrelated to the vaccine.
Further, the AstraZeneca CEO said in an investor concall that the volunteer is a woman in the U.K., who experienced neurological symptoms consistent with a rare but serious spinal inflammatory disorder called transverse myelitis. The woman’s diagnosis has not been confirmed yet, but the participant is improving and will likely be discharged from the hospital as early as Wednesday. A vaccine that nobody wants to take is not very useful--- the company was taking the possible vaccine safety event seriously.
As a pointer, transverse myelitis is a serious condition involving inflammation of the spinal cord that can cause muscle weakness, paralysis, pain, and bladder problems. In rare cases, vaccines have triggered instances of transverse myelitis; although it can also be caused by other viral infections.
The director of the National Institutes of Health, Collins told a Senate panel on Wednesday: To have a clinical hold, as has been placed on AstraZeneca as of yesterday, because of a single serious adverse event is not at all unprecedented. This certainly happens in any large-scale trial where you have tens of thousands of people invested in taking part, some of them may get ill and you always have to try to figure out: Is that because of the vaccine, or were they going to get that illness anyway?
But on late Wednesday, Dow also slips over -250 points from the session high after a report that Trump seemed to downplay the severity of the coronavirus threat as he told a journalist in March that it was no worse than the flu. Trump said on 19th March that he deliberately underplayed the danger: I wanted to always play it down.
The market is increasingly concerned about Trump’s mishandling of COVID-19 coupled with some recent adverse comments about U.S. soldiers who died in combat ‘suckers’ and ‘losers’, and his unwillingness to challenge Putin over the alleged poisoning of Russian opposition leader Navalny or intelligence reports that Moscow offered bounties for the murder of U.S. military personnel in Afghanistan.
Also on Wednesday, it was reported that a senior Homeland Security official alleged White House official directed him to stop analyzing Russian efforts to tilt the 2020 election in favor of Trump, because it makes Trump ‘look bad’, and to downplay the threat posed by domestic white supremacist groups. This coupled with widespread riots across America (‘black lives matter’), the market is quite concerned about Trump’s re-election prospect. But Trump’s leadership appeal, Trumponomics, and Biden’s less impressive speech/body language, the Nov election will be a close contest, although the odds for Trump’s win is also increasing.
Technical Outlook: SPX-500, DJ-30, and NQ-100 (Futs): Updated 09/09/20
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