Stocks end lower as Trump tells representatives to stop negotiating on stimulus
Stocks spent the morning searching for direction as progress on stimulus talks remained in the spotlight. However, President Trump decided that direction in the afternoon as he tweeted that he was calling off any further stimulus talks with Democrats until after the election. Prior to the president's declaration, Fed Chair Jerome Powell repeated in a speech that both monetary policy and fiscal policy are needed in order for the economic recovery to continue and "move faster."
ECONOMIC EVENTS: In the U.S., the trade deficit widened 5.9% to a 14-year high of $67.1B in August, in line with expectations. Exports rose 2.2% to $171.9B and imports were up 3.2% to $239.0B. The JOLTS report showed job openings fell 204,000 to 6.49M in August after rising in July.
The Federal Reserve released the text for a speech given by Chair Jerome Powell, which stated in part: "The recovery has progressed more quickly than generally expected... The expansion is still far from complete. At this early stage, I would argue that the risks of policy intervention are still asymmetric... Even if policy actions ultimately prove to be greater than needed, they will not go to waste. The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods."
In White House news, President Donald Trump said in a series of tweets that he is rejecting the Democrats' proposed $2.4T COVID-19 stimulus package and has instructed representatives to step negotiating until after the November election. Trump added that he asked Senate Majority Leader Mitch McConnell to instead focus "full time" on getting Amy Coney Barrett approved for the U.S. Supreme Court.
TOP NEWS: The FDA posted a briefing document for a "Vaccines and Related Biological Products Advisory Committee Meeting" to be held on October 22 regarding the development, authorization and licensure of vaccines to prevent COVID-19.
Afterward, Raymond James analyst Steven Seedhouse said he sees "two major details" that stand out. First, the briefing document makes clear that FDA provided instruction directly to individual sponsors that it would require a two month median follow-up for safety prior to an Emergency Use Authorization, which Seedhouse said "likely assures" there is no COVID-19 vaccine EUA consideration possible until around November 24-25 "at the earliest" for Pfizer (PFE) or Moderna (MRNA). Seedhouse also noted that the FDA said it will conduct a vaccine-specific AdCom prior to an EUA for any particular vaccine. Merck (MRK), BioNTech (BNTX), AstraZeneca (AZN), Johnson & Johnson (JNJ), Novavax (NVAX), Sanofi (SNY), GlaxoSmithKline (GSK) and Inovio (INO) are among the other companies working on COVID-19 vaccine candidates.
In other news on the search for tools to fight COVID-19, Vir Biotechnology (VIR) and GSK announced the global expansion to Phase 3 of the COMET-ICE study evaluating VIR-7831 for the early treatment of COVID-19 in patients who are at high risk of hospitalization. VIR-7831 is a fully human anti-SARS-CoV-2 monoclonal antibody, similar in some ways to the one Regeneron (REGN) recently provided for use by President Trump in his own fight against the novel coronavirus.
Boeing (BA) released its annual forecast for the commercial and defense aerospace market, which projects that the commercial aviation and services markets will "continue to face significant challenges due to the pandemic, while global defense and government services markets remain more stable." Boeing forecasts a total market value of $8.5 trillion over the next decade, which is down from $8.7 trillion a year ago due to the impact of the COVID-19 pandemic.
General Electric (GE) shares fell 3.7% after the company said that the SEC may bring a civil injunctive action against the company for possible violations of securities laws. GE said in a regulatory filing that it has been informed that the issues the SEC staff may recommend that the SEC pursue relate to the historical premium deficiency testing for GE Capital's run-off insurance operations, as well as GE's disclosures relating to such run-off insurance operations.
Meanwhile, Apple (AAPL) was in focus after it announced a new product event for October 13, at which it is expected to unveil a new line-up of iPhones, including its first 5G devices. The news comes a day after Bloomberg reported that Apple is no longer selling headphones and wireless speakers from competitors such as Sonos (SONO), Bose Corp., and Logitech (LOGI) as the tech giant prepares to launch its own new audio products.
Additionally, Bloomberg reported that Tesla (TSLA) is in discussions with BHP Group (BHP) on a nickel agreement as the car maker targets higher output and aims to avoid a supply crunch.
MAJOR MOVERS: Among the noteworthy gainers was Kiniksa Pharmaceuticals (KNSA), which rose 18.3% after it announced what the company called "positive data" from the global Phase 2 trial of mavrilimumab in giant cell arteritis. Also higher was Alteryx (AYX), which gained 28.2% after raising its Q3 revenue guidance and announcing that Mark Anderson will succeed Dean Stoecker as CEO.
Among the notable losers was Palomar (PLMR), which declined 19.1% after it estimated Q3 pretax catastrophe losses of $34M-$38M. Also lower were a number of airlines - including American Airlines (AAL), Delta Air Lines (DAL), JetBlue (JBLU), Southwest (LUV), and United Airlines (UAL) - after President Trump said he has instructed his representatives to stop negotiating on a stimulus bill until after the election.
INDEXES: The Dow fell 375.88, or 1.34%, to 27,772.76, the Nasdaq lost 177.88, or 1.57%, to 11,154.60, and the S&P 500 declined 47.66, or 1.40%, to 3,360.97.