JNJ Halts COVID Vaccine Trial Triggering A Selloff

Commenting on Johnson & Johnson halting its COVID vaccine trial and today’s trading Gorilla Trades strategist Ken Berman said:

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Johnson & Johnson Halts COVID Vaccine Trial

The major indices are mixed and flat at midday on the heels of a choppy morning session as U.S. stocks settled down following four bullish sessions in a row. Johnson & Johnson (JNJ, -2.1%) announced that halted its promising COVID vaccine trial due to an unexplained sickness affecting one patient, which triggered a selloff in the hardest-hit industries. Global risk assets got hit hard by the announcement and a gloomy German sentiment indicator, with European stocks and currencies, in particular, taking a nosedive, but domestic stocks have been holding up very well despite their recent lofty gains.

SpaceXD1 Capital Partners is having a strong year despite the COVID-19 pandemic. The firm’s main public portfolio gained 20.1% in August and is up more than 40% year to date despite the first-quarters selloff. In addition to the fund’s public investments, it has invested more than $4.5 billion in 27 different private companies since inception. Read More

The earnings season kicked off in pre-market trading, and all eyes were on the numbers of two banking giants, Citigroup (C, -3.9%) and JP Morgan (JPM, -1.3%). Both firms beat expectations on their top and bottom lines, but their shares turned sharply lower in early trading due to the negative COIVD headlines and the drop in European equities. On the other hand, JP Morgan’s surprisingly upbeat outlook for the corporate credit market is a reassuring sign concerning the domestic economy. The Consumer Price Index (CPI) and the core CPI also matched expectations in September, with both measures coming in at 0.2%, hinting at healthy trends in the consumer sector.

Market Wrap

Dow: 28,705, – 133 or 0.5%

S&P 500: 3,516 – 12 or 0.4%

Nasdaq: 11,926, + 50 or 0.4%

Russell 2000: 1,633, – 16 or 1.0%

Market breadth has been relatively weak this morning, with decliners outnumbering advancing issues by a 4-to-1 ratio on the NYSE at midday. Only 7 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 100 stocks hit new 52-week highs. The major indices have been hovering around their daily VWAPs (Volume-Weighted Average Price) throughout the morning session, pointing to a mixed and choppy afternoon. Cyclical issues have been showing relative weakness this morning due to the negative vaccine-related headlines, but while tech stocks have been inflows amid the return of the “lockdown trade”, the defensive healthcare and utilities sectors remained weak, which is a positive sign for bulls. Stay tuned!

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