MARKETS
COVID-19
Moderna and National Institutes of Health Roll out First Phase 3 for Coronavirus Vaccine
On Monday, the biotech company Moderna and National Institutes of Health started the first phase 3 clinical trial for the coronavirus vaccine and is expecting to enroll 30,000 adult volunteers. The trial will evaluate the safety of the vaccine and whether it can prevent symptomatic Covid-19 after two doses. From phase 1, the results showed that it induced immune responses in all of the volunteers and was generally safe with mild side effects such as chill, muscle pain, and fatigue. In phase 2, the study expanded to people with the same characteristics from phase 1. The vaccine is one of 25 in clinical trials all around the world, and the biotech company received $472 million from the Biomedical Advanced Research and Development Authority for Phase 3 study and development.
CURRENCY
Drop in the Dollar as Gold Rises
The U.S. dollar index is down 9% from its March highs and down 3% year to date; making it on track for its worst month since 2011. Due to the dollar’s global hegemony, the selloff in the greenback could lead a broad market rally driven by expectations of continued economic stimulus from the world’s central banks and governments. A weaker dollar makes U.S. exports more competitive abroad and helps U.S. multinational companies in minimizing the cost of converting profits made in other currencies. The dollar’s value has taken in factors like the change in M1 money stock of the U.S. and real yields. Generally, developed economies such as Europe and Japan have been more dovish approaching improvements in the economy using central bank policies in the midst of a pandemic, but the U.S. Federal Reserve has been the most aggressive.
(Source: Federal Reserve Economic Data)
We can observe that all of the countries have seen their M1 money supply rise considerably through the crisis, but U.S. has increased its supply far more. This is because of the extreme increase in deficit spending, which has unintentionally caused the U.S. personal savings rate to reach an equally extreme level. If U.S. policymakers pass another aggressive stimulus package, it will most likely help market/economic liquidity but also catalyze another major leg lower for the dollar. This can lead to a bearish U.S. dollar, bonds, and equities and result in a spike in inflation.
SPACE
Mars 2020/Perseverance
(Source: NASA Mars 2020 Fact Sheet)
On Thursday, NASA launched a rover to Mars to seek signs of ancient life through collecting rocks and soil samples. The rover will land on February 18, 2021 and spend 687 Earths days on the planet. The Perseverance rover is equipped with an autopilot feature avoiding hazards, 23 cameras, 13 onboard computers, and can move about 220 yards per day. This will be the third Mars mission of the summer as China and the United Arab Emirates have independently launched voyages earlier this month. The 2,200-pound Perseverance rover and mission costed NASA around $2.70 billion, and the company is looking forward to what they can find on the Red Planet.
PHARMA
Photography Company Kodak, Receives Donation from Trump to Manufacture Pharmaceutical Ingredients
On Tuesday, the Trump Administration gave Eastman Kodak a $765 million loan to manufacture pharmaceutical ingredients at company plants in New York and Minnesota. From filing for bankruptcy in 2012 to emerging into the cryptocurrency business, Kodak today is switching gears again to create chemicals for pharmaceutical drugs. The administration is trying to find ways to rebuild the national stockpile of medical supplies depleted by the pandemic, using U.S. manufacturing plants to reduce reliance on foreign factories (particularly China). Kodak is estimated to manufacture a quarter of active ingredients needed in the U.S. and creating 350 jobs. Shares of Eastman Kodak Co. have leapt 2,441% higher this week with its market valuation reaching nearly $2 billion. Shares tripled on Tuesday from $2.62 to a high of $11.19, and finished off the week at $22.16 per share.
SOCIAL MEDIA
Long Live TikTok
Yes, it’s true TikTok is going to be banned from the United States. Under either an executive order or the International Economic Powers Act, Trump will ban the app that had the best quarter for any app in Q1. The app has up to 80 million active monthly users in the U.S. and ByteDance –TikTok’s owner– has valued the app at $50 billion. Trump’s announcement followed negotiations on Friday between the White House, ByteDance and potential buyers of TikTok, including Microsoft Corp. They failed to produce a deal that would result in shedding the app’s U.S. operations, but the talks are expected to continue. The ban is rooted from China and U.S. tensions as U.S. government officials say the app presents a national security risk.
Written By: Sarah Lee
Works Cited
Schwartz, Harrison. “The End To U.S. Dollar Hegemony Has Arrived.” Seeking Alpha, 28 July 2020. seekingalpha.com, https://seekingalpha.com/article/4361350-end-to-u-s-dollar-hegemony-arrived.
“King Dollar’s Decline Ripples across the Globe.” Reuters, 28 July 2020. www.reuters.com, https://www.reuters.com/article/us-health-coronavirus-dollar-analysis-idUSKCN24T1G5.
NASA to Launch Its Most Ambitious Mars Rover Yet - WSJ. https://www.wsj.com/articles/nasa-to-launch-its-most-ambitious-mars-rover-yet-11596027106?utm_source=morning_brew. Accessed 31 July 2020.
Roose, Kevin. “Kodak’s Dubious Cryptocurrency Gamble.” The New York Times, 30 Jan. 2018. NYTimes.com, https://www.nytimes.com/2018/01/30/technology/kodak-blockchain-bitcoin.html.
“Trump Gives Medical Stockpile A ‘Kodak Moment’ With New Loan To Make Drugs.” NPR.Org. www.npr.org, https://www.npr.org/sections/coronavirus-live-updates/2020/07/28/896209016/trump-gives-medical-stockpile-a-kodak-moment-with-new-loan-to-make-drugs. Accessed 1 Aug. 2020.
“Trump Says Will Ban TikTok amid Pressure on Chinese Owner to Sell.” Reuters, 1 Aug. 2020. www.reuters.com, https://www.reuters.com/article/us-usa-tiktok-bytedance-idUSKCN24W2PN.
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