With 160 coronavirus vaccine candidates under development around the world, it’s not surprising that we would get reports on three successful, if very early, trials today.
On Wednesday, September 23, shares of Albemarle (ALB) and SQM (SQM), the two dominant lithium producers in the world, fell 11.56% and 11.82%, respectively, on an announcement at Tesla’s (TSLA) Battery Day that the electric car maker would start its own lithium mining operation in an effort to drive down battery costs. (The company also announced that it is developing a new battery technology that would reduce the amount of lithium used in a rechargeable battery.) Getting the price of a battery down by reducing costs and/or improving energy density is the key to making an electric car economically competitive–without subsidies–with a fossil-fuel vehicle. On Thursday, September 24, however, Albemarle shares closed up 3.59% and SQM gained 2.73% in a generally lackluster market. Why the difference?
Stocks rally today–but I’d feel better if volume was higher and the same old big techs weren’t leading the day
Here’s a quote from Bloomberg today that deserves your attention: “If I were to be unsure about a stimulus package, unsure about whether there will be a vaccine, there’s no better thing than to hide out in the megacap tech stocks because they work in an economy-closed scenario,” Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management, told Bloomberg. In other words the big cash flowing into the Apples, Amazons, and Microsofts of the market is looking to hedge against risks in the economic, coronavirus, and political realms. And that the buying of shares of the big tech companies is taking place against a background where we’re still in a correction (or near one depending on what sector or index you’re watching) and where many hedges against risk in the out months beyond November are very expensive.
This morning the Labor Department reported that another 870,000 workers filed new applications for state-run unemployment insurance for the week ended September 19. (That’s on a adjusted basis.) That compares to 866,000 initial claims in the prior week.
Another 630,000 people filed new claims for Pandemic Unemployment Assistance, the federal program for self-employed and gig workers.
Stocks moved up modestly this morning (modest considering the damage down in the last few days) with the Standard & Poor’s 500 up 0.99% at 1 p.m. New York time, the Dow Jones Industrial Average ahead 0.94%, and the NASDAQ Composite gaining 1.16%. The move seems to have been fueled by strong talk from Treasury Secretary Steve Mnuchin that he and House Speaker Nancy Pelosi would resume talks over the stalled (or dead as a doornail, if you prefer) next coronavirus stimulus bill that Federal Reserve chair Jerome Powell testified in Congress yesterday was so necessary to continuing the recovery from the coronavirus recession. Pelosi and the Democrats in the House add a smidgen to optimism to the stew by saying that they were starting work on a $2.4 trillion stimulus bill. I’d note that $2.4 trillion is a big step down from the original $3.4 trillion bill passed by the House. You might be inclined to call it compromise until you remembered that the initial Republican negotiating position was a $1 trillion package that was then scaled down to just $500 billion. By the afternoon, the stock market seems to have concluded that there wasn’t much there there in the morning’s “we’ll talk again” news.
With the Standard & Poor’s 500 falling 2.37% at the close and the NASDAQ 100 down 3.16% for the day, shares of Illumina (ILMN) climbed 1.67%. Yesterday and today the selling of Illumina looks to have exhausted itself.
At 1 p.m. New York time the Standard & Poor’s 500 was down 0.25%. At the close it was lower by 2.37% The pick up in selling was led by big tech stocks. Amazon (AMZN), for example was down 1.57% at 1 p.m. and 2.32% at the close. Microsoft was down 1.22% but finished the day down 1.54%. Technology stocks led early and late day selling. The NASDAQ 100 was down 0.39% at 1 p.m. and 3.16% at the close. The Technology Select Sector SPDR ETF was down 0.75% and closed down 1.35%. But the selling wasn’t limited to technology shares