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As of 1 p.m. New York time today, May 18, the Standard & Poor’s 500 is up 3.17% and the Dow Jones Industrial Average is higher by 3.60%. The NASDAQ Composite has climbed 2.47% and the Russell 2000 small cap index is ahead 5.29%. The iShares Emerging Markets ETF (EEM) has gained 3.75%.

First, there’s news out of Moderna (MRNA) that an early test of the company’s coronavirus vaccine demonstrated safety and “test-tube” efficacy. That is the vaccine generated antibodies in injected volunteers that were similar to those found in real life recovered coronavirus cases and that in a test tube those antibodies successfully prevented the virus from replicating. Lots of caveats, obviously–the test involved just 8 volunteers in its last stage, test tube efficacy is not the same as in body efficacy, and the jury is still out–it’s doing research–on whether antibodies confer immunity to the virus and for how long. But none the less this is encouraging news for everybody who is hoping that the world can declare that the pandemic is over sometime soonish. The next Phase 2 trial is a test on 600 volunteers and will begin, the company said today, shortly. Shares of Modern gained 25.66% today and are now up 327% for 2020 to date.  Former GlaxoSmithKline executive Moncef Slaoui, who is set to become the chief scientist for Operation Warp Speed, the White House program to speed up effort vaccine development, has been a board member at Moderna since 2017. He will leave the Moderna board once he moves into that slot at Operation Warp Speed. Slaoui owns 156,000 Modern stock options. “Interesting” because Slaoui will be involved in selecting which vaccine trails get government backing.

Second, this week the market likes what it’s hearing from Federal Reserve chair Jerome Powell. Last week it was disappointed with very similar remarks. Powell said in a “60 Minutes” interview on Sunday that the Federal Reserve is by no means out of ammunition use against volatility in the financial markets and that he sees no reason that the economy couldn’t begin a recovery in the second half of 2020–if there isn’t a second wave of coronavirus cases following recent efforts to -re-open the economy.
And, third, and finally, oil prices are up strongly–with West Texas Intermediate–higher by 7.95% as of 1 p.m. New York time–on reports of declining inventories and an easing of the shortage of crude oil storage capacity.

Today’s rally has the shape of recent rallies on a speedy economic recovery and a belief that April-May and the second quarter will mark the bottom for the economy and will be followed by strong growth in the third and fourth quarters.

“Recovery-sensitive stocks” were strongly higher. Shares of Spirit Air (SAVE) were up 25.72% as of 1 p.m. Shares of Carnival (CCL) were higher by 15.96%. Bank stocks were higher too with Wells Fargo (WFC) and JPMorgan Chase (JPM) gaining 8.37% and 4.60%, respectively.