Investors are watching earnings closely for a sense of how the largest American companies are weathering the health and economic crisis of coronavirus. Glenn Hutchins, North Island chairman and director at the New York Fed, joins “Squawk Box” to discuss the markets and the state of the U.S. economy.
Stocks jumped Wednesday on the back of positive data from a potential coronavirus treatment from Gilead Sciences, while investors digested a sharp drop in U.S. economic activity.
The Dow Jones Industrial Average surged 605 points, or 2.5%. The S&P 500 gained 2.9% while the Nasdaq Composite traded 3.5% higher.
A study of Gilead’s remdesivir drug conducted by the National Institute of Allergy and Infectious Diseases met its primary endpoint, the drugmaker said, lifting expectations for a potential coronavirus treatment. Gilead also released the results of its own study, which showed improvement in patients taking remdesivir to treat the virus. Gilead shares jumped 9.4% after a brief halt in the premarket.
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said remdesivir shows a “clear-cut” positive effect when treating the virus.
“Markets are going to move like this on this kind of news,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “If we had a vaccination, then I think you would see a very different economic recovery. If we have treatments, I think you’ll see a little bit quicker of an economic recovery.”
“We’ll take these days, but we’re not investing or changing any of our asset allocation because one day,” Horneman said.
Sentiment was also lifted as Alphabet shares gained 8.7% after the tech giant reported a revenue growth decline that was less steep than forecast. The company’s YouTube ad revenues also beat expectations.
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