Virtually all members of the House of Representatives were wearing masks or gloves, or masks and gloves to come back to Washington to vote on the $484 billion Coronavirus relief bill that the Senate already passed. The only one who wasn’t wearing a mask or gloves, was House Speaker Nancy Pelosi. Is she immune or vain? One can only speculate…
The Republican-led Senate passed the legislation on Tuesday, so approval by the House will send it to the White House, where President Donald Trump has promised to sign it into law. The passing of this legislation will bring the total of funds approved for the crisis to nearly $3 trillion. It’s expected to pass with solid bipartisan support in the Democratic-led House, but opposition by some members of both parties forced legislators to return to Washington despite stay-at-home orders.
The bill — which would be the fourth passed to address the crisis — provides funds to small businesses and hospitals struggling with the economic toll of a pandemic. Some Democrats are unhappy that the latest bill omits financial help for state and local governments reeling from the impact of lost revenue. Some Republicans are unhappy that so much government spending has been approved so quickly. The President supports more funding for states but Republicans refused to include it in the current relief package. Unfortunately, the $484 billion bill passed by the Senate does not include provisions for additional stimulus checks for individuals.
This bill focused on replenishing the Paycheck Protection Program (PPP), which offers guarantees of forgivable loans to small business if the majority of the money is used to retain employees. The initial PPP funding from the CARES Act ran out quickly.
This bill includes $320 billion to replenish the Paycheck Protection Program,$60 billion for the Small Business Administration’s disaster relief fund, $75 billion for hospitals, and $25 billion for coronavirus testing.
Hedge funds Long AbbVie Inc (NYSE:ABBV)
At Q4’s end, a total of 71 of the hedge funds tracked by Insider Monkey were AbbVie Inc (NYSE:ABBV), a change of 4% from the third quarter of 2019. On the other hand, there were a total of 46 hedge funds with a bullish position in ABBV a year ago.
In the midst of this COVID-19 pandemic, it’s very easy to ignore pharmaceutical companies that are not directly involved in a vaccine or a cure foe the novel coronavirus. AbbVie and J&J (NYSE: JNJ) announced that the FDA has approved a label expansion of their key blood cancer drug, Imbruvica (ibrutinib) in combination with Roche RHHBY/Biogen’s BIIB multi-disease drug, Rituxan (rituximab). The drug, in combination with Rituxan, is now approved for the first-line treatment of adult patients (70 years or younger) with chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL).This is the 11th FDA approval for Imbruvica and sixth in CLL, the most common form of leukemia in adults.
What the hell does all of that mean? Well, they are getting a suite of treatments approved for blood cancers which means cash flow, and once a winner in the COVID-19 vaccine race is revealed, investors will be looking for cash flow. Hedge funds are ahead of the game with AbbVie.
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More Pharma
Bad news according to the summary of study results on Remdesivir, that were accidentally posted to the World Health Organization website and seen by STATnews.com on Thursday. Accoridng to the results, antiviral medicine remdesivir from Gilead Sciences (NASDAQ: GILD) failed to speed the improvement of patients with Covid-19 or prevent them from dying. The long-awaited clinical trial was conducted in China. Gilead, however, said the data suggest a “potential benefit.” It was quickly removed from the WHO site.
“A draft document was provided by the authors to WHO and inadvertently posted on the website and taken down as soon as the mistake was noticed. The manuscript is undergoing peer review and we are waiting for a final version before WHO comments,” said WHO spokesperson Tarik Jasarevic.
Gilead spokesperson Amy Flood said the company position is “the post included inappropriate characterization of the study.” Because the study was stopped early because it had too few patients, she said, it cannot “enable statistically meaningful conclusions.” However, she said, “trends in the data suggest a potential benefit for remdesivir, particularly among patients treated early in disease.” Those quotes are also according to STATnews.com.
The stock of Gillead intially fell almost 8.5% on the news, which was a give back of almost all the gain picked up after STATnews reported leaed good results from the University of Chicago studdy on the same drug, Remdesivir. If you ask me, I’ll take Chicago over China any day. GILD pullback is an opportunity.
Nat Gas could Be a Buy
The volatility in Natural Gas Futures prices (technically known as Henry Hub futures) might concern investors. However, if you wanted to be long NG, you could look for natural gas-weighted stocks like EQT (NYSE:EQT) and Cabot Oil & Gas (NYSE:COG).
So far in 2020, EQT and Cabot Oil & Gas have risen 42.8% and 20.8%, while the Energy Select Sector SPDR Fund (NYSEARCA:XLE) has fallen 46.2%. The companies have also outperformed the S&P 500 Index’s (NYSEARCA:SPY) 15.3% decline this year. Among the 16 analysts tracking EQT, 63% recommend a “strong-buy” or “buy,” 31% recommend a “hold,” and 6% recommend a “sell” based on Reuters data. EQT’s mean target price for the next year is around $11.68. On Tuesday, EQT closed at $15.57.
There are a lot of fundamental reasons to like natural gas. One is supply; natural gas is a byproduct of shale oil drilling and as shale oil drilling gets cut back by the falling price of crude oil, natural gas supplies will tighten. They have been in surplus for most of the last two years.
Also, when looking at commodities you need to look at seasonality and natural gas has two very strong seasonal periods coming up: late-April to early-May, and late-May through mid-June.
Most people reading this should look to take a position in the stocks, not the ETF or the Futures, but the futures will be critical for both stocks. If prices move up in the futures market, it will be a nice tail wing for EQT and COG.
Sheep at McDonalds
When the cats away the mice will play, and when all the humans are on lockdown the animal kingdom will come to rule once more. There have been sightings of sheep, goats, kangaroos and even lions hanging out in areas they normally would not dare tread.
Since there’s no one around to shoe the animals away, they’re taking full advantage of their newfound freedom. Roaming through streets normally very populated. In Wales, a group of sheep decided to get their munch on at a local McDonald’s. I could be said that people that eat at McDonald’s are like sheep.
Seems we’re not the only ones going through Mickey D withdrawals.