Stocks Spike On April 16 In Hopes Of COVID-19 Treatment

Thursday Night Futures Spike

Let’s start with the most important latest news. The futures market exploded to the upside. Stat News came out with a report that the early signs of the drug remdesivir seem to be positive. Obviously, if a drug that treats COVID-19 comes out, people can go back to their normal lives. The article states, “The University of Chicago Medicine recruited 125 people with COVID-19 into Gilead’s two Phase 3 clinical trials. Of those people, 113 had severe disease. All the patients have been treated with daily infusions of remdesivir.” 

Kathleen Mullane of the University of Chicago stated, “The best news is that most of our patients have already been discharged, which is great. We’ve only had two patients perish.” The results of this trial will come out in a week. Every day we get more data on treatments and vaccines. That’s the opposite of March, when every day we would get news of another event or government closing.

Obviously, we all want this treatment to work because this about saving lives, not making money in markets. However, Gilead Sciences (GILD) stock was up 16.41% after hours on this news. Personally, I’m not a fan of chasing stocks that do well in this pandemic like Zoom (ZM), Netflix (NFLX), or Amazon (AMZN). It's better to just buy the stocks that sold off, since this situation won’t last longer than a few more months. 

President Trump came out with a plan to reopen the parts of the country that weren’t hit hard by the virus. That also helped stocks in the after-hours session. As of Thursday evening, April 16, the S&P 500 mini futures index was up 74.75 points, and the Dow mini was up 714 points.

Amazon On A Rampage

Obviously, Amazon isn’t just a stay at home play. It has a burgeoning advertising business and dominates the cloud. It is a PAAS (Platform As A Service) play. Microsoft’s (MSFT) Azure is catching up though. Amazon stock is way too high in my opinion. In terms of its valuation, it is fairly valued as Morningstar (MORN) has a price target of $2,400 which is $8.19 below its current price. A main issue is its parabolic rise. These names are very tough to short because you can lose money quickly if you are wrong by a day. 

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