U.S. markets and stock exchange traded funds pushed higher Friday after promising results from Gilead’s antiviral drug to treat Covid-19 helped alleviate concerns over rising coronavirus cases.
On Friday, the Invesco QQQ Trust (NASDAQ: QQQ) was up 0.1%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) rose 0.8%, and SPDR S&P 500 ETF (NYSEArca: SPY) gained 0.4%
Gilead’s remdesivir showed significantly improved clinical recovery rates and diminished the risk of death in COVID-19 patients, Reuters reports.
“This market is psychologically focused on coronavirus news, and it’s a battle of positive news stories versus negative news stories,” Mike Zigmont, head of trading and research at Harvest Volatility Management, told Reuters.
The positive news on a Covid-19 vaccine helped investors brush off another spike in coronavirus cases. The United States suffered the largest single-day increase in new infections globally for the second consecutive day on Thursday. Consequently, several states have already reinstated shutdown measures and rolled back plans on reopening.
“At some stage, you accept the reality that Covid hasn’t gone away, that it’s going to have an impact on all economies in terms of social distancing until we have a vaccine,” Brian O’Reilly, Head of Market Strategy for Mediolanum International Funds, told the Wall Street Journal.
The markets have been resilient and traded within range for most of the past month as improving economic data and robust stimulus measures helped fuel a broad market rally.
“The market is still largely addicted to stimulus,” Scott Martin, Chief Investment Officer of Kingsview Wealth Management, told the WSJ. “Markets are able to take the coronavirus news in stride because of this backstop.”
Investors are now looking toward next week as Corporate America kicks off the earnings season. However, many do not expect anything noteworthy as overall profits for S&P 500 firms are largely anticipated to plunge the most since the financial crisis.
“With the earnings expectations so low, investors are of the mindset that they will more likely be exceeded rather than fall even further,” Sam Stovall, chief investment strategist at CFRA Research, told Reuters.
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