Stocks continued to edge higher this week on better-than-expected initial earnings form the financial sector and encouraging news on the vaccine front. On Wednesday, the peer-reviewed New England Journal of Medicine published data showing the coronavirus vaccine developed by Moderna (MRNA) produced a “robust” immune response in all 45 patients in its early stage human trial (CNBC). Stocks with the greatest exposure to an economic reopening like airlines and cruises jumped following the report, while shares of Moderna (MRNA) surged more than 10%. Banks like JPMorgan (JPM) and Goldman Sachs (GS) saw trading revenues nearly double during the last quarter, helping to offset loan loss reserves tied to the coronavirus pandemic. On the other hand, the more retail focused Wells Fargo (WFC) reported a net loss of $2.4 billion for the quarter and is the only bank amongst the top six lenders in the U.S. that is being forced to cut its dividend following the annual Federal Reserve stress. On the economic front, U.S. industrial production came in better than anticipated notching an increase of 5.4% in June. For the first time since February, the June core CPI price index rose by more than expected, with year over year inflation sitting around 1.2%. Interest rates were relatively unchanged this week, with the yield on the 2-year and 10-year Treasury notes trading around 0.16% and 0.64% respectively mid-week.
Source: Morningstar, CNBC, Bloomberg, GSAM