Britain’s blue-chip index has jumped back over 6,000 points, after biopharmaceutical company Gilead reported positive results for its remdesivir drug
- Latest: FTSE 100 jumps 2.6% to seven-week high
- Gilead reports remdesivir progress
- US GDP shows economy shrinking
- Coronavirus – latest updates
- See all our coronavirus coverage
Here’s our news story on today’s markets rally:
Fauci said he was told data from the trial showed a “clear cut positive effect in diminishing time to recover.”
“Fauci said patients taking the drug usually took 11 days to recover, compared to 15 days in the placebo group. He said the mortality benefit of remdesivir “has not yet reached statistical significance.”
As flagged earlier, Gilead said those tests showed that half the severely ill patients treated with remdesivir recovered and were released from hospital within two weeks.
Dr. Fauci says early results of Gilead's coronavirus drug trial shows significant positive effect, suggests "a drug can block this virus" pic.twitter.com/kBnkAo76el
— Bloomberg QuickTake (@QuickTake) April 29, 2020
However…. according to the AFP newswire, another test has not gone so well.
This is from our main coronavirus liveblog:
Treating coronavirus patients with the antiviral drug remdesivir showed no “significant clinical benefits” in the first randomised trial of its kind, according to research released on Wednesday, AFP reports.
In a study among more than 200 Covid-19 patients in Wuhan, China, published in The Lancet, doctors found no positive effects of administering the drug compared with a control group of adults.
Bloomberg’s John Authers has an interesting theory about the market rally.
He suspects that investors are piling back into riskier assets because they’re less worried that they’ll catch Covid-19 themselves, rather than really thinking about the wider economic damage being caused.
The rest of the week will have plenty of earnings announcements and central bank meetings to give rational reasons to buy or sell the market. Beyond that, the reduction in personal fear of the virus, and the unquestionable successes in holding it back, may have led to an irrational reduction in estimates of the economic damage.
Scientists in China suggest that Covid-19 could become a recurring seasonal disease; Singapore has been hit by a second wave of infections after apparently fighting off a first successfully; Germany has started to reopen its economy and already faces concerns that it has done so too soon. Production might be able to return to normal reasonably swiftly over the next few months — but surely consumption cannot be anywhere close to normal again until there is a vaccine. Or maybe I am just saying that because I live in a community where the problem is still severe.
I fear that the market rally has been driven by people for whom the virus seems less immediate and close, and who have moved from excessive fear to over-optimistic forecasts that the disease will now disappear.
Here’s the full piece– well worth a read.
'I fear that the market rally has been driven by people for whom the virus seems less immediate and close, and who have moved from excessive fear to over-optimistic forecasts that the disease will now disappear.' https://t.co/x0opUdUPsr by @johnauthers https://t.co/x0opUdUPsr pic.twitter.com/OF30AMrJBn
— Jesse Felder (@jessefelder) April 29, 2020
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The markets may be flying today, but the long-term cost of the pandemic will be very large…. something that is worrying politicians.
Mel Stride, the Conservative MP who chairs parliament’s influential Treasury Select Committee, has warned today that there needs to be debate about who should bear the heaviest levels of additional taxation to support the economy, once the country emerges from lockdown.
Stride told the BBC’s Radio 4 that:
“The public finances will clearly be under significantly more pressure because there will be more debt that the economy is having to service and bear, there will be very difficult choices there around spending on the one hand and taxation on the other,”
Stride added that often younger people and the lowest paid have been most impacted by the disruption caused by the coronavirus crisis.
FTSE 100 up 20% from March lows
FTSE 100 jumps to seven-week high
Oil is rallying hard, after the latest inventory figures showed a smaller rise in crude stocks than expected.
US crude oil inventories rose by 9 million barrels in the week to 24 April, the Energy Information Administration reports. Economists had expected a 10.6m rise.
Gasoline stocks fell by 3.7m barrels, against forecasts of a 2.5m rise.
This appears to be calming concerns that producers are running out of places to store energy stocks.
In response, a barrel of US crude for June delivery now costs $16.26 per barrel – up $4, or 32%, today.
#EIAReport is out!
For the week ending April 24th 2020, US commercial crude oil inventory rose by 10.136 million barrels but 1.148 million were transferred to the Strategic Petroleum Reserves, so the net effect is a build of 8.988 million.
— TankerTrackers.com, Inc.⚓️🛢 (@TankerTrackers) April 29, 2020