New Trade for July 16th 2020

S&P futures dipped 0.7% this morning, giving up partial gains from yesterday’s 1% rise.  The weekly U.S. jobless claims report will be out shortly.  We have seen markets shrug off negative jobless claims more often than not in the recent months.  We will see how the markets react today, in conjunction with the other current influencing factors.  

Yesterday airlines, cruise lines, casinos and other travel and leisure stocks were up on hopeful vaccine news from Moderna.  In pre-market trading this morning yesterday’s travel and lesiure gains are fading.  We could be on this bumpy road until we have a solution for the current health crisis. 

Today’s trade highlights one company whose Q2 numbers demonstrate the current climate to a tee.  Johnson & Johnson’s (JNJ) second quarter profit sunk 35% from 1 year ago as a result of the COVID-19 pandemic, but still beat expectations.  

Medical device sales tumbled 34% from a year ago as elective surgeries were put on hold.  Consumer health sales fell 7% as consumers bought fewer health and beauty products while sheltering at home.  Pharmaceutical sales, which account for 59% of profit, grew 2.1% to top expectations.  

“Our second-quarter results reflect the impact of COVID-19 and the enduring strength of our pharmaceutical business, where we saw continued growth even in this environment.”  J&J CEO Alex Gorsky said in a statement.

Considering that JNJ is moving ahead of schedule with their late-stage coronavirus vaccine trial and considering that JNJ is one of the only contenders in the vaccine race with proven production capabilities – a pull back this morning would be a gift. 


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