June’s Expected Rate Hike Could Be the Last One for Now

Following the May Job report, Fed Fund Rates do not forecast another rate hike

 A 25 basis point rate hike on June 14 is still widely expected. However, the outlook for a third tightening this year has become unclear

 

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The Federal Open Market Committee #FOMC , a committee within the Federal Reserve System, is charged under the United States law with overseeing the nation’s open market operations. FOMC has a 2-day meeting on June 13 and 14th, 2017.

A 25 basis point rate hike on June 14 is still widely expected. However, the outlook for a third tightening this year has become muddied.

Fed Policy Outlook

Despite the disappointing May employment report, and softening in inflation, the FOMC shouldn’t be derailed from increasing the funds rate band by another 25 bps this month, to put it at 1% to 1.25%.

Data show growth has improved measurably this quarter. Other than the jobs release, most other labor market indicators are reflecting a tight labor market.

Analysts are  projecting a jump to a 2.7% pace on Q2 GDP.

Additionally, the manufacturing and service sectors are still expanding.

Meanwhile, the deceleration in price pressures globally is troubling, but that is having an impact on Fed policy forecasts on Q3 and Q4.

Additionally, speculation over when the Committee will announce balance sheet normalization details is impacting, with Goldman Sachs having pushed back it’s forecast for the third 2017 hike to December from September on expectations for balance sheet details to be announced at the September 19, 20 meeting.

Analysts are still forecasting a September tightening, but if price pressures remain tepid, it may be the case the Fed delays rate action next quarter in favor of the balance sheet.

A look at the table below shows that odds of rate hike in September has been taken off the table:

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Fed Fund Rates Forecast as of June 7, 2017

There are a lot of events coming up in the next few days that may push the Financial stocks higher if FOMC modifies its language toward future policies. Note that there is an election in UK tomorrow and Comey testifies before the Congress tomorrow also.  A relief rally (short-covering) in the Financial Stocks (XLF) maybe in the cards.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

 

Inovio Zika Vaccine Proves Effective in Mice

Inovio Pharmaceuticals INO announced its DNA-based Zika vaccine protected against Zika virus-induced damage to testes and sperm, and prevented persistence of the virus in the reproductive tract of all vaccinated male mice challenged with a high dose of the Zika virus.

This published data suggests another avenue of potential protection against the Zika virus

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#Inovio Pharmaceuticals #INO announced its DNA-based #Zika vaccine protected against Zika virus-induced damage to testes and sperm, and prevented persistence of the virus in the reproductive tract of all vaccinated male mice challenged with a high dose of the Zika virus.

This preclinical study data was published in Nature Communications in an article entitled, “DNA Vaccination Protects Mice Against Zika Virus-Induced Damage to the Testes,” written by Inovio scientists and collaborators.

Dr. Gary Kobinger, lead author of the study and Director of the Centre for Research in Infectious Diseases at Laval University in Quebec City, Canada, said, “Given that we know that Zika virus infection can involve the male reproductive tract and persist in humans for several months after onset of infection, this preclinical data warrants further examination as a potential means to reduce Zika virus infection of the male reproductive tract and the risk of sexual transmission of the virus.”

Dr. J. Joseph Kim, Inovio’s President and CEO, said, “This published data suggests another avenue of potential protection against the Zika virus. While detrimental effects on sperm and fertility have not yet been reported in Zika-infected human males, persistence of Zika in semen and sperm and sexual transmission by males has been documented. This new preclinical data suggests that our Zika vaccine may represent an opportunity to limit the potential for sexual transmission of the virus.

In addition to our ongoing ZIKA-001 and 002 clinical studies, we are planning for a larger phase 2 study in our efforts to bring our Zika vaccine to patients.”

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Takeda and Seattle Genetics Publish Positive Results on T-cell lymphoma

ADCETRIS is an antibody-drug conjugate directed to CD30 which is expressed on CTCL lesions in approximately 50 percent of patients with the disease

Based on the study results, Takeda plans to begin to submit data from the ALCANZA trial to regulatory agencies in its territories in 2017.

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#Takeda (TKPYY) and #SeattleGenetics (SGEN) announced that data from the randomized Phase 3 ALCANZA clinical trial evaluating ADCETRIS in patients with cutaneous T-cell #lymphoma were published in the journal #Lancet.

Lymphoma is the most common blood cancer. The two main forms of lymphoma are Hodgkin lymphoma and non-Hodgkin lymphoma (NHL). Lymphoma occurs when cells of the immune system called lymphocytes, a type of white blood cell, grow and multiply uncontrollably. Cancerous lymphocytes can travel to many parts of the body, including the lymph nodes, spleen, bone marrow, blood, or other organs, and form a mass called a tumor. The body has two main types of lymphocytes that can develop into lymphomas: B-lymphocytes (B-cells) and T-lymphocytes (T-cells).

Data were previously presented in an oral session at the 58th American Society of Hematology annual meeting in December 2016.

#ADCETRIS is an antibody-drug conjugate directed to CD30 which is expressed on CTCL lesions in approximately 50 percent of patients with the disease.

ADCETRIS is currently not approved for the treatment of CTCL.

ALCANZA is a randomized, open-label Phase 3 study designed to evaluate single-agent ADCETRIS versus a control arm of investigator’s choice of the standard of care therapies methotrexate or bexarotene, in patients with CD30-positive CTCL.

The manuscript highlights data from the trial which achieved its primary endpoint with the ADCETRIS treatment arm demonstrating a highly statistically significant improvement in the rate of objective response lasting at least four months (ORR4) versus the control arm as assessed by an independent review facility.

#ORR4, as assessed by Global Response Score, was 56.3 percent in the ADCETRIS arm compared to 12.5 percent in the control arm.

Key secondary endpoints specified in the protocol, including complete response rate, progression-free survival and reduction in the burden of symptoms during treatment (Skindex-29), were all highly statistically significant in favor of the ADCETRIS arm.

The safety profile associated with ADCETRIS from the ALCANZA trial was generally consistent with the existing prescribing information.

The most common adverse events of any grade include: peripheral neuropathy, nausea, diarrhea, fatigue, vomiting, alopecia, pruritis, pyrexia, decreased appetite and hypertriglyceridemia.

Based on the study results, Takeda plans to begin to submit data from the ALCANZA trial to regulatory agencies in its territories in 2017. The U.S. FDA granted Breakthrough Therapy Designation to ADCETRIS for the treatment of the most common subtypes of CTCL, mycosis fungoides and primary cutaneous anaplastic large cell lymphoma .

Seattle Genetics plans to submit these data as part of a supplemental Biologics License Application to the FDA in mid-2017. The ALCANZA trial received a Special Protocol Assessment agreement from the FDA and scientific advice from the European Medicines Agency.

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Rig Counts Continue to Rise

Domestic Rig Count now Exceeds that of International Rigs

The worldwide rig count for May 2017 was 1,935, up 18 from the 1,917 counted in April 2017, and up 530 from the 1,405 counted in May 2016

 

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Baker Hughes Incorporated ($BHI) announced today that the international rig count for May 2017 was 957, up 1 from the 956 counted in April 2017, and up 2 from the 955 counted in May 2016.

The international offshore rig count for May 2017 was 202, up 1 from the 201 counted in April 2017, and down 27 from the 229 counted in May 2016.

The average U.S. rig count for May 2017 was 893, up 40 from the 853 counted in April 2017, and up 485 from the 408 counted in May 2016.

The average Canadian rig count for May 2017 was 85, down 23 from the 108 counted in April 2017, and up 43 from the 42 counted in May 2016.

The worldwide rig count for May 2017 was 1,935, up 18 from the 1,917 counted in April 2017, and up 530 from the 1,405 counted in May 2016.

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West Texas Intermediate #WTI is down 29 cents to $47.91 per barrel. Brent is down 37 cents to $49.75 per barrel.

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