ECB plays catch up, raises refinancing rate to 2 percent

ECB raises Main Refinancing Rate by 75bps to 2.00%

The ECB stated:

“The Governing Council today decided to raise the three key ECB interest rates by 75 basis points. With this third major policy rate increase in a row, the Governing Council has made substantial progress in withdrawing monetary policy accommodation.

The Governing Council took today’s decision, and expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target.

Christine Lagarde: ECB President

The Governing Council will base the future policy rate path on the evolving outlook for inflation and the economy, following its meeting-by-meeting approach. Inflation remains far too high and will stay above the target for an extended period. In September, euro area inflation reached 9.9%.

In recent months, soaring energy and food prices, supply bottlenecks and the post-pandemic recovery in demand have led to a broadening of price pressures and an increase in inflation.

The Governing Council’s monetary policy is aimed at reducing support for demand and guarding against the risk of a persistent upward shift in inflation expectations. The Governing Council also decided to change the terms and conditions of the third series of targeted longer-term refinancing operations (TLTRO III).

During the acute phase of the pandemic, this instrument played a key role in countering downside risks to price stability.

Today, in view of the unexpected and extraordinary rise in inflation, it needs to be recalibrated to ensure that it is consistent with the broader monetary policy normalisation process and to reinforce the transmission of policy rate increases to bank lending conditions.

Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 2.00%, 2.25% and 1.50% respectively, with effect from 2 November 2022.

Asset purchase programme (APP)

The Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it started raising the key ECB interest rates and, in any case, for as long as necessary to maintain ample liquidity conditions and an appropriate monetary policy stance.

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Aluminum stocks move on Russian exposure!

LME issues discussion paper on Russian metal

The London Metal Exchange, or LME, has issued a discussion paper on Russian metal, stating in a summary:

“Since Russia invaded Ukraine on 24 February 2022, specific sectoral sanctions and related measures against Russia have been introduced; however, there has been no comprehensive government-led action to prevent the widespread use of Russian metal.

In parallel, the LME has been closely monitoring the usage and throughflow of Russian metal on the LME, to ensure that LME warehouses do not see a significant inflow of unwanted Russian stocks, posing a risk of creating a disorderly or unfair market.

Through 2022, the LME’s understanding is that consumers have broadly been willing to take deliveries of Russian metal, which is supported by data as to the flow of Russian stocks both into and out of LME warehouses.

Russian aluminnum looking for a new home

However, as the current negotiation period for 2023 supply agreements progresses, the LME understands that an increasing number of consumers may be expressing an unwillingness to accept Russian metal in 2023.

As a result, and in light of the potentially changing market landscape, the LME now considers it appropriate to gather further data and views.

Alcoa is U.S.’ largest aluminum smelter

This paper considers the role of the LME in this scenario, provides background and data on the subject, and asks for market feedback on possible routes forward.”

Aluminum stocks that have previously moved in reaction (now recovering) to reports that the London Metal Exchange was launching a discussion of a potential ban on new supplies of Russian metal include Alcoa (AA), Century Aluminum (CENX), Kaiser Aluminum (KALU), Constellium (CSTM) and Arconic (ARNC). 

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Rail Traffic Declines as Growth Slows!

North American rail traffic down 1% for the week ending September 17

The Association of American Railroads, AAR, reported U.S. rail traffic for the week ending September 17. For this week, total U.S. weekly rail traffic was 490,654 carloads and intermodal units, down 2.9% compared with the same week last year.

Total carloads for the week ending September 17 were 239,528 carloads, up 2% compared with the same week in 2021, while U.S. weekly intermodal volume was 251,126 containers and trailers, down 7.3% compared to 2021.

Five of the 10 carload commodity groups posted an increase compared with the same week in 2021.

They included coal, up 3,948 carloads, to 72,774; nonmetallic minerals, up 2,491 carloads, to 35,163; and motor vehicles and parts, up 2,185 carloads, to 13,879.

Commodity groups that posted decreases compared with the same week in 2021 included metallic ores and metals, down 3,192 carloads, to 21,581; miscellaneous carloads, down 1,623 carloads, to 8,250; and forest products, down 1,362 carloads, to 9,076. North American rail volume for the week ending September 17, on 12 reporting U.S., Canadian and Mexican railroads totaled 342,034 carloads, up 3.5% compared with the same week last year, and 341,595 intermodal units, down 4.7% compared with last year.

Total combined weekly rail traffic in North America was 683,629 carloads and intermodal units, down 0.8%.

North American rail volume for the first 37 weeks of 2022 was 25,025,034 carloads and intermodal units, down 2.4% compared with 2021.

Publicly traded companies in the space include CSX (CSX), Canadian National (CNI), Canadian Pacific (CP), Kansas City Southern (KSU), Norfolk Southern (NSC), Union Pacific (UNP) and Trinity Industries (TRN), Greenbrier (GBX), FreightCar America (RAIL) and Wabtec (WAB).

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What is FOMC’s next move?

The Fed says go, go, go, the markets’ say whoa, whoa, whoa

There is a lot of uncertainty on the Fed outlook and just how fast and how far will the FOMC go in hiking rates in orders to bring inflation down to the 2% average target.

Though Chair Powell gave no clear indication in last Wednesday’s press conference that the Fed was near done with its mission, the markets nevertheless heard what they wanted to hear, putting on a dovish spin and pricing in a pivot to rate cuts in the spring of 2023.

Fed Chair: Jerome Powell

But over the last week policymakers have been out in force, including several doves, strongly contradicting that outlook.

They have stressed the necessity of getting to restrictive territory while playing down the fear that the economy is already in recession.

Meanwhile, the U.S. ISM-NMI services index rose to 56.7 from a 2-year low of 55.3 in June that was last seen in February of 2021, translated to an ISM-adjusted ISM-NMI rise to 54.3 from a 2-year low of 53.7 in June.

Today’s rise joins big declines for the ISM, Chicago PMI, Dallas Fed and Philly Fed, but gains for the Richmond Fed and Empire State, to leave an 8-month producer sentiment pull-back from robust November peaks.

Surging interest rates and a flattening in real household spending as prices rise are aggravating the downtrend, though sentiment also faces support as businesses continue to restock.

The ISM-adjusted average of the major sentiment surveys in July fell to a 2-year low of 52 from prior lows of 53 in June and 54 in May. Analysts saw a 62 all-time high in both November and May of 2021. Analysts expect a 52 average in Q3, after averages of 55 in Q2, 57 in Q1, and 60 in Q4.

The futures are now repricing for about a 50-50 risk for a third straight 75 bp hike in September.

James Bullard
Federal Reserve Bank of St. Louis

Meanwhile, the hawk Bullard continues to look for a policy rate around 3.75% to 4% by year-end, though implied Fed funds still reflect a terminal rate in the 3.5% area.

Analysts continue to project a 50 bp boost in September followed by 25 bps in November and December to bring the median funds rate to 3.375%.

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Beige Book says housing is slowing amid high inflation

Fed’s Beige Book reiterated the economy expanded at a moderate pace

Fed’s Beige Book reiterated the economy expanded at a moderate pace.

But there was a big “however,” something the Fed typically does not express:

“several Districts reported grow signs of a slowdown in demand, and contacts in five Districts noted concerns over an increased risk of a recession.”

Most Districts reported moderation in consumer spending as higher food and gas prices diminished households’ discretionary income.

Federal Reserve Regions

Auto sales were sluggish with low inventories still impacting.

Leisure travel was “healthy.” Manufacturing was mixed. Non-financial services firms saw stable to slightly higher demand. Housing demand weakened.

As in the prior report, the outlook for future economic growth was mostly negative.

Employment generally continued to rise at a moderate pace and conditions were tight overall.

Jerome Powell, FOMC Chair

But there was some sign of modest improvement in labor availability.

Most Districts reported wage growth.

“Substantial” price increases were reported across all Districts, at all stages of consumption, with food, commodities, and energy (particularly fuel) cost remaining “significant.”

There was some moderation in construction materials.

Pricing power was steady, but firms in some sectors like travel and hospitality, were able to pass through sizeable increases to consumers. That is seen persisting through the year.

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FOMC Raises Rates

Fed boosts rates 50 basis points, says ongoing raises ‘appropriate’ 

The Federal Reserve said in today’s statement, “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent and anticipates that ongoing increases in the target range will be appropriate.”

Federal Reserve to reduce Treasury, debt holdings on June 1 – The Federal Reserve said in today’s statement, “The Committee decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in conjunction with this statement.”

Fed says inflation remains elevated, Ukraine impacts ‘highly uncertain’ – The Federal Reserve said in today’s statement, “Although overall economic activity edged down in the first quarter, household spending and business fixed investment remained strong. Job gains have been robust in recent months, and the unemployment rate has declined substantially. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.

The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain. The invasion and related events are creating additional upward pressure on inflation and are likely to weigh on economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks.”

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Rate Hikes are Coming!

Fed Chair confirmed a 25 bp rate hike this month

Fed’s Beige Book was released a few minutes ago. The report reiterated the economy expanded at a “modest to moderate” pace. Many Districts reported that the surge in Covid cases and severe winter weather disrupted businesses. Some firms noted a “temporary” weakening in demand in the hospitality sector to Covid.

The Beige Book reports an expanding economy

“All Districts” said supply chain issues and low inventories continued to restrain growth, especially in construction.

The overall outlook for the next 6 months remained one of stable and general optimism, though with elevated uncertainty.

Powell, FOMC Chair, Stockwinners
Fed Chief Jerome Powell

For the labor market, the widespread strong demand for labor was hampered by “equally widespread reports of worker scarcity.”

Meanwhile,  Fed Chair Powell’s testified before the Congress today. He confirmed a 25 basis points rate hike is in the cards for the March 15-16 meeting.

FOMC as policymakers look to address “indisputably” high inflation pressures. He also suggested more aggressive increases could be warranted down the road. Powell said liquidity has been functional thanks to a number of measures and facilities put in place, including swap lines and the standing repo facility.

FOMC is looking to soak up liquidity

The Fed has “institutionalized liquidity provisions” — hence the geopolitical pressures have not added stresses in the funding markets.

The markets are sharply higher across all sectors.

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Economic Activities Slowed in December

U.S. flash Markit PMIs all slipped in December

U.S. flash Markit Purchasing Managers Index’s (PMI) all slipped in December as activity eased amid well known headwinds such as capacity constraints and Omicron variant spread.

Flash Manufacturing PMI is an estimate of manufacturing for a country, based on about 85% to 90% of total Purchasing Managers’ Index (PMI) survey responses each month.

Any reading of the Flash Manufacturing PMI above 50 indicates improving conditions, while readings below 50 indicate a deteriorating economic climate.

The manufacturing index fell another -0.5 ticks to 57.8 in December after dipping -0.1 ticks to 58.3 in November. It is the weakest since the 57.1 last December.

The index has been sliding from the record high of 63.4 in July, but it remains in expansion for an 18th straight month.

New orders declined to 56.3 from 56.9, while supplier delivers increased to their best reading since May.

The preliminary services index also fell -0.5 ticks to 57.5 on the month following the -0.7 point decline to 58.0. The reading is above the 54.8 from a year ago, however, and has been above 50 since July 2020.

The business expectations component improved to its highest reading since November 2020.

Input prices climbed to 77.4 versus 75.7 last month and is at an all-time peak (data goes back to 2009).

The composite reading dipped -0.3 ticks to 56.9 from November’s 57.2 and was at 55.3 last December. Input prices increased to a new record level at 78.1 from November’s 77.6.

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Railroad Traffic Points to Growing Economy

North American rail traffic rose 10.6% in week ended June 19, AAR says

The Association of American Railroads, AAR, reported U.S. rail traffic for the week ending June 19.

For this week, total U.S. weekly rail traffic was 514,112 carloads and intermodal units, up 12.5% compared with the same week last year.

Total carloads for the week ending June 19 were 232,144 carloads, up 15.1% compared with the same week in 2020, while U.S. weekly intermodal volume was 281,968 containers and trailers, up 10.4% compared to 2020.

For some rail traffic categories, percentage changes for the current week compared with the same week in 2020 are inflated because of the widespread shutdowns – and subsequent large reduction in rail volumes – that impacted many economic sectors last year at this time.

North American rail volume for the week ending June 19, on 12 reporting U.S., Canadian and Mexican railroads totaled 329,907 carloads, up 11.3% compared with the same week last year, and 369,258 intermodal units, up 10% compared with last year.

Total combined weekly rail traffic in North America was 699,165 carloads and intermodal units, up 10.6%.

North American rail volume for the first 24 weeks of 2021 was 16,805,420 carloads and intermodal units, up 12.1% compared with 2020.

Publicly traded companies in the space include CSX (CSX), Canadian National (CNI), Canadian Pacific (CP), Genesee & Wyoming (GWR), Kansas City Southern (KSU), Norfolk Southern (NSC) and Union Pacific (UNP).

Dow Jones Transport Index is up 19 points to 14,959.

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Uncertainty in economy pushes lawmakers to come up with stimulus bill!

Powell says outlook for economy is ‘extraordinarily uncertain’

In prepared remarks for the Senate Committee on Banking, Housing, and Urban Affairs, Federal Reserve Chair Jay Powell said:

Jerome Powell say economy is on shaky ground

“Economic activity has continued to recover from its depressed second-quarter level. The reopening of the economy led to a rapid rebound in activity, and real gross domestic product, or GDP, rose at an annual rate of 33 percent in the third quarter.

In recent months, however, the pace of improvement has moderated.

Household spending on goods, especially durable goods, has been strong and has moved above its pre-pandemic level.

In contrast, spending on services remains low largely because of ongoing weakness in sectors that typically require people to gather closely, including travel and hospitality.

The overall rebound in household spending is due, in part, to federal stimulus payments and expanded unemployment benefits, which provided essential support to many families and individuals…

As we have emphasized throughout the pandemic, the outlook for the economy is extraordinarily uncertain and will depend, in large part, on the success of efforts to keep the virus in check…

Covid-19 has caused a global slowdown

The rise in new COVID-19 cases, both here and abroad, is concerning and could prove challenging for the next few months.

A full economic recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities.

Recent news on the vaccine front is very positive for the medium term. For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficacy across different groups.”

Meanwhile lawmakers in Washington have come up with a new stimulus plan.  

A bipartisan group of U.S. lawmakers announced a $908B COVID-19 aid package aimed to breaking a monthslong deadlock between Democrats and Republicans over new emergency relief for small businesses, unemployed people, airlines, and other industries during the coronavirus crisis, Reuters’ Richard Cowan and Doina Chiacu report.

The bill has not yet been written into legislation, nor has it been embraced by the Republican White House, Democratic President-elect Joe Biden, or leaders in the Senate or House of Representatives, the authors note.

The package, however, does come with the support of a group of conservatives and moderates who believe it will appeal to a broad swath of Congress, the authors note.

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U.S. sues Teva Pharmaceuticals for kickbacks

Justice Department files False Claims Act against Teva Pharmaceuticals

The U.S. Attorney’s Office has filed a complaint under the False Claims Act against Teva Pharmaceuticals USA. and Teva Neuroscience (TEVA), the maker of Copaxone, a drug for multiple sclerosis.

The government alleges that Teva conspired with a specialty pharmacy, Advanced Care Scripts, and two purportedly independent foundations, Chronic Disease Fund and The Assistance Fund, to violate the Anti-Kickback Statute and False Claims Act by using the foundations as conduits to subsidize Medicare co-pays for Copaxone, all while steadily raising Copaxone’s price, the Justice Department said in a statement.

Teva Pharma. is accused of offering kickbacks

The government alleges that, from 2006 through at least 2015, Teva paid the two foundations well over $300M with the intent and understanding that the foundations would use Teva’s money to cover the Medicare co-pays of patients taking Copaxone. During the same period, Teva raised the price of Copaxone from approximately $17,000 per year to over $73,000 per year, according to the DOJ.

Copaxone is used to treat multiple sclerosis

Copaxone is a brand-name prescription drug. It’s approved to treat certain forms of multiple sclerosis (MS) in adults.

Chronic Disease Fund is accused of being part of the scheme

With MS, the immune system mistakenly attacks the nerves. The damaged nerves then have trouble communicating with brain. This condition can cause a wide variety of symptoms, such as muscle weakness and fatigue (lack of energy).

The Assistance Fund is accused of being part of the price kickback

Copaxone contains the active drug glatiramer acetate. It’s a disease-modifying therapy for MS. Copaxone helps to stop the immune system from attacking the nerves. The drug can reduce the number of MS relapses and also slow worsening of the disease.

Copaxone comes as a solution that’s given by subcutaneous injection (an injection under your skin).

Teva Pharmaceutical Industries Limited is an Israeli pharmaceutical company. The firm develops, manufactures, markets, and distributes generic medicines, specialty medicines, and biopharmaceutical products in North America, Europe, and internationally. It is one of the largest generic drugmakers in the world.

Shares of Teva are down 9% to $10.52 in morning trading. 

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New York sues to dissolve NRA

New York Attorney General James files lawsuit to dissolve NRA

New York Attorney General Letitia James has filed a lawsuit seeking to dissolve the National Rifle Association.

According to a statement, “Attorney General James charges the organization with illegal conduct because of their diversion of millions of dollars away from the charitable mission of the organization for personal use by senior leadership, awarding contracts to the financial gain of close associates and family, and appearing to dole out lucrative no-show contracts to former employees in order to buy their silence and continued loyalty.

The suit specifically charges the NRA as a whole, as well as Executive Vice-President Wayne LaPierre, former Treasurer and Chief Financial Officer Wilson “Woody” Phillips, former Chief of Staff and the Executive Director of General Operations Joshua Powell, and Corporate Secretary and General Counsel John Frazer with failing to manage the NRA’s funds and failing to follow numerous state and federal laws, contributing to the loss of more than $64M in just three years for the NRA.

NY Attorney General Letitia James

In the complaint, Attorney General James lays out dozens of examples where the four individual defendants failed to fulfill their fiduciary duty to the NRA and used millions upon millions from NRA reserves for personal use, including trips for them and their families to the Bahamas, private jets, expensive meals, and other private travel.

In addition to shuttering the NRA’s doors, Attorney General James seeks to recoup millions in lost assets and to stop the four individual defendants from serving on the board of any not-for-profit charitable organization in the state of New York again.”

It further states that, “the NRA is alleged to have fostered a culture of noncompliance and disregard for internal controls that led to the waste and loss of millions in assets and contributed to the NRA reaching its current deteriorated financial state.

Vista Outdoor (VSTO), Stockwinners

The NRA’s internal policies were repeatedly not followed and were even blatantly ignored by senior leaders. Furthermore, the NRA board’s audit committee was negligent in its duty to ensure appropriate, competent, and judicious stewardship of assets by NRA leadership.

Specifically, the committee failed to assure standard fiscal controls, failed to respond adequately to whistleblowers, affirmatively took steps to conceal the nature and scope of whistleblower concerns from external auditors, and failed to review potential conflicts of interest for employees.

Smith & Wesson Brands (SWBI), Stockwinners

The lawsuit alleges that the four men instituted a culture of self-dealing, mismanagement, and negligent oversight at the NRA that was illegal, oppressive, and fraudulent.

They overrode and evaded internal controls to allow themselves, their families, favored board members, employees, and vendors to benefit through reimbursed expenses, related party transactions, excess compensation, side deals, and waste of charitable assets without regard to the NRA’s best interests.

Sturm, Ruger (RGR), Stockwinners

The complaint lays out numerous other instances in which LaPierre, Phillips, Powell, Frazer, and other executives and board members at the NRA abused their power and illegally diverted or facilitated the diversion of tens of millions of dollars from the NRA.

These funds were in addition to millions of dollars the four individual defendants were already receiving in grossly excessive salaries and bonuses that were not in line with the best practices and prudent standards for evaluating and determining compensation.”

Stocks to Watch

Companies in the firearm space include Sturm, Ruger (RGR), Smith & Wesson Brands (SWBI), and Vista Outdoor (VSTO).

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NanoViricides shares jump on it’s potential Covid-19 drug

NanoViricides announces safety results from drug candidates against SARS-CoV-2

NanoViricides (NNVC) announced that safety and tolerability of the drug candidates it is developing against SARS-CoV-2 to treat COVID-19 spectrum of diseases was observed in an animal model.

The company said the nanoviricides drug candidates tested in this safety/tolerability study have previously shown strong effectiveness against lung infection by a SARS-CoV-2 like coronavirus, namely, hCoV-NL63, in an animal study as previously reported by the company.

Three different drug candidates at three different dosage levels and vehicle control were administered to separate groups of mice intravenously in the Safety-Tolerability study.

Clinical observations and gross post-mortem studies have been completed.

The tested drug candidates were safe and well tolerated, thereby clearing the path for further development towards a treatment for SARS-CoV-2 infection that has caused the current COVID-19 pandemic.

Nanoviricides are designed to act by a novel mechanism of action, trapping the virus particle.

Antibodies, in contrast, only label the virus for other components of the immune system to take care of. It is well known that the immune system is not functioning properly at least in severe COVID-19 patients.

Additionally, it is well known that viruses escape antibody-drugs via mutations.

The company’s “nanoviricide” drug candidates, in contrast, are designed to be broad-spectrum, and therefore virus escape by mutations is expected to be unlikely.

In this Safety/Tolerability Study, there were no clinical signs of immune or allergic reactions such as itching, biting, twitching, rough coat, etc.

Further, there were no observable changes in any organs including large intestine or colon on post mortem in gross histology. The only reportable changes observed were, in the high dosage groups of two of the three drug candidates tested, associated with the non-absorption of water, in the colon.

This is consistent with the clinical observation of very loosened stools in the same groups. In clinical usage, the drug candidates are not anticipated to be administered in such high levels. The objective of this study was to discover the dosage level at which such an effect may occur.

Sixteen mice in each group were administered one of the three drug candidates at one of the three dose levels, and additionally, one group was administered vehicle control, for seven days by daily tail-vein intravenous infusion in this blinded study with additional evaluations on eighth day.

This non-GLP safety/tolerability study was conducted under GLP-like conditions.

The company believes that loose or very loose stools at very high dosages in such a study is an expected and acceptable side effect of the polyethylene glycol, or PEG, moiety, which forms the backbone of the nanoviricides drug candidates.

PEG is used prior to colonoscopy in humans to promote loose stools and internal cleaning of the intestines, by causing non-absorption of water.

The company has previously reported that these drug candidates have shown strong effectiveness in a lethal lung infection model in rats using a coronavirus that uses the same ACE2 receptor as SARS-CoV-2 which causes COVID-19, namely hCoV-NL63.

The company has found that hCoV-NL63, which causes a milder disease than SARS-CoV-2, causes substantially similar clinical pathology in this efficacy animal model as has been reported for SARS-CoV-2 associated lung infections in humans. In this previously reported lethal direct-lung-infection model efficacy study, animals in all groups developed lung disease which later led to multi-organ failures, a clinical pathology resembling that of the SARS-CoV-2.

Reduction in loss of body weight at day seven was used as the primary indicator of drug effectiveness. Rats were infected directly into lungs with lethal amounts of hCoV-NL63 virus particles and then different groups were treated separately with five different nanoviricides drug candidates, remdesivir as a positive control, and the vehicle as a negative control.

The treatment was intravenous by tail-vein injection once daily for five days, except in the case of remdesivir wherein it was by tail-vein injection twice daily. In this efficacy study, animals treated with the five different nanoviricides showed significantly reduced body weight loss.

The body weight loss in female animals ranged from only 3.9% to 11.2% in the different nanoviricide-treated groups, as compared to 20% in vehicle-treated control group, and 15.2% in a remdesivir-treated group. The body weight loss in male animals ranged from 8% to 10.9% in the different nanoviricides-treated groups, as compared to 25% in the vehicle-treated control group, and 18.6% in remdesivir-treated group.

Smaller numbers mean less loss in body weight compared to starting body weight in the group, and indicate greater drug effectiveness.

The effectiveness of nanoviricide drug candidates in the lung-infection model is consistent with the effectiveness observed in cell culture studies against infection of both hCoV-NL63, which was used in the efficacy study, and hCoV-229E, another circulating coronavirus that uses a distinctly different receptor, namely APN. Prior to filing for human clinical trials,

NanoViricides plans on requesting a pre-IND Meeting with the FDA for regulatory guidance.

NNVC is up $2.04 to $8.97.

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IMF warns of global slowdown

International Monetary Fund cuts global growth forecast

IMF cuts global growth forecast and warns that the rebound in global financial markets “appears disconnected from shifts in underlying economic prospects”.

The fund now expects global GDP to shrink -4.9% this year, from -3.0% expected in April.

For next year, the IMF sees a rebound of 5.4%, also lower than the 5.8% projected two months ago with downward revisions reflecting the deep scars from a larger than expected supply shock during lockdowns as well as a continued hit to demand from social distancing and other virus measures.

Orange color designates economic downgrades

The IMF warned that for nations struggling to control the spread of the virus a longer lockdown will also take a toll on growth.

“With the relentless spread of the pandemic, prospects of long lasting negative consequences for livelihoods, job security and inequality have grown more daunting”, according to the fund’s update to the World Economic Outlook.

Advanced economies are expected to lead the downdraft with a -8.0% rate, versus -6.1% in the prior forecast.

The outlook on the U.S. was downgraded to -8.0% from -5.9%.

The projection on the Euro Area was knocked down to -10.2% from -7.5%. The UK is also seen posting a -10.2% contraction versus -6.5% previously. Japan was revised to -5.8% from -5.2%.

Emerging market and developing economies are seen falling -3.0% versus -1.0% in the April forecast. China is expected to expand 1.0%, though down from the prior 1.2%.

The largest revision was seen with India where the prior 1.9% growth rate was revised to a -4.5% contraction. World trade volume is projected tumbling at a -11.9% pace this year, a downgrade from -11.0% previously, though is expected to bounce back to an 8.0% growth rate in 2021.

Consumer prices in Advanced economies is seen slowing to 0.3% versus the prior estimate of 0.5%, and is down from a 1.4% pace in 2019.

Several central bank officials have also tried to reign in optimism about the recovery as markets seem to run away with the recovery story.

India’s economy is expected to hit hard with Covid-19

Massive monetary and fiscal support may help to kick-start a rebound, but as ECB chief economist Lane warned today, it will take a long time to reach pre-crisis levels.

The Bank o Japan’s summary of opinion warned that a prolonged negative impact of virus developments on the economic outlook looks unavoidable. And China’s Beige Book expects a contraction for China’s economy this year. 

New York Governor Andrew Cuomo, along with Governor Phil Murphy of New Jersey and Governor Ned Lamont of Connecticut, announced a joint travel advisory.

All individuals traveling from states with significant community spread of COVID-19 into any of the three states must quarantine for 14 days, the governors announced.

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Fed pumps more money into economy

Fed says SMCCF will begin buying portfolio of corporate bonds

The Federal Reserve Board announced updates to the Secondary Market Corporate Credit Facility, or SMCCF, which will begin buying “a broad and diversified portfolio of corporate bonds to support market liquidity and the availability of credit for large employers.”

The Fed added that “the SMCCF will purchase corporate bonds to create a corporate bond portfolio that is based on a broad, diversified market index of U.S. corporate bonds.

This index is made up of all the bonds in the secondary market that have been issued by U.S. companies that satisfy the facility’s minimum rating, maximum maturity, and other criteria.

Feds crank up their printing presses

This indexing approach will complement the facility’s current purchases of exchange-traded funds.

The Primary Market and Secondary Market Corporate Credit Facilities were established with the approval of the Treasury Secretary and with $75 billion in equity provided by the Treasury Department from the CARES Act.”

The SMCCF supports market liquidity by purchasing in the secondary market corporate bonds issued by investment grade U.S. companies or certain U.S. companies that were investment grade as of March 22, 2020, as well as U.S.-listed exchange-traded funds whose investment objective is to provide broad exposure to the market for U.S. corporate bonds.

Feds bailout Wall Street firms

The SMCCF’s purchases of corporate bonds will create a portfolio that tracks a broad, diversified market index of U.S. corporate bonds.

The Treasury, using funds appropriated to the ESF through the CARES Act, will make an equity investment in an SPV established by the Federal Reserve for the SMCCF and the Primary Market Corporate Credit Facility.

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