Regeneron Gets the ‘Ultimate Validation’ After Trump’s Treatment

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Comments of the Day


06 October 2020






Video commentary for October 5th 2020




Eoin Treacy’s view


A link to today’s video commentary is posted in the Subscriber’s Area.

Some of the topics discussed include: government bond yield rise, stocks firm, biotech extends rebound, gold and silver steady, oil and natural gas jump, Chinese reminbi breaking out favours all emerging markets.






Regeneron Gets the ‘Ultimate Validation’ After Trump’s Treatment


This article by Cristin Flanagan for Bloomberg may be of interest to subscribers. Here is a section:


Regeneron Pharmaceuticals Inc. climbed the most in almost seven months on Monday after U.S. President Donald Trump received the biotech company’s antibody cocktail to treat Covid-19.

President Trump’s treatment was the “ultimate validation” for Regeneron, according to SVB Leerink analyst Geoffrey Porges. Like Regeneron, Eli Lilly & Co. and AbCellera Biologics Inc. are developing an antibody therapy, not only as a treatment for the virus but also as a preventative.


When used as a prophylactic, these products could be considered a passive vaccine as opposed to the active shots most people think of as a vaccine, Bloomberg Intelligence’s Sam Fazeli said last week. AstraZeneca Plc, as well as GlaxoSmithKline PLC and partner Vir Biotechnology Inc. are testing similar therapies.




Eoin Treacy’s view


The primary reason for the lockdowns in March was because there was no effective treatment for the virus. Considering the speed with which it was spreading there was a clear risk hospitals would be inundated with patients. As news headlines are filled with talk of second waves, we really should be looking at the response from a first principles basis.






Alibaba to Buy Up to 10% Stake in Duty-Free Retailer Dufry


This article by Thomas Mulier for Bloomberg may be of interest to subscribers. Here is a section:


Alibaba Group Holding Ltd. agreed to buy as much as a 9.99% stake in Dufry AG, giving the Swiss duty-free giant a lifeline as the pandemic hammers the business.


Dufry said Monday it’s proposing a capital increase that will raise up to 700 million Swiss francs ($763 million), and Alibaba will participate. Advent International Corp., a private equity company, also plans to invest as much as 455 million francs. Dufry shares surged as much as 16%.


The Swiss company said the proceeds from the share sale will help it buy out its Hudson Ltd. U.S. unit, as previously announced.


The capital increase will bolster the company, whose market value has dropped to 1.6 billion francs as the shares trade near the lowest in a decade. The companies are also forming a joint venture in China that will combine Alibaba’s digital capabilities and network with Dufry’s travel retail business in that market.




Eoin Treacy’s view


The absence of airline traffic gutted Dufry’s business model. That’s a condition which has been shared by every business leveraged to travel and tourism. The big question is how long air travel will take to recover. I remain of the opinion we are close to the peak of coronavirus hysteria. That suggests it can only get better from here.






Fed’s Evans Sees Yearslong Wait Ahead for Inflation Overshoot


This article by Matthew Boesler for Bloomberg may be of interest to subscribers. Here is a section:


Federal Reserve officials will probably have to wait for years to see the inflation rate rise above the U.S. central bank’s 2% target, Chicago Fed President Charles Evans said.

“I expect inflation to slowly improve, reaching 2% on a persistent basis in 2023 and then moderately overshooting 2% over the following few years,” Evans said Monday in remarks prepared for a speech at a virtual conference.

“We likely have a lot of work ahead of us. And it’s crucial that we acknowledge the magnitude of the job up front to help lessen the temptation to back off the overshoot too early in the process,” he said.




Eoin Treacy’s view


Treasury yields have risen during past episodes of quantitative easing. The support given the bond market creates an incentive to move further out the risk curve in search of returns. That means less demand for Treasuries and more demand for everything else.






Email of the day – on listening the audio


Eoin appeared to ask subscribers to indicate whether or not they listen to his daily broadcasts. This email confirms that I do so every day without fail and find them more than useful as I still am a Trustee of a number of charitable Trusts who have benefitted from his work and I frankly don’t know what I would do without his input.


And


You asked today whether anyone still listened to the audio commentary. Well, I certainly do. I rarely miss it. I sometimes listen more than once a day, typically when I am out walking or driving. Obviously, it is not practical/possible to watch the video on those occasions.


Keep up the good work!




Eoin Treacy’s view


Thank you for this valuable input. We are in the process of upgrading our server and this will ensure we make full allowance for retaining the audio commentary in addition to the video.






Eoin’s personal portfolio: investment position increased October 2nd




Eoin Treacy’s view


One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change.

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