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Markets On Edge Ahead Of The Fed’s Policy Update This Afternoon

Markets On Edge Ahead Of The Fed’s Policy Update This Afternoon

Plus, Regeneron said its antibody cocktail reduced the risk of death by 20% among hospitalized COVID-19 patients, Oracle disappointed on earnings guidance, and Diageo inked a multi-year deal with the NFL.

Stocks were slightly higher at the open on Wednesday with the Dow adding just 9 points, or less than 0.1%. The S&P 500 opened just above the flatline, while the Nasdaq rose by 0.1%.

Stocks are little changed today ahead of the Fed’s much anticipated policy update, which is expected this afternoon. The Federal Reserve’s Open Market Committee is all but certain to hold interest rates unchanged and announce no changes to its asset purchases. However, many are expecting the Fed to mention a coming tapering of its bond-buying program and give preliminary guidance on the discussion but not fully commit to tapering yet. I think the commentary and the press conference will be interesting. There’s clearly a division on the board and among the Fed presidents about how strong the economy is, and whether it’s time to start evolving the policy,” said Rick Rieder, chief investment officer global fixed income at BlackRock. “How the chairman describes that is going to be very interesting. It’s hard to say it’s [going to be] hawkish because … I think it’s going from uber dovish to overly dovish.”

Regeneron shares are up nearly 2% at the time of writing after the company said its antibody cocktail reduced the risk of death by 20% among hospitalized COVID-19 patients who don’t have a natural antibody response of their own. The results suggest there would be six fewer deaths over 28 days for every 100 patients, with patients who got the cocktail also spending four fewer days in the hospital on average with less need for a ventilator. “It means that patients being hospitalized with COVID-19 can be divided into two groups based on whether or not they have made antibodies to the virus,” Fiona Watt, executive chair of the U.K.’s Medical Research Council, said in a statement. “If they do not have antibodies then the treatment with antibody-based drugs to the spike protein can reduce their risk of death and also time spent in hospital. Patients who have made their own antibodies to the virus do not benefit from the new treatment, which is important information given the cost of drugs.”

Oracle shares are down more than 5% after the company delivered an earnings beat, but disappointed on guidance. The enterprise software maker reported earnings per share of $1.54 on revenue of $11.23 billion, versus estimates for earnings per share of $1.31 on revenue of $11.04 billion. With respect to guidance, Oracle CEO Safra Catz called for $0.94 to $0.98 in adjusted earnings per share and 3% to 5% revenue growth in the fiscal first quarter, while analysts had expected guidance of earnings of $1.03 per share and 3% revenue growth. “We expect to roughly double our cloud capex spend in FY 2022 to nearly $4 billion,” Catz said. “We are confident that the increased return in the cloud business more than justifies this increased investment, and our margins will expand over time.”

Diageo has signed a multiyear deal with the NFL to become the league’s first spirits sponsor. The world’s largest distiller’s deal with the NFL spans marketing platforms, including broadcast, digital, and social channels, and is the first such deal since the league lifted its ban on liquor ads in 2017. “What they’ve done from a responsibility standpoint to us, really stood head and shoulders above other spirit companies in the marketplace,” said Nana-Yaw Asamoah, vice president of business development and sponsorship for the NFL. “And that goes for their marketing standards, which hold themselves to a higher standard than the rest of the market, and kind of used it to inform our policies as we looked to advertising restrictions and opening up spirits in-game advertising in 2017.”

And GM said it is increasing spending on electric and autonomous vehicles to $35 billion through 2025, a 30% increase from plans announced late last year. The additional funds will be used to expand its rollout of EVs and accelerate production of its battery and fuel cell technologies, including two new battery plants in the U.S.—in addition to the two that are under construction—by 2025. “There are several growth engines in General Motors and we’re going to just keep pushing ahead and accelerating them like we’re doing today of announcing a faster pivot to EVs,” said GM CEO Mary Barra. “I really see long-term value creation for General Motors and for our shareholders.”

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Ampio Pharmaceuticals (OTC: AMPE): Ampio Pharmaceuticals announced yesterday that it has received regulatory approval to expand enrollment of its AP-019 Phase II study to India. The study with utilize inhaled Ampion to treat those suffering from respiratory distress due to COVID-19. “FDA approval to include study sites in India further illustrates the continued need for our therapy,” said Michael Macaluso, President and CEO of Ampio. “Currently, India is reporting an average of more than 3,200 daily deaths from COVID-19 and over 94,000 new cases per day. We expect this expansion to shorten the timeline for overall study enrollment and potentially assist one of the world’s highest density populations of COVID-19 infections.”

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