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Wall Street jumps on hopes of potential coronavirus drug – Reuters

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(Reuters) – Wall Street jumped on Wednesday as Gilead Sciences gave an encouraging update on a potential COVID-19 treatment and upbeat earnings from Google-parent Alphabet boosted shares of other technology and internet giants.

FILE PHOTO: The floor of the New York Stock Exchange (NYSE) stands empty as the building prepares to close indefinitely due to the coronavirus disease (COVID-19) outbreak in New York, U.S., March 20, 2020. REUTERS/Lucas Jackson

Gilead (GILD.O) rose 4.8% after the drugmaker said its experimental antiviral drug remdesivir helped improve symptoms for COVID-19 patients who were given the drug early.

“The news on Gilead is really powering the market,” said Linda Duessel, senior equity strategist at Federated Hermes in Pittsburgh, Pennsylvania.

“While we wait for a vaccine, we are looking out for anything that will help us get back into society, and we’re all hanging on this data on a day-by-day basis.”

The three main indexes have recovered 30% from their mid-March lows, boosted by aggressive stimulus efforts and, more recently, on hopes of an economic revival as many U.S. states begin to relax lockdown measures.

Growth stocks such Facebook Inc (FB.O), Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O) and Netflix Inc (NFLX.O) gained between 2% and 6%, while Alphabet Inc (GOOGL.O) surged 8.6% as its quarterly report showed Google ad sales steadied in April.

The S&P 500 communication services sector index .SPLRCL jumped 4.6%, the most among the 11 major sub-indexes.

Boeing Co (BA.N) reported a loss for the second straight quarter, but its shares rose 3.7% after the planemaker said it would cut jobs and try to boost liquidity.

Analysts foresee a sharper decline in second-quarter earnings, with companies listed on the S&P 500 expected to record a 35.1% decline in profits following a 15% drop in the first quarter, according to Refinitiv data.

Meanwhile, markets shrugged off data that showed the U.S. economy contracted in the first quarter at its sharpest pace since the Great Recession, ending the longest expansion in history.

“The economic data is backward-looking and markets will continue to be forward-looking,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, NC.

Markets are trying to anticipate a resumption of economic activity in the short run and a vaccine in the medium term, he said.

At 10:18 a.m. ET the Dow Jones Industrial Average .DJI was up 422.64 points, or 1.75%, at 24,524.19, the S&P 500 .SPX was up 58.81 points, or 2.05%, at 2,922.20 and the Nasdaq Composite .IXIC was up 233.27 points, or 2.71%, at 8,841.01.

General Electric Co (GE.N) fell 1% after its industrial businesses took a $1 billion hit to cash flow in the first quarter and it warned the damage would worsen in the next.

All eyes will be on the policy statement by the Federal Reserve at the end of its two-day meeting at 2 p.m. EDT (1800 GMT). The policymakers are expected to keep their promise to do whatever it takes to support the world’s largest economy.

Advancing issues outnumbered decliners by a 6.70-to-1 ratio on the NYSE and a 4.25-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and no new lows, while the Nasdaq recorded 26 new highs and no new lows.

Reporting by C Nivedita Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Bernard Orr and Arun Koyyur

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Canadian major telcos effectively lock Huawei out of 5G build – ZDNet

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Image: Shutterstock

Canadian carriers Bell and Telus announced on Tuesday that each of them would not be continuing the use of Huawei equipment in their respective 5G networks, having signed deals with the Chinese giant’s rivals instead.

For Bell, it announced Ericsson would be supplying its radio access network. It added that it was looking to launch 5G services as the Canadian economy exited lockdown.

Bell, which in Febraury announced it had signed an agreement with Nokia, said it was maintaining the use of multiple vendors in its upcoming network, as it had for 4G.

“Ericsson plays an important role in enabling Bell’s award-winning LTE network and we’re pleased to grow our partnership into 5G mobile and fixed wireless technology,” said Bell chief technology officer Stephen Howe.

Meanwhile, the British Columbia-based Telus also chose to go with a combination of Ericsson and Nokia.

The company said it had spent CA$200 billion on its network since the turn of the century, and would part with a further CA$40 billion over the next three years to deploy its 5G network.

Both Bell and Telus had previously used Huawei equipment in their networks. In February, Telus told the Financial Post it would be using Huawei in its 5G network.

The third member of the Canadian major telco triumvirate — Rogers — said in January it would be using Ericsson equipment for its 5G rollout.

The decisions from Canada’s three major carriers now mean Huawei is increasingly isolated from 5G builds within the Five Eyes nations.

In Australia, Huawei has blamed its ban on supplying 5G equipment for a fall in its carrier business and net profit.

Huawei is also at the centre of the trade dispute between the United States and China, with Washington recently clamping down on Huawei’s semiconductor supply, with companies needing an export licence to sell to the Chinese giant.

Although not officially banned, Huawei has not made inroads in New Zealand after GCSB prevented Spark from using Huawei kit in November 2018.

Meanwhile in the United Kingdom, although it in January decided to limit the involvement of Huawei — restricting it to a 35% cap of all radio equipment and preventing the Chinese giant from supplying any equipment in the core of the network, as well as banning the use of Huawei equipment at sensitive locations such as nuclear sites and military bases — reports last month said that the decision would be reviewed.

Canada is also the centre of the furore involving the extradition of Huawei CFO Meng Wanzhou, following her arrest in December 2018.

Last week, the British Columbia Supreme Court ruled the extradition could proceed. CBC reported that the presiding judge ruled that the fraud that Meng has been accused of would be a considered a crime in Canada, as well as the United States.

Meng, the daughter of Huawei’s founder, is currently on bail where she is required to stay confined to one of her two Vancouver homes between 11pm and 6am. In the United States, Meng currently faces an indictment for allegedly misrepresenting Huawei’s ownership and control of its Iranian affiliate, Skycom, to banks, which breached UN, US, and EU sanctions.

Two Canadians, Michael Kovrig and Michael Spavor, who were detained by Chinese authorities soon after Meng’s arrest, recently clocked up 500 days in confinement.

“Not only are their conditions terrible but they are cut off from any meaningful connection and at this time of pandemic they seem to be even more remote,” former Canadian ambassador to China David Mulroney told The Globe and Mail.

“It’s a hostage-taking and the ransom demand is Meng Wanzhou.”

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Saudi Arabia And Russia Agree To Extend Production Cuts – OilPrice.com

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Saudi Arabia And Russia Agree To Extend Production Cuts | OilPrice.com

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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    Saudi Arabia and Russia have reached a preliminary agreement to extend the current level of the OPEC+ production cuts by one month, provided that the laggards in compliance ensure over-compliance going forward to compensate for flouting their quotas so far, OPEC sources told Reuters on Wednesday.  

    “Any agreement on extending the cuts is conditional on countries who have not fully complied in May deepening their cuts in upcoming months to offset their overproduction,” an OPEC source told Reuters.

    According to the original agreement reached in April, OPEC+ was to cut 9.7 million bpd in combined production for two months—May and June—and then ease these to 7.7 million bpd, to stay in effect until the end of the year. Then, from January 2021, the production cuts would be further eased to 5.8 million bpd, to remain in effect until end-April 2022.

    Despite weak compliance from OPEC in May, as per a Reuters survey, the market expects that the OPEC+ coalition is motivated enough to extend the 9.7-million-bpd cuts through July or August. 

    On Monday, reports emerged that the OPEC+ group could hold its June meeting this week, earlier than the initial plans to hold the teleconference on June 9 and 10.  Related: Petrobras Oil Stockpiles Are “Paradoxically” Low

    However, an earlier meeting is being held up by the fact that the leaders of the pact, Saudi Arabia and Russia, will be seeking assurances from all non-compliant members that they will over-comply going forward to compensate for the loose compliance in May, an OPEC delegate told Argus today. According to the delegate, there will be “no free ride” for non-compliant members in the OPEC+ deal. These producers likely include Iraq and Nigeria from OPEC and Kazakhstan from non-OPEC.

    OPEC’s second-largest producer and the biggest laggard in the output cuts, Iraq, said on Tuesday that it would further reduce production and that it remains committed to the OPEC+ pact.

    Oil prices retreated following the reports of a one-month extension, after earlier on Wednesday prices had hit nearly three-month highs, with Brent Crude breaking above $40 a barrel.   

    By Tsvetana Paraskova for Oilprice.com

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      Bank of Canada keeps key interest rate target on hold – CTV News

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      OTTAWA —
      The Bank of Canada kept its key interest rate target on hold as it said it believes the economy has avoided its worst-case scenario due to the pandemic.

      The central bank said Wednesday its target for the overnight rate will remain at 0.25 per cent.

      It said the impact of the pandemic on the global economy appears to have peaked, although uncertainty about how the recovery will unfold remains high.

      The bank said it believes Canada has avoided the most severe economic scenario painted that it painted in April, updating its GDP figures for the second quarter of the year.

      The central bank now expects GDP to decline between 10 and 20 per cent compared with the fourth quarter of 2019, down from the 15 to 30 per cent decline forecasted in April.

      In a statement announcing the rate decision, the central bank said it still expects the economy to resume growth in the third quarter.

      “Decisive and targeted fiscal actions, combined with lower interest rates, are buffering the impact of the shutdown on disposable income and helping to lay the foundation for economic recovery,” the statement said.

      The announcement comes on the first day of Tiff Macklem’s tenure as governor, taking over from Stephen Poloz whose seven-year term ended Tuesday.

      Macklem participated as an observer during deliberations by the bank’s governing council over the past few days, the statement says, adding that the new governor “endorses the rate decision and measures announced.”

      The bank also announced it was reducing the frequency of its term repo operations and purchases of bankers’ acceptances citing improvements in short-term funding conditions.

      Other programs to purchase federal, provincial, and corporate debt will continue unchanged, the bank says, but adds it could change tactics in response to economic conditions.

      “As market function improves and containment restrictions ease, the Bank’s focus will shift to supporting the resumption of growth in output and employment,” the statement says. “The Bank maintains its commitment to continue large-scale asset purchases until the economic recovery is well underway.”

      Economic reports continue this week with Statistics Canada’s look at the May jobs market scheduled for release Friday.

      This report by The Canadian Press was first published June 3, 2020

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