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The Federal Reserve has grown more optimistic about the US economy but still cites the risks that remain.
Jerome Powell, Fed chair, said that the Federal Reserve was not yet ready to discuss tapering its massive program of asset purchases. The Fed currently buys $120 billion worth of government bonds a month.
The Fed continued to say that the path of the US economy would “depend significantly on the course of the virus.” And it said that the public health crisis created “risks” to the economic outlook.
In March, it had described the pandemic risks as “considerable.” But that adjective did not appear in Wednesday’s statement.
The Fed has set a high bar for starting to reduce the pace of its asset purchases. It says that “substantial further progress” would have to be made toward its goals of full employment and 2% inflation on average over time.
The U.S. labor market is still 8.4 million jobs short of its pre-pandemic employment levels.
Powell’s words about the US economy – together with great earnings from Big Tech – may give stocks the boost needed to resume the rally.
The Big News
Single Covid Vaccine Dose Cuts Risk of Household Transmission 50%
A single dose of a vaccine against Covid-19 can cut the risk of passing the disease on to household members by up to half. This was the finding of the most comprehensive real-world study into post-immunization transmission risk. The UK study showed that those who do become infected three weeks after receiving a first dose of the BioNTech/Pfizer or Oxford/AstraZeneca vaccines were between 38% and 49% less likely to pass the virus on to household members than those who were unvaccinated.
Pfizer & Moderna Vaccines 94% Effective in Seniors
The Pfizer/BioNTech and Moderna coronavirus vaccines are 94% effective at preventing hospitalization in fully vaccinated adults 65 or older. This is according to a small study released by the CDC on Wednesday. The findings (which are consistent with clinical trial results) are the first real-world evidence from the U.S. that the vaccines protect against severe Covid-19. Older adults are at the highest risk of hospitalization and death from the disease.
CDC “Committed” to Cruise Industry
The CDC says it is “committed” to the resumption of cruise industry passenger operations in the country by midsummer. So, on Wednesday, it announced new steps to speed approvals. The CDC said that if a ship shows that 98% of its crew and 95% of its passengers are fully vaccinated, that ship may move directly to open water sailing.
US Aid to Covid Hotspot – India
The U.S. is sending supplies worth more than $100 million to India to help it fight a record surge of Covid-19 cases. It reported 379,000 new cases in the last day. The supplies include 1,000 oxygen cylinders, 15 million N95 masks and 1 million rapid diagnostic tests. The U.S. has also redirected its own order for AstraZeneca materials to India.
Scientists Find Human-to-Cat Covid Transmission
Two cases of human-to-cat transmission of coronavirus have been identified by researchers. Scientists from the University of Glasgow found the cases of Sars-CoV-2 transmission as part of a screening program of the cat population in Britain. Researchers believe both pets were infected by their owners, who had Covid-19 symptoms before the cats became ill. Scientists say pets could potentially act as a “viral reservoir” allowing continued transmission.
The Coronavirus Numbers
Here are the numbers from Thursday at 8 a.m. ET from Johns Hopkins University:
- 148,718,851 Infected Worldwide
- 1,064,525,975 Vaccines Given Globally
- 3,153,418 Deaths
- 32,230,809 Infected in the U.S.
- 234,639,414 U.S. Vaccine Doses Administered
- 574,330 Deaths in the U.S.
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What’s Next
U.S. economic activity boomed to start 2021. U.S. GDP jumped 6.4% in the first quarter on an annualized basis. Outside of the third quarter of 2020, it was the best period for GDP since the third quarter of 2003.
It looks like vaccinations and government stimulus helped get the U.S. closer to where it was before the Covid-19 pandemic struck.
All this should be a green light for stocks. But the markets have been wary of moving higher lately. However, blowout tech earnings numbers from Apple and Facebook have futures pointing to solid gains for Wall Street today.
Apple reported another stunning quarter, with sales soaring from last year. Apple revenues grew more than 50% year-on-year, with total sales of $89.58 billion. At all levels analysts expect Apple to outperform even bullish expectations. The core iPhone business saw sales up 65% to $47.94 billion vs. $41.43 billion estimated. Shares rose 2.5% in the after-hours market. A really exceptional quarter – it’s not a surprise that Apple exceeded quite a low bar. But it’s noteworthy just by how much.
Facebook shares advanced 8.25% in after-hours trading as the company reported posted forecast-beating revenues and earnings. Earnings per share came in at $3.30 vs $2.37 expected on revenues of $26.17 billion. Revenues were about $3 billion more than expected and up 48% on a year before. Average revenues per user came in at $9.27 vs. $8.40 expected.
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Yours in Health & Wealth,
Tony Daltorio