‘They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.’ — Warren Buffett

1. U.S. Further Tightens Huawei Restrictions — the Commerce Department said that it was restricting Chinese tech-giant Huawei’s access to foreign chips made using U.S. technology on the grounds that it could be used to spy on Americans. The new rule requires non-U.S. firms to get a special license to sell any chips, including off-the-shelf chips, made using U.S. technology to Huawei. A previous rule, imposed by the Trump administration on Huawei in May, was aimed largely at limiting the ability of Huawei’s HiSilicon unit from importing chips made by Taiwan Semiconductor Manufacturing using American chip-making technology. Huawei has already said it would stop making its top-end cellphone chip in mid-September because it can’t get the components. The new rule, which takes effect on Sept. 15, will further curtail Huawei’s ability to source parts for its products.
2. Democrats Nominate Joe Biden in Virtual Roll Call — Democrats formally made Joe Biden their presidential nominee, a role he has sought for more than three decades, capping a come-from-behind victory in the primaries he secured with a broad coalition of his party’s voters. The program included remarks from former Presidents Bill Clinton and Jimmy Carter, and former Secretary of State John Kerry, who was also the Democratic presidential nominee in 2004. “Our party is united in offering you a very different choice: a go-to-work president,” Clinton said.
3. Regeneron and Roche Team Up on Antibody Treatment — Regeneron Pharmaceuticals is partnering with rival drug maker Roche Holding to develop and manufacture Regeneron’s experimental Covid-19 antibody treatment. The treatment, which has not yet been approved by the Food and Drug Administration, is based on a cocktail of two antibodies that neutralize the virus in a manner similar to the way HIV and hepatitis C drug cocktails work. The cocktail is being tested as a treatment for people already infected with the virus and as a prophylactic for those likely to be exposed to the virus, such as front-line health care workers. It is currently in final Phase II/III human trials. In related news, the FDA has delayed an emergency use authorization for a Covid-19 treatment that uses blood plasma of recovered Covid-19 patients after top health officials concluded that clinical trials failed to show it worked.
4. FDA Authorizes Convalescent Plasma for Covid-19 Use — the FDA called an emergency-use authorization, permits use of the treatment on hospitalized Covid-19 patients. For Covid-19 patients and the doctors who treat them, the designation opens up the possibility for faster and easier access to a promising treatment. But the FDA said more clinical studies are necessary for definitive proof of the therapy’s effectiveness. Doctors have been looking for validated coronavirus treatments. Until now, only one other drug, remdesivir from Gilead Sciences Inc., has the FDA’s emergency-use OK. Hospitalized patients who received the plasma within three days of diagnosis, are under the age of 80 and not on mechanical ventilation, benefited the most, with a 35% improvement in survival 30 days after receiving the transfusion compared with patients who got plasma with low antibody levels, according to Dr. Marks.

The week ahead — Economic data from Econoday.com:

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“Maybe they’ll get more overvalued. I think that’s the argument for being long today is that …continued overvaluation and [they can] get even more so. But they’re overvalued and this is the setup up for left tail events in stock markets,” — trader Mark Spitznagel

1. Trump Authorizes Extending Special Unemployment Benefit at $400 a Week — President Trump directed the federal government Saturday to provide $300 a week in additional payments to the unemployed and called on states to fund an extra $100 in weekly benefits. The measure was one of four the president signed to extend coronavirus aid after negotiators for the White House and Democrats in Congress failed to reach an accord. The order signed by Mr. Trump authorized states to pay $400 a week in added benefits, but only funded 75% of that. It was uncertain how states would respond. Many have seen revenues fall amid fallout from the pandemic and have asked Congress for help to avoid cuts to services and more layoffs of first responders.
2. Joe Biden Picks Kamala Harris as Running Mate — Joe Biden named Sen. Kamala Harris of California as his running mate, picking his former Democratic primary opponent to be the first Black woman nominated for vice president by a major party. Harris, 55, is the first Black woman and the first person of Indian descent ever nominated for national office by a major political party.
3. Weekly Jobless Claims Drop Below One Million for First Time Since March — New applications for unemployment benefits dropped to seasonally adjusted 963,000 in the week ended Aug. 8, the Labor Department reported. Claims are down significantly from a peak of near seven million in March, but remain at historically high levels and higher than the pre-pandemic record of 695,000. President Trump signed an executive action Saturday that authorized states to extend a federally funded $300 in benefits and provide an extra $100 in state-funded benefits. States likely won’t start implementing the supplemental benefits for weeks, as they must apply for the federal funds and set up new programs.
4. Retail Sales Point to a Rocky Economic Recovery — Total retail sales rose a seasonally adjusted 1.2% last month from June, the Department of Commerce said Friday. That follows month-over-month gains of 8.4% and 18% in the preceding months, after retail sales plummeted 15% in April. Excluding more volatile categories like gasoline, motor vehicles and building materials, retail sales rose 1.4% in July, better than economists’ 1.1% estimate but slower than the 6% and 10% rates in June and May. Gains were strongest at electronics and appliance stores (up 23% from a month earlier), while sales at gas stations and clothing stores rose 6% and restaurant and bar sales increased 5%.

The week ahead — Economic data from Econoday.com:

There will not be any re-cap for the week of August 7 2020 due to power outages.
Have a good week.

The week ahead — Economic data from Econoday.com:

“The process of intelligently building a portfolio consists of buying the best investments, making room for them by selling lesser ones, and staying clear of the worst.” – Howard Marks

1. Violence Erupts Around Protests Across U.S. — large demonstrations turned violent around the country over the weekend as tens of thousands of Americans continued a monthslong wave of civil unrest protesting racism and police tactics. Police officials in Portland and Seattle declared some demonstrations in their cities “riots” and used pepper spray and other crowd-control tools to disperse gatherings. President Trump sent federal agents to Portland earlier this month and is now sending federal resources into other cities to quell protests and suppress surges in crime.
2. Trump Administration to Halt New DACA Applicants — the Trump administration announced rollbacks of an Obama-era program that benefited immigrants who have lived in the U.S. illegally since childhood, including a prohibition on new applicants. The administration had been hinting for weeks that it would again move to end DACA, but it chose not cancel the program entirely right now for fear that a rush to do so would run afoul of the Supreme Court’s instruction to take a more considered approach.
3. AMC, Universal Agree to Trim Theatrical Window Before Movies Go Online — under the deal, the “theatrical window” will shorten to 17 days, from the current 75, at least when it comes to movies made by Comcast Corp. ’s Universal that play at AMC theaters, the world’s biggest movie-theater chain. That means that instead of waiting 2½ months to watch a new movie at home, viewers will be able to see at least some titles just 2½ weeks after they premiere in theaters. Movie theaters have long considered it essential for their businesses to be able to play movies exclusively before consumers can watch them other ways.
4. 2Q GDP Contracted at Record Rate Last Quarter — the Commerce Department reported U.S. gross domestic product—the value of all goods and services produced across the economy—fell at a 32.9% annual rate in the second quarter, or a 9.5% drop compared with the same quarter a year ago. Both figures were the steepest in records dating to 1947. A surge in virus infections since mid-June appears to be slowing the recovery in some states, according to some private-sector real-time data.
5. Sanofi, GlaxoSmithKline Ink Coronavirus Vaccine Deal With U.S. — the U.S. government will pay up to $2.1 billion to Sanofi and GlaxoSmithKline to fund the development of a coronavirus vaccine and guarantee supply of 100 million doses, if proven safe and effective in clinical trials. The contract is the latest in a series of deals—potentially worth more than $8 billion—struck by the U.S. government aimed at accelerating development of Covid-19 vaccines and securing large supplies before potential product approvals.
The U.S. has reached deals worth over $1 billion each with vaccine makers including Pfizer Inc. and partner BioNTech SE, AstraZeneca PLC and its partner the University of Oxford, and Novavax Inc., a biotech company in Gaithersburg, Md. Each of the deals guarantees the U.S. 100 million doses or more, if the vaccines are approved by regulators.

The week ahead — Economic data from Econoday.com: