Brian Nick, Nuveen Chief Investment Strategist, joins "Closing Bell" to discuss the state of the markets.
Biotech stocks surged Friday after new details on a closely watched clinical trial lifted hopes that scientists may be close to a treatment for the coronavirus, which continues to maintain its foothold across the globe after emerging a little over three months ago.
The IBB, an ETF that tracks biotech’s biggest players, was up more than 2% Friday after health-care publication STAT News revealed early impressions from one of Gilead Sciences’ clinical trials for antiviral drug remdesivir. The University of Chicago found that patients with Covid-19 had “rapid recoveries in fever and respiratory symptoms” and were discharged in less than a week, according to STAT.
News that biotech firm Moderna received $483 million in federal funds for its vaccine development also boosted the sector higher.
While infectious disease experts caution against jumping to conclusions, saying the new details of the Gilead trial are purely anecdotal, retail investors are “hungry” for good news on the virus, analysts say. Those investors could be taking their hunger and channeling it into buying shares, they said.
“You could argue [Gilead] buyers are hungry for good news while Moderna buyers are starving for it,” said Mike Bailey, director of research at FBB Capital Partners and a former health-care analyst at Stifel.
There are no proven therapies to treat Covid-19, which has infected more than 2.1 million worldwide and killed at least 147,384 as of late Friday morning, according to data compiled by Johns Hopkins University.
Health officials say producing a vaccine to prevent the disease will take at least 12 to 18 months, making finding an effective drug treatment soon even more crucial as many businesses seek to reopen as early as next month.
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