The S&P index of top health care companies on Monday closed higher than it had opened for the year, erasing some of the losses recorded in 2020—even as the World Health Organization warned that the new coronavirus pandemic is worsening.
US Covid-19 cases rise in 14 states
According to a Wall Street Journal analysis of data on new coronavirus infections in the United States collected by Johns Hopkins University, over the past week, more than a dozen states saw their daily growth rates of newly reported cases accelerate.
Over the past eight days, 14 states—Alaska, Arizona, Arkansas, California, Florida, Kentucky, New Mexico, North Carolina, Mississippi, Oregon, South Carolina, Tennessee, Texas, and Utah—and Puerto Rico have reported their highest seven-day averages of newly reported infections from the new coronavirus since the country's epidemic first began, the Washington Post reports.
Across the country, officials as of Tuesday morning reported 1,970,600 cases of Covid-19, the disease caused by the new coronavirus—up from 1,953,100 cases as of Monday morning.
As of Tuesday morning, U.S. officials also had reported a total of 110,966 U.S. deaths linked to the new coronavirus—up from 110,422 deaths reported as of Monday morning.
WHO warns coronavirus pandemic is worsening
WHO on Monday warned other countries also are seeing upticks in newly reported cases of infection from the new coronavirus. According to WHO, officials reported the highest single-day increase in newly reported cases of the new coronavirus worldwide on Sunday, at 136,000 new cases. The total number of reported cases of infection from the new coronavirus surpassed seven million on Monday.
WHO urged countries to continue implementing measures to contain the new coronavirus' spread, noting that the global number of new cases of infection and deaths related to the virus has continued to rise. WHO Director General Tedros Adhanom Ghebreyesus said, "More than six months into the pandemic, this is not the time for any country to take its foot off the pedal."
Stock market index regains 2020 losses
The new coronavirus' spread in America and throughout the world has had severe economic effects and caused particular volatility in global stock markets. However, as the United States and other countries in recent weeks began reopening nonessential businesses and lifting stay-at-home orders aimed at containing the virus' spread, investors have become optimistic that the global economy may be on the road to recovery.
On Monday, the S&P index closed higher than it had opened for the year, erasing some of the losses it saw earlier this year as a result of financial constraints caused by pandemic. Since March 23, both the S&P 500 index and the Nasdaq composite index each have increased by 45%, while the Dow Jones industrial average has increased by 48%. The Nasdaq composite index closed at a record high on Monday, the New York Times reports.
According to Axios' "Vitals," investors appear to have an especially positive outlook for the health care industry, with the industry's stocks remaining nearly unharmed since the pandemic first began affecting the markets. "Vitals" reports that, among the 109 publicly traded health care companies that Axios tracks, reported profits during the first quarter of this year exceeded $50 billion, representing a 7.4% profit margin.
According to "Vitals," drugmakers and insurers saw the highest returns, as pharmaceutical companies in particular could benefit from the need for a vaccine against the new coronavirus and treatments for Covid-19. For instance, "Vitals" reports that Gilead Sciences' stock price is up by 18% so far this year, which is partly due to investors' expectations that the company's drug remdesivir, which is being tested as a potential treatment for Covid-19, will generate billions of dollars in revenue.
But some observers are warning that investors might be overly confident that the economy will rebound quickly.
Byron Wien, a longtime market observer and vice chair of the private wealth group at Blackstone, said, "Right now the market thinks we'll have a V-shaped recovery and a vaccine by the end of the year and I think both of those views are too optimistic."
Leon Cooperman, founder of the hedge fund Omega Advisors, said, "I understand fully the recovery in the market, I just think it's ahead of schedule … because of the government's policy of giving out free money," referring to the trillions of dollars the Federal Reserve and federal government have pumped into the economy and markets over the past few months.
According to "Vitals," it's possible that some companies might report lower profits in the second quarter of this year, which is when the pandemic started to significantly affect business operations throughout the United States (Wall Street Journal, 6/9; Bellware/Dupree, Washington Post, 6/8; Nebehay/Farge, Reuters, 6/8; New York Times, 6/9; Fernandez, Axios, 6/8; Sullivan, The Hill, 6/8; WHO report, accessed 6/9; Phillips, New York Times, 6/8; AP/CBS News, 6/9; Owens, "Vitals," Axios, 6/9; Phillips, New York Times, 6/9; New York Times, 6/9).