The Depart­ment of Jus­tice is clos­ing inves­ti­ga­tions into three US sen­a­tors accused of trad­ing stocks based on priv­i­leged coro­n­avirus brief­ings right before the mar­ket tanked due to pan­demic, how­ever a fourth inves­ti­ga­tion into Sen. Richard Burr will con­tinue, accord­ing to the Jour­nal, cit­ing peo­ple famil­iar with the matter.

Defense attor­neys for Repub­li­can Sen­a­tors James Inhofe (OK) and Kelly Loef­fler (GA), as well as Demo­c­rat Dianne Fein­stein (CA) were noti­fied by pros­e­cu­tors on Tues­day that they are clos­ing inves­ti­ga­tions into their trades.

All of the law­mak­ers denied wrong­do­ing — with Inhofe and Loef­fler say­ing their finan­cial advis­ers made the trades which they had no knowl­edge of until after the fact.

The FBI began inves­ti­gat­ing the trades two months ago after law­mak­ers learned of the threat of coro­n­avirus dur­ing closed-​door brief­ings. In some cases, the trades saved law­mak­ers up to hun­dreds of thou­sands of dol­lars in losses as stocks tanked into mid-​March.

Burr, mean­while, has tem­porar­ily stepped down as Chair­man of the Sen­ate Intel­li­gence Com­mit­tee. The FBI seized the cell phone of the North Car­olina Repub­li­can, who had more of a direct involve­ment in his trades.

Sum­mary:

• US crosses 100k deaths (100,269)
• US cases climb 1.1%, slow­est since March
• LA opens largest test­ing site at Dodgers stadium
• New­som says bar­ber­shops, hair salons can reopen
• Canada reports another 103 deaths
• Macron launches French auto bailout
• Italy now report­ing 230,555 cases
• Florida reports 7 new deaths, 424 new cases
• NJ reports 54 deaths, 703 new cases; says sports teams can soon resume prac­tice, high schools can hold out­door graduations
• NYSE floor trad­ing reopens
• Global COVID-​19 cases top 5.5 mil
• Mon­tene­gro now ‘coronavirus-​free’
• Tory junior min­is­ter resigns over Cum­mings scandal
• UK nears 50k deaths
• UK plans to reopen car showrooms
• US death toll: 99,800
• Merck buys Aus­trian biotech company
• Novo­vax announces start of human trial in Australia
• CDC esti­mates infec­tion mor­tal­ity rate at less than 0.3%
• Mil­lions of Wuhan res­i­dents tested over past week
• Ger­many to lift travel warn­ings on June 15

* * *

Update (1604ET):As Bloomberg con­firms that US cases climbed just 1.1% over the past 24 hours with fewer than 20k cases reported for a sec­ond day, the slow­est climb since March, as the out­break across the US con­tin­ues to slow (despite what the New York Times would have read­ers believe)…

…Johns Hop­kins has con­firmed that the US has passed a grim mile­stone: More than 100,000 con­firmed deaths. The lat­est total: 100,269.

Since the begin­ning of the out­break, while the num­ber of new cases reported daily has fluc­tu­ated as out­breaks have waxed and waned…

…the rate of increase (mea­sured in per­cent­age points daily) has slowed dramatically.

* * *

Update (1530ET): Con­trary to an ear­lier announce­ment by his Depart­ment of Health, Cali Gov Gavin New­som announced dur­ing his daily brief­ing on Tues­day that he would allow some bar­ber­shops and hair salons in cer­tain coun­ties to reopen immediately.

TUNE IN for a #COVID19 update. https://t.co/XkdmKWryyQ

— Gavin New­som (@GavinNewsom) May 26, 2020

Here’s more from Newsom’s twitter.

Scenes from this week­end:

Pray­ing I don’t end up look­ing like Gov. Exotic 😳 ✂️ pic​.twit​ter​.com/​r​S​P​y​M​9​8​4​Q​H

— Gavin New­som (@GavinNewsom) May 26, 2020

CA #COVID19 UPDATE:

Over the last 14 days, CA has seen:
– 6.7% decline in hos­pi­tal­iza­tions.
– 0.6% increase in the num­ber of ICU patients.

CA is flat­ten­ing the curve. Expand­ing test­ing. And care­fully re-​opening busi­nesses. But we MUST con­tinue to take this seriously.

— Gavin New­som (@GavinNewsom) May 26, 2020

* * *

Update (1450ET): As total deaths in the state approach 4k, while total cases approach 100k, Cal­i­for­nia health offi­cials announced on Mon­day that — sub­ject to approval by county pub­lic health depart­ments (mean­ing every­where but the Bay Area) all retail stores can reopen for in-​store shop­ping, so long as they observe pre­vi­ously issued social dis­tanc­ing guide­lines for retail­ers in parts of the state that have already been allowed to reopen.

The exist­ing guid­ance for retail­ers, which had applied just to those coun­ties approved for wider reopen­ing, now applies statewide. Retail can open for in-​store shop­ping through­out Cal­i­for­nia. Note: Retail does not include per­sonal ser­vices such as hair salons, nail salons and bar­ber­shops, as the LAT reports.

As test­ing capac­ity ramps up across the coun­try, the city of LA has opened its largest coro­n­avirus test­ing site yet at Dodger Sta­dium. Up to 6,000 peo­ple can be tested daily, begin­ning Tuesday.

“This builds on our work we’ve been doing [over the] past weeks and months,” said Mayor Eric Garcetti dur­ing a news con­fer­ence, shortly after being one of the first peo­ple tested at the new site. “We want test­ing to be easy, acces­si­ble and free for every­body here in Los Angeles.”

The drive-​through facil­ity will have big screens show­ing videos demon­strat­ing how to admin­is­ter a self-​test to help pre­pare those wait­ing in line. The city is part­ner­ing with the Los Ange­les Fire Depart­ment and the Com­mu­nity Orga­nized Relief Effort, a non­profit co-​founded by Sean Penn, which will over­see oper­a­tions and have 60 staffers helping.

About two months ago, Dodgers Chief Exec­u­tive Stan Kas­ten said 40,000 peo­ple had been tested at a site already oper­at­ing at the sta­dium. With this new under­tak­ing, Kas­ten said, more peo­ple can be tested in one week than in the 10 pre­vi­ous weeks combined.

“This is how we come back,“he said.

* * *

Update (1220ET):Canada has just released its lat­est fig­ures for Tues­day. It counted 103 new deaths across the coun­try, and just 895 new cases. That brought its death toll to 6,556 and its case total to 85,998.

Italy just reported its num­bers, includ­ing just 397 new cases and 78 deaths, the third straight ses­sion where deaths were below 100.

In total, Italy is now count­ing 230,555 cases and 32,955 deaths.

Before we go, an inter­est­ing pattern:

Coro­n­avirus suc­cess sto­ries:

– South Korea
– Ger­many
– Nor­way
– Ice­land
– Den­mark
– Fin­land
– New Zealand

Six of these coun­tries led by women.

— Nor­bert Elekes (@NorbertElekes) May 26, 2020

In other news, French Pres­i­dent Emmanuel Macron on Tues­day unveiled an €8 bil­lion plan to revive France’s car indus­try, which has been crip­pled by the pan­demic and the lock­downs. Per the FT, the plan includes increased sub­si­dies for buy­ers of elec­tric or hybrid cars and sup­port for research into hydro­gen power. It’s aimed at ensur­ing that the country’s auto­mo­tive assem­blers and sup­pli­ers sur­vive the cri­sis so the gov­ern­ment can help them “relo­cal­ize” man­u­fac­tur­ing and “make France the lead­ing coun­try in Europe for the pro­duc­tion of clean vehi­cles”, with an out­put tar­get of 1 mil­lion a year by 2025.

* * *

Update (1140ET): The NYT has been harp­ing non-​stop on the fact that nearly a dozen states have reported an uptick in cases since they started rolling back restric­tions, only rarely men­tion­ing that a com­men­su­rate rise in test­ing capac­ity was often enough to explain these increases, and that pub­lic health offi­cials in these states expected cases to rise in the near term as peo­ple started inter­act­ing in pub­lic again.

In Florida on Tues­day, the Florida Depart­ment of Health reported 424 new cases over the last 24 hours, bring­ing the states total con­firmed cases to 52,170. Mean­while, the num­ber of reported deaths increased by just 7 to 2,259.

The total statewide num­ber of patients hos­pi­tal­ized with the virus is just 9,482, though the Depart­ment of Health noted that this fig­ure does not reflect the num­ber of COVID-​19 patients cur­rently in hos­pi­tals, accord­ing to the News-​Press of South­west Florida.

New Jer­sey, which has reopened much more slowly than Florida, just reported a 1,500-patient drop in hos­pi­tal­iza­tions over the past 2 weeks.

LOOK: Our hos­pi­tals cur­rently have 2,723 patients being treated for #COVID19 – a decrease of nearly 1,500 over the past two weeks.

Our Field Med­ical Sta­tions reported 45 patients. pic​.twit​ter​.com/​e​2​T​b​g​P​W​V​7​E

— Gov­er­nor Phil Mur­phy (@GovMurphy) May 26, 2020

Mean­while the state reported just 54 deaths on Tuesday…

Sadly, we’ve lost another 54 mem­bers of our New Jer­sey fam­ily to #COVID19 related com­pli­ca­tions, bring­ing our statewide total to 11,191.

We can­not fail the mem­o­ries of those we’ve lost to this virus by need­lessly putting the lives of oth­ers in dan­ger. pic​.twit​ter​.com/​u​7​8​J​C​O​K​8​O​x

— Gov­er­nor Phil Mur­phy (@GovMurphy) May 26, 2020

…and just 703 cases.

NEW: We’ve received 703 new pos­i­tive #COVID19 test results, bring­ing our statewide total to 155,764.

Given that this was a major hol­i­day week­end, it may be a few more days for these num­bers to smooth out.

The spot pos­i­tiv­ity rate for tests from May 21^st is 5 per­cent. pic​.twit​ter​.com/​7​z​d​d​E​R​Y​5​H​z

— Gov­er­nor Phil Mur­phy (@GovMurphy) May 26, 2020

As Gov Mur­phy said dur­ing his press brief­ing, the state has made huge progress and has unques­tion­ably flat­tened the curve. Addi­tion­ally, the gov­er­nor said schools can reopen for out­door grad­u­a­tion send­offs, and also said pro­fes­sional sports teams in the state could soon begin prac­tic­ing again.

* * *

Update (0820ET): A few weeks ago, Slove­nia became the first Euro­pean nation to announce zero new coro­n­avirus cases. Now, nearby Mon­tene­gro has declared the coun­try “coronavirus-​free”.

Coronavirus-​free means zero active cases.

Slove­nia has declared the end of epi­demic ear­lier, but they still have active cases. https://t.co/1lwHOOnnq6

— Nor­bert Elekes (@NorbertElekes) May 26, 2020

An edi­tor at Insider tweeted that the sus­pi­ciously low num­ber of deaths reported yes­ter­day might have been the result of “under­re­port­ing” related to hol­i­day week­ends in the US, UK and Brazil. A bounce­back this week wouldn’t be a surprise.

Big pic­ture: Just 1,179 deaths reported world­wide yes­ter­day. That’s incred­i­bly low, see the chart. It’s espe­cially promis­ing because the num­ber of detected cases is still going up. pic​.twit​ter​.com/​P​L​Q​O​E​W​6​Q​e​U

— Jim Edwards (@Jim_Edwards) May 26, 2020

Hold the cham­pagne: There were pub­lic hol­i­day week­ends in the US, UK and Brazil which will have led to under­re­port­ing.

Expect a bounce­back this week.

— Jim Edwards (@Jim_Edwards) May 26, 2020

* * *

US equity futures pointed to a sharp jump at the open on Tues­day, with the Nas­daq eying a return to the old highs, as traders cel­e­brated the return of floor traders to the New York Stock Exchange as a sym­bol of the resilience of the cap­i­tal­ist sys­tem — or maybe it was the lat­est sus­pi­ciously pre­lim­i­nary vac­cine news.

Two days after the NYT pub­lished the names of Amer­i­can coro­n­avirus dead on the front page of its Memo­r­ial Day Week­end edi­tion in solemn remem­brance of the 100k mile­stone, the US still hasn’t actu­ally crossed the thresh­old. Vir­ginia became the lat­est state to report a one-​day record jump in new cases over the week­end after the US saw a jump in cases and a slight uptick in hos­pi­tal­iza­tions last week.

Experts expected a jump in cases and hos­pi­tal­iza­tions as states adjusted to the first few weeks of ‘Phase 1′ reopen­ing. Most hope that a ‘sea­sonal effect’ will help off­set the increase in social interaction

An uptick in new cases was expected, due to the inevitable increase in inter­ac­tions as restric­tions are lifted. States have also expanded test­ing access as they’ve loos­ened restrictions.

With Brazil and Rus­sia still account­ing for ~1/​5^th of all new cases reported on Mon­day, the global total num­ber of con­firmed cases has bro­ken above 5.5 mil­lion, though many experts believe the roughly 330k con­firmed cases in Brazil rep­re­sents just a quar­ter of the total infec­tions in the country.

I haven’t com­mented pub­licly on the sit­u­a­tion with Dominic Cum­mings as I have waited to hear the full details. I wel­come the state­ment to clar­ify mat­ters, but there remains aspects of the expla­na­tion which I have trou­ble with. As a result I have resigned as a gov­ern­ment Min­is­ter. pic​.twit​ter​.com/​6​y​X​L​y​M​z​I​t​J

— Dou­glas Ross MP (@Douglas4Moray) May 26, 2020

as we noted ear­lier, over the week­end, the CDC released its first offi­cial esti­mate of the over­all infec­tion fatal­ity rate (IFR). The num­ber? Just 0.26% — a full 3.2 per­cent­age points below the WHO’s offi­cial esti­mate of 3.4%. The CDC also esti­mated the rate of “asymp­to­matic” infec­tion (patients who showed few or no symp­toms) at 35%.

I NYC alone, 0.3% of all city res­i­dents have died from the virus (more than 30k have died in the US alone). “Accord­ing to some sur­veil­lance stud­ies using anti­body tests, roughly a quar­ter of NYC res­i­dents have been infected. This would sug­gest the mor­tal­ity rate might be closer, or just above, 1%, but still well below the WHO num­ber that unleashed a wave of pan­icked lock­downs across the world.

Source: Worl­doMe­ter

To be sure, roughly 50% of deaths across the US have occurred in nurs­ing homes. This alarm­ingly high rate is due in part to cer­tain Demo­c­ra­tic gov­er­nors insti­tut­ing obvi­ously dan­ger­ous poli­cies allow­ing COVID-​19-​positive patients to be returned to the managed-​care facil­i­ties where they lived. Some have sug­gested that bet­ter pro­tect­ing the most vul­ner­a­ble patients might greatly mit­i­gate the mor­tal­ity rate. But we digress…

As the WHO warns that the world remains mired in the ‘first wave’ of the out­break, the AP reported Tues­day that states are scram­bling to spend bil­lions of dol­lars on PPE and med­ical sup­plies to replen­ish depleted stock­piles. But more than 2 months into the sup­ply scram­ble, few states are shar­ing infor­ma­tion about what they’re buy­ing and how much they’re pay­ing (remem­ber, reports about states and cities being swin­dled have pro­lif­er­ated dur­ing the cri­sis). While many states have obscured their spend­ing, Illi­nois has released a detailed data­base that can be accessed by the public.

With the US inch­ing ever-​closer to the 100k fatal­ity mark, the UK’s Depart­ment of Health and Social Care said the coun­try had sur­passed 47,000 deaths on Tues­day, com­ing ever-​closer to the 50k mark which Boris Johnson’s gov­ern­ment had once said would be a ‘worst-​case’ sce­nario for the out­break. Mean­while, Tory Junior min­is­ter Dou­glas Ross resigned on Tues­day, say­ing Dominic Cum­mings’ inter­pre­ta­tion of the lock­down guide­lines weren’t shared by the major­ity of Britons.

As the UK plods through an extremely grad­ual reopen­ing, John­son revealed on Tues­day that HMG plans to allow car show­rooms and out­door mar­kets to reopen on June 1, while allow­ing all non-​essential retail to open from June 15.

The ONS said 42,173 peo­ple had died in Eng­land and Wales with sus­pected COVID-​19 as of May 15, bring­ing the UK total to 47,343 — which includes ear­lier data from Scot­land, North­ern Ire­land, plus recent hos­pi­tal deaths in Eng­land, Reuters reports. Chat­ter about John­son being “replaced” — not unlike his pre­de­ces­sor, Theresa May — as Tories begin to see him as a lia­bil­ity has intensified.

As scrutiny of the EU’s pay­check sub­si­dies inten­si­fies, the bloc’s global cam­paign to fund the devel­op­ment of vac­cines and ther­a­pies against COVID-​19 has so far raised $10.4 bil­lion, accord­ing to Euro­pean Com­mis­sion Pres­i­dent Ursula von der Leyen.

On Tues­day, as images of packed Ozark beaches lin­gered in the minds of Amer­i­cans, the WHO warned of the risks of an “imme­di­ate sec­ond peak” as Europe, the US and oth­ers ease up on lock­down con­di­tions, while urg­ing coun­tries to step up sur­veil­lance, test­ing and tracking.

After a flurry of over­hyped reports about var­i­ous vac­cine tri­als, Phar­ma­ceu­ti­cal giant Merck — which has “largely kept to the side­lines” of the vac­cine race accord­ing to Reuters — has unveiled plans to buy privately-​held Aus­trian vac­cine maker Themis Bio­science. Merck also said it plans to col­lab­o­rate with research non­profit IAVI to develop two sep­a­rate vaccines.

Merck also announced a part­ner­ship with privately-​held Ridge­back Bio­ther­a­peu­tics to develop “an exper­i­men­tal oral antivi­ral drug” to help patients infected with the virus.

Maryland-​based biotech firm Novo­vax announced early Tues­day that it had begun inject­ing its exper­i­men­tal coro­n­avirus vac­cine can­di­date into test sub­jects in Aus­tralia on Tues­day, CNBC reports.

The com­pany hopes to release a vac­cine by the end of the year if its early stud­ies find suc­cess. Novavax will inject 131 vol­un­teers in the first phase of the trial test­ing the safety of the vac­cine and look­ing for signs of its effec­tive­ness, the company’s research chief Dr. Gre­gory Glenn said. At this point, roughly a dozen exper­i­men­tal vac­cines are in early stages of test­ing, or are poised to start in the near future; most of these are based in China, the US and Europe.

“We are in par­al­lel mak­ing doses, mak­ing vac­cine in antic­i­pa­tion that we’ll be able to show it’s work­ing and be able to start deploy­ing it by the end of this year,” Glenn told a vir­tual news con­fer­ence in Mel­bourne from Novavax’ head­quar­ters in Maryland.

After releas­ing its first test­ing update on Fri­day, Wuhan, the epi­cen­ter of China’s coro­n­avirus out­break, affirmed on Tues­day that it has tested nearly seven mil­lion peo­ple in 12 days,con­clud­ing a cam­paign to test the entire pop­u­la­tion after sev­eral infec­tions prompted fears of a sec­ond wave. And as Bei­jing scram­bles to test mil­lions in Wuhan and China’s north­east­ern Jilin Province, Tai­wan on Tues­day announced plans to lift its coronavirus-​related restric­tions on mass gath­er­ings and the sale of masks next month as China’s ‘way­ward province’ has nearly stamped out the virus.

As more Euro­pean nations lift, or plan to lift, lim­i­ta­tions on inter-​EU travel, Ger­many said Tues­day it plans to lift travel warn­ings for 31 Euro­pean coun­tries per June 15, DPA reports, cit­ing a gov­ern­ment draft.

On seem­ingly every cable news chan­nel, pun­dits are bemoan­ing the ‘politi­ciza­tion’ of the coro­n­avirus pan­demic. While their con­clu­sion is typ­i­cally to blame the pres­i­dent, we sus­pect there might be another rea­son why it some­times seems like red states and blue states are expe­ri­enc­ing dif­fer­ent ver­sions of the same reality.

Because they, effec­tively, are.

US equity mar­kets roared higher overnight on sev­eral vaccine-​related head­lines (but repeated China sanc­tions head­lines — espe­cially at the close, took the shine off the ball, espe­cially for tech stocks)…

Shrug­ging off Gilead’s Remde­sivir “sta­tis­ti­cally insignif­i­cant” results and Moderna’s real­ity checks in favor of Merck and Novavax…

NOTE — Mod­erna is now 20% below its sec­ondary offer­ing levels.

Novavax soared early on the back of an announce­ment that it was plan­ning on start­ing a phase 1 trial in Aus­tralia… no results at all… But the mar­ket didn’t hold all those gains…

It appears Dr.Fauci’s opti­mism was unfounded… just as his pes­simism was too…

Of course, US equity mar­kets are not alone in their irra­tional­ity. Noth­ing says bid the yuan like Wash­ing­ton threat­en­ing China with sanc­tions and cap­i­tal controls…

Source: Bloomberg

And noth­ing says Buy Hong Kong stocks like the cav­al­cade of freedom-​crushing new laws and head­lines unleashed from the main­land this weekend…

Source: Bloomberg

While the Nas­daq (blue) lagged on the day it was still higher on the day BUT just look at Tran­nies (green) and Small Caps (red). Dow broke above 25k and S&P above 3,000 before the whole frag­ile facade fell apart on repeated head­lines on China sanctions…

The S&P 500 broke above its 200-​DMA and Small Caps tested their 100DMA (as The Dow got close) but the late-​day China sanc­tions head­lines spoiled the party…

But it was a dif­fer­ent crowd lead­ing the day with FANG stocks back at one-​week lows…

Source: Bloomberg

As FANGs fal­tered, Bank stocks soared…

Source: Bloomberg

But the “virus fear” is fad­ing fast once again…

Source: Bloomberg

“Most Shorted” Stocks extended their fourth squeeze leg higher…

Source: Bloomberg

Trea­sury yields were higher across the curve with the long-​end notably under­per­form­ing (2Y +1bps, 10Y +7bps)…

Source: Bloomberg

The Dol­lar dumped notably today — biggest daily drop in 2 months…

Source: Bloomberg

Break­ing below crit­i­cal support…

Source: Bloomberg

Cryp­tos have slipped lower since Friday…

Source: Bloomberg

Oil and cop­per ended the day higher but, despite the dump in the dol­lar, pre­cious met­als ended the day down…

Source: Bloomberg

Finally, you have to laugh really… The last 16 trad­ing days have seen the S&P rise 163.0 points from the US day ses­sion close to the open the next day… and fall 4.3 points from the open of the US day ses­sion to the close.

Source: Bloomberg