Despite the news that the longest expansion in U.S. history came to an abrupt end in the first three months of 2020, financial markets were boosted by an update from the US biopharmaceutical company Gilead Sciences on its remdesivir, an investigational drug.
The FTSE 100, a gauge of the British stock market, ended the day up 156 points to 6,115 – its highest level since March 6. The index gained more than 1,000 points from its low of 4,993 on March 23, which means that the FTSE has officially moved into a bull market – an increase of 20% or more.
Nevertheless, the tonnage of the shares of the main listed companies in the United Kingdom is still 19% lower than it was at the beginning of the year.
Wall Street was also in an optimistic mood, ignoring a worse-than-expected 4.8% annualized drop in US growth between January and March, and analysts’ predictions that there would be much darker news coming in the second quarter. .
At lunchtime in New York, the Dow Jones industrial average was up more than 500 points to 24,651 points and had recovered more than half of its losses since the financial markets were panicked by the global spread of the pandemic in late February-early March. .
Equities were also boosted by a recovery in oil prices as crude inventories were smaller than previously feared, with futures on Brent crude up 11%, and a trade statement d ‘Alphabet, the parent company of Google.
However, it was a statement from Gilead that remdesivir had shown positive results when administered to patients for five or ten days of treatment that propelled the stock markets up.
Markets retreated last week after reports that the drug had failed a trial, but the company said preliminary results had shown that more than half of the patients in both groups had improved and left the drug. hospital on the 14th day after starting treatment.
Despite the encouraging signs, remdesivir is still far from available as a treatment for Covid-19.
Donald Trump’s economic adviser, Larry Kudlow, said Gilead’s reports were positive for an American economy that experienced a sharp turnaround between the start of the year and the end of the first quarter.
Strong growth in January and February had predicted that the world’s largest economy would grow at an annual rate of around 4% in the first three months of the year, but a recovery dating back to the end of the global financial crisis more a decade ago stopped in March.
James Knightley, the international chief economist at ING Bank, said: “After a strong January and February, a combination of Covid-19 containment measures and fear of consumers led to a drop in activity in March. “
The U.S. reports growth figures differently than other countries, but the 4.8% annualized decline in gross domestic product means the economy fell just over 1% from the fourth quarter or 2019 and the first quarter of 2020.