27 August 2020

Abbott Injects Optimism with New Covid-19 Test


News shaping
the markets today


What’s happening: Shares of Abbott Laboratories rose sharply in extended trading on Wednesday after the medical devices and healthcare company won US marketing approval for its latest rapid covid-19 test.

What happened: With the US leading the charts in coronavirus cases and deaths, the speed and cost of testing remains a key issue in the country.

Abbott’s latest BinaxNOW COVID-19 Ag Card test addresses both concerns, generating results in just 5 minutes at a cost of $5.

Why it matters: Since March, the North Chicago, Illinois-based company has received approvals for five covid-19 tests in the US, which includes the one currently being used by the White House.

The latest test, known as point-of-care ID NOW covid-19 test, is said to deliver positive results within five minutes and Detroit started using this in April. However, just a month later, the test was reported to be providing frequent false negative results.

XpresSpa Group, which had reduced wait time for airport covid-19 testing to under 15 minutes from more than 48 hours, had now inked an agreement with Abbott to secure 100 ID NOW testing instruments.

Abbott’s latest offering, which received emergency use authorisation from the FDA, will deliver test results without using any laboratory hardware. The results will be displayed on the company’s free Navica mobile app. While the offering is ground-breaking, the FDA has cautioned that the test is still not perfect and shows false negative results in a few cases.

How shares responded: Shares of Abbott spiked 11.8% to $115.44 in extended trading on Wednesday, following a 0.7% gain during the regular session. The stock has climbed more than 15% over the past three months.

What to watch: Abbott is planning to start shipping tens of millions of its latest tests in September and expects to ramp the numbers to 50 million tests per month from October. Markets will look out for news related to how the tests are performing, as this could be a major success both for the company and the rate at which the US and other countries can reopen their economies.

The Markets Today


European stocks will be in focus today, after closing higher in the previous session.

Context: European stocks closed on a positive note on Wednesday, with investors cheering news of additional coronavirus stimulus from Germany.

Details: The German government announced an extension of its covid-19 stimulus package in order to help Europe’s biggest economy to recover from the pandemic-led crisis.

In another positive sign, French Prime Minister Jean Castex is also set to announce a recovery plan for the economy on September 3.

Progress in trade talks between the US and China also lifted investor sentiment, helping the S&P 500 and Nasdaq 100 to climb to new fresh record highs on Wednesday.

Markets remained cautious, however, on news of a rise in covid-19 cases across the continent. Two cases of re-infections were also found in Europe, which increased concerns around the lack of herd immunity against the coronavirus.

Among other gainers, Elekta’s shares jumped more than 11% after the Swedish radiation therapy equipment maker reported upbeat earnings for the first quarter.

The pan-European STOXX 600 index closed higher by 0.9% on Wednesday, while the German DAX 30 rose 1% and French CAC 40 gained 0.8%.

What to watch: Investors will focus on Federal Reserve Chairman Powell’s speech at the Jackson Hole economic symposium, which is expected to provide details on America’s monetary policy.

Investors also await reports on household credit growth, loans to private sector and money supply M3 from the Eurozone.

Markets will continue to monitor the covid-19 numbers, with total cases surging past 24 million globally.

Other Markets: US indices trading closed higher on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.30%, 1.02% and 1.73%, respectively.

Support & Resistances
for Today


market snapshot


Futures at 0400 (GMT)

What else to watch today


France’s business confidence and business climate indicator, Italy’s industrial new orders and manufacturing sales, UK’s car manufacturing, South Africa’s producer prices, Mexico’s balance of trade and monetary policy meeting minutes, Canada's current account and average weekly earnings, Russia’s business confidence and corporate profits, Saudi Arabia’s money supply M3 and bank lending growth, Argentina’s consumer confidence as well as the US GDP growth rate, initial jobless claims, pending home sales and EIA’s natural gas stocks. Fed Chair, Jerome Powell's speach at Jackson Hole Symposium.

ADS Securities London Limited “ADSS” is an execution-only service provider. This material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or investment objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by ADSS that any particular investment, security, transaction or investment strategy is suitable for any specific person. To the extent that any content in this material is construed as investment research, you must note and accept that the content was not prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.  This material may contain links to third party websites, and any content, or use of your personal data by any third party websites is not the responsibility of ADSS or any member of the ADSS Group.