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Banco Comercial Português, S.A. informs about provisions for FX-denominated


J&J Covid Vaccine Pause Appears To Weigh On Airline, Casino, Hotel Stocks Early

After a dull Monday, investors awake this morning to a couple of big news items. That being said, both the consumer price index (CPI) and a pause in the use of Johnson & Johnson’s (NYSE: JNJ) Covid vaccine seem to be having a muted impact on the market. We’ll get to the JNJ vaccine withdrawal, but first a look at CPI: It came in at 0.6% for March, up from 0.4% in February and just a bit above analysts’ average estimate of 0.5%. The fact that it’s up isn’t too surprising considering all the inflation warnings from the Fed lately, but it’s good to see it’s only a little above expectations. That’s in contrast to last Friday’s producer price index, which came in way, way, above expectations. Maybe this will settle inflation fears a bit. The other big news is the U.S. Food and Drug Administration’s (FDA) decision to temporarily pause use of JNJ’s Covid vaccine due to a handful of blood clots. This isn’t great news, obviously, but it’s nothing people need to go crazy over. We had good momentum with vaccinations heading into summer, and this might slow the momentum, but the other two vaccines are still working well. Vaccine Pause Hits Reopening Shares Also, people shouldn’t think of vaccines as a simple product without potential problems. No one knows yet if these blood clots are a game changer for the JNJ vaccine, but it isn’t surprising that a complication got reported, simply because vaccines aren’t widgets. Like any medical product, they’re complex and can have different effects on different people. Hopefully this gets resolved quickly and the JNJ vaccine comes back. It’s a handful of cases (six cases after 6.8 million vaccinations) and the FDA said it acted “out of an abundance of caution.” It’s unclear how long it might take to get to the bottom of this, but the other vaccines were already being used millions of times a day in the U.S., and that continues. The FDA may want to examine more data before allowing JNJ to come back, but in a worst-case scenario it’s off the market for an extended period, putting more pressure on supplies of the other vaccines. The JNJ pause could put some pressure on some of the “reopening” stocks and sectors until things get sorted out. Already this morning we’re seeing shares of airlines, casinos, and cruise lines turning lower in pre-market trading. An FDA press conference scheduled for 10 a.m. ET today might grab Wall Street’s attention. Though reopening shares start the day under pressure, a new JP Morgan Chase & Co. (NYSE: JPM) note suggests the economy could fully reopen by July 4. Whether this JNJ development affects that timeline is unclear, but it’s nice to think JPM might be right. Meanwhile, volatility remains light and Bitcoin is now above $62,000. The Cboe Volatility Index (VIX) is up, but still below 17.5, which is amazing when you remember how long it spent above 50 last year. Unless there’s big news out of the FDA press conference, trading could be pretty slow today as investors await tomorrow’s onslaught of big bank earnings. Summer Of 2020 Revisited? Nope, you’re not on a time machine back to last summer. Those really were NVIDIA Corporation (NASDAQ: NVDA) and Tesla Inc (NASDAQ: TSLA) rolling up big gains yesterday while this year’s “reopening” darlings like airlines, energy companies, and entertainment firms took a back seat. This was before today’s JNJ vaccine news, remember. Both NVDA and TSLA rallied on specific news, with TSLA benefiting from an analyst upgrade while NVDA raised its Q1 revenue guidance and introduced several new products, which actually might have weighed on shares of some of its competitors including Intel Corporation (NASDAQ: INTC) and Advanced Micro Devices, Inc. (NASDAQ: AMD). NVDA and TSLA formed the vanguard Monday, but for the most part stocks marched in place as investors seemed to stay on the sidelines waiting for earnings. It all starts tomorrow when we hear from JPMorgan Chase & Co. (NYSE: JPM), Goldman Sachs Group Inc (NYSE: GS), and Wells Fargo & Co (NYSE: WFC). For the first time in a while, the big banks have a tailwind and investors can focus more on traditional bank functions and less on the industry’s efforts to bail out the floodwaters. The 10-year yield is much higher than it was six months ago, so they can make more on the spread and that should go right to the bottom line. Beyond that, trading is an important part of many bank businesses (especially some of the big Wall Street sluggers like JPM and GS), and they possibly saw benefits in their bond trading during Q1 thanks to opportunities there. As always, investors should consider focusing on the separate fortunes…

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