14 BARRON’S October 19, 2020
REVIEW
28,606.
Dow Industrials:+19.
Dow Global Index:-1.
0.74%
10-year treasury note:-0.
Mars Can’t
Lift the Stock
Last week, European aerospace giantAirbuswas
picked to design and build a spacecraft headed for Mars,
only to find itself dragged back to earth.
The plane maker announced that it has won a con-
tract with the European Space Agency for its joint mis-
sion with NASA to bring samples from Mars back to
Earth. Airbus will build the Earth Return Orbiter, as
well as a small rover to collect samples, for the five-year
mission set to launch in 2026. The contract is worth
€491 million ($577 million), the company said.
Despite the win, Airbus stock fell 5.29% on the week—
it’s down 49% year-to-date—as investors remained fo-
cused on more prosaic concerns.Delta Air Lines,ama-
jor buyer of Airbus aircraft, announced it was reducing
purchase commitments by more than $5 billion through
2022 to better match timing of deliveries with financial
needs. Airbus, like rivalBoeing, has been hurt as air-
travel demand has plummeted due to the pandemic.
Then, the World Trade Organization ruled that the
European Union can impose tariffs of €3.99 billion an-
nually on Boeing jets and other U.S. goods, in retaliation
for Washington’s subsidies to the U.S. carrier. This came
after the WTO authorized the U.S. to impose $7.5 billion
in tariffs on Airbus jets and other products.
Citi analysts said the ruling may push both sides to
reach an agreement, avoiding a prolonged trade battle.
But that wouldn’t offer much of a boost, since most of
Airbus’ deliveries in North America over the next two
years come from tariff-free Canada and the U.S.
Could Mars be more welcoming?—Callum Keown
AIRBUS’ EARTHBOUND WOES
Drifting
Third-quarter earnings season began,
with tech lifting the market, led by
Apple, which introduced its 5G
phones on Tuesday, andAma-
zon.com, which launched its Prime
Day sales event.CitigroupandJP-
Morgan Chasereported decent quar-
ters, but shares fell, as Covid-19 num-
bers rose in both the U.S. and Europe.
Jobless claims rose. A Friday rally
faded. On the week, the Dow industri-
als squeaked up less than 0.1%, to
28,606.31; the S&P 500 edged up
0.2%, to 3483.81; and the Nasdaq
Composite nosed up 0.8%, to 11671.56.
On the Road Again
President Trump, recently hospital-
ized for Covid, said that White House
physicians gave him the go-ahead to
begin rallies again—and that he was
now “immune.” His doctors said he
had two consecutive negative antigen
tests, but information was sketchy.
Stressing the Herd
Covid hospitalizations rose, putting
new strains on hospital systems. Some
22 states recorded 1,000 new cases as
the death toll neared 220,000. Still,
states continue to reject broad lock-
downs or mandate mask-wearing, and
the administration seemed to favor a
herd immunity policy. The first U.S.
case of a Covid reinfection surfaced in a
man hit by different strains of the vi-
rus.Johnson & Johnsontemporarily
shut down vaccine trials over an illness,
andEli Lillypaused its antibody trial
withGilead Science’s remdesevir over
safety concerns. Talks resumed on new
relief measures after Trump told Trea-
sury Secretary Steven Mnuchin “to
bring home the bacon.”
Barrett on Barrett
Supreme Court nominee Amy Coney
Barrett underwent an expedited Senate
confirmation hearing. Democrats criti-
cized a rush to vote as the election
nears, and raised fears she could help
overturn the Affordable Care Act and
tilt the election to Trump. Barrett said
she had “no agenda” while parrying
questions about Supreme Court deci-
sions on abortion, same-sex marriage,
and climate change.
Prize Economists
Two Stanford economists, Paul Milgrom
and Robert Wilson, won the Nobel Me-
morial Prize in economics for their pio-
neering work in auction pricing.
Annals of Deal-Making
Mallinckrodtfiled for bankruptcy. In
February, the company closed its opioid
unit. Opioid claimants will get payments
of $1.6 billion and 20% of the com-
pany...Chicken processorPilgrim’s Pride
agreed to pay a $110.5 million fine over
price-fixing charges...The Organization for
Economic Cooperation and Development
released a global tax plan for multination-
als, which the administration opposes...A
flock of biotechs have gone public in Octo-
ber, includingKronos Bio,Shattuck
Labs, andSpruce Biosciences, all of
which surged.Codiak BioScienceslisted
on Wednesday and fell. More com-
ing...Blackstone Groupsold BioMed
Realty Trust from one fund to another for
$14.6 billion, a $6.5 billion gain.
$16 T
Estimated U.S. financial and
health-care cost of the
Covid crisis, from a study by
Harvard’s David Cutler and
Lawrence Summers.
90 %
Increase in sales of Chrome-
books for distance learning in
the third quarter, according to
Gartner.
$10 T
Total market value of the Chi-
nese stock market, a record.
$
Average monthly Social Security
cost-of-living increase, down
from $24 last year.
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THE NUMBERS
HE SAID
“This recession
wasbyfarthe
deepest one in
postwar history, but
it also may go into
the record books
as the briefest
recession in U.S.
history.”
Federal Reserve Vice Chairman
Richard Clarida
Illustration by Elias Stein; Dominik Bindl/Getty Images