Trump Says Covid-19 Vaccine May Be Ready Far Before Year's End Bloomberg
Introduction
One of the most argued topics of this downturn is whether the oil and gas supermajor Exxon Mobil (XOM) will reduce its dividend for the first time since the dark days of World War 2. Given Exxon's immense financial strength, it should be of little surprise that thus far the company has defied the downturn and sustained its dividend, but unfortunately, this now appears to be approaching its limits based on the latest commentary from management.
When a dividend is under pressure, management will always be facing questions probing for insights into any possible reductions, and thus, reviewing the way in which they speak is particularly interesting. They made numerous statements during the second quarter of 2020 results conference call, but the two quotes listed below are the most interesting:
Doing so will enable us to maintain the dividend and hold debt at its current level. Of course, this is a volatile market, and we can't know with certainty how the market will evolve from here. There are simply too many unknowns. While we're developing plans based on what we and other third parties can reasonably expect to happen, we have to maintain a certain degree of flexibility to be able to respond to potential improvement or further degradation.
But as I said, we don't plan to take on any more debt. We're now developing plans that will able us to maintain those capital allocation priorities over the near term, and that includes sustaining the dividend.
- Exxon Mobil Q2 2020 Conference Call
Similar to central bank press releases, management teams at massive companies walk a fine line between not misrepresenting their intentions, but at the same time, when discussing something undesirable, not being too straightforward. On the surface, they may appear to be remaining steadfast in their commitment to sustaining the dividend, however, they also appear to be flagging the limits to this commitment by stating that they do not plan to take on any debt.
I believe that this commentary indicates an intention to reduce their dividend once their current cash balance is depleted if operating conditions have not made a significant recovery and the future is more certain. Given the immense pressure that their entire industry is facing, it seems prudent for investors to assume that the countdown to a potential dividend reduction has begun. Although they can reduce their costs, the biggest factor that will determine whether they require more debt or not is always going to remain oil and gas prices.
Whilst every person is entitled to their own view, based upon how the last six months have transpired I believe that COVID-19 will continue significantly weighing down economic activity until such time as a viable vaccine is produced. It initially appeared that the world was starting to get the virus under control with the amount of new global cases remaining static throughout much of April and May, but this clearly proved short-sighted, as the two graphs included below display.
(Image Source: Google)
In my home country of Australia, we were quite fortunate initially and avoided seeing a massive surge cases, and thus, life began returning toward normal. Fast forward a few months, and one of our largest states, Victoria, has just imposed very strict lockdowns for at least the next six weeks that will slam economic activity, with other states also shutting their borders and imposing various other restrictions. Whilst this example alone does not materially impact global economic activity, it still provides a timely example of the difficulties that the entire world faces, since, being a developed island without extensive high-density living, we should fare better than many other countries.
It appears that until such time as a vaccine is invented and rolled out across the world, life will struggle to resemble normal, and thus, economic activity will continue being weighed down significantly. This means that a proper and sustained recovery in oil and gas demand, and thereby prices, within the short to medium term is also likely to be dependent on a vaccine, along with the dividend of Exxon Mobil. Whilst many people are hoping that a viable vaccine is only around the corner, until such time as one is definitively successful, investors would be well served to keep their expectations tempered.
This situation gives rise to the following question: how much longer does Exxon have before its cash balance is depleted and a dividend reduction becomes very likely? Whilst the volatility in oil and gas prices makes this impossible to know for certain, a reasonable estimation can be made using its guidance and recent cash flow performance, as the table included below displays.
(Image Source: Exxon Mobil Second Quarter 2020 Results Presentation)
It can be observed that Exxon ended the second quarter of 2020 with a sizeable $12.6 billion cash balance, but unfortunately, this could deplete quite quickly and may not last beyond the end of 2020. The company's dividend payments cost $3.7 billion every quarter, or $7.4 billion remaining to the end of 2020. Given its guidance for 2020 capital expenditure of $23 billion, it implies that Exxon still has $11.4 billion remaining for the second half of 2020, and thus, its total remaining cash outflows should be $18.8 billion. Whilst this was easy to estimate, the biggest question going forward is regarding the company's operating cash flow.
The prices of oil and gas are notoriously difficult to accurately predict, but given the current COVID-19 situation and resulting economic environment, at best it seems sensible to assume that operating conditions will average between those of the first and second quarters of 2020. I believe that a reasonable conservative assumption would be that the company's operating cash flow for the remaining two quarters of 2020 will average half that of the first quarter excluding working capital movements, thereby totaling $7.5 billion.
When this estimated operating cash flow is subtracted from Exxon's $18.8 billion estimated cash outflow, it indicates that the company would end 2020 with a cash balance of only $1.30 billion. This would clearly push Exxon towards making a decision to either increase debt or reduce its dividends, which I now believe management is seriously considering if operating conditions are still tough. Admittedly, asset divestitures, further capital expenditure reductions and favorable working capital movements may provide a sufficient temporary boost and thus buy the company another quarter or two.
Even though everyone remains hopeful that a viable vaccine will be rolled out soon, uncertainty still reigns supreme in a world that feels almost unrecognizable compared to only one year ago. It now appears that after fighting to sustain its dividend for years following the 2015-2016 oil price crash, the toll is starting to weigh on the company's resolve. Although shareholders should still expect to see Exxon's dividends flowing unchanged throughout the remainder of 2020, if a COVID-19 vaccine does not transpire by early 2021, it now appears that the company's dividend will be joining the long list of causalities. I will still be maintaining my Bullish rating, since Exxon still offer a way to capitalize on any eventual recovery in oil and gas prices, regardless of the dividend.
Disclosure: I am/we are long XOM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Public health experts are raising red flags that the Trump administration could exert political pressure on the Food and Drug Administration (FDA) to approve a COVID-19 vaccine before one isready.
President TrumpDonald John TrumpWhite House sued over lack of sign language interpreters at coronavirus briefings Wife blames Trump, lack of masks for husband's coronavirus death in obit: 'May Karma find you all' Trump authorizes reduced funding for National Guard coronavirus response through 2020 MORE, searching for a political win just over three monthsfrom the election, has latched onto the push for developing a vaccine in record time and promoted it in anumber of recent appearances.
Trump spoke optimistically of the prospects for a vaccine during a visit to a biotech facility in North Carolina on Monday, despite experts cautioning one may not be widely available for another year.
The president made similar comments Thursday, touting progress without dwelling on the fact that more than 150,000 Americans have died due to the pandemic, a massive toll higher than any other country's.
"We are way ahead on vaccines, way ahead on therapeutics. And when we have it, were all set up with our platforms to deliver them very, very quickly," Trump said during a White House press conference. "Were all set to deliver them as soon as we have them, and thats going to be very soon."
The president has sought to take credit for "Operation Warp Speed," the administration's multibillion-dollar effort to fund the development and distribution of potential vaccines for COVID-19 and have them available as soon as they are found to be safe and effective.
The administration has been buoyed by some early success reports from top vaccine candidates, and political officials have confidently predicted a shotwill be available before the end of the year.
Anthony FauciAnthony FauciWhite House sued over lack of sign language interpreters at coronavirus briefings Fauci warns of 'really bad situation' if daily coronavirus cases don't drop to 10K by September Overnight Health Care: Trump criticizes Birx over Pelosi, COVID-19 remarks: 'Pathetic' | Democratic leaders report 'some progress' in talks with White House | WHO chief: There may never be 'silver bullet' for coronavirus MORE, thecountry's top infectious disease doctor,said Friday he is cautiously optimistic a vaccine will be ready by the end of 2020 and be widely distributednext year.
While there's almost no chance a vaccine would be ready for widespread distribution before Election Day in early November, some of the companies with vaccine candidates entering the phasethree clinical trial stages now might start to show initial results by then.
Researchers and experts said they are worried Trump could seize on those early results to pressure public health agencies into approving a vaccine before it is ready.
"You saw the issue of politicization around hydroxychloroquine and the pressure that was put on FDA then. There's a legitimate concern that does not happen again," said Jesse Goodman, a Georgetown University professor who was previously FDA's chief scientific officer.
Many outside observers felt the FDA bowed to political pressure earlier this year when the agency issued an emergency authorization for hydroxychloroquine, an anti-malaria drug that Trump, his allies and members of his administration have continued to tout as a miracle cure for COVID-19 despite evidence.
Rick Bright, an agency whistleblower, made similar accusations and said he lost his job for objecting to the drug's widespread promotion.
The FDA later revoked the authorization.
In another instance, the White House reportedly pressured the Centers for Disease Control and Prevention (CDC) to change its guidance on reopening schools in order to emphasize the importance of kids going to school while downplaying any potential risks.
Goodman said even if there is no political pressure on a COVID-19 vaccine, there's still "a legitimate problem in public perception" because of the administration's past actions in other areas of the crisis.
An ABC News/Washington Post pollreleasedin Julyfound that more than half the country distrusts Trump while six in 10 Americans disapprove of his handling of the virus outbreak overall.
A separate poll released this week found that 64 percent favor fully testing any potential vaccine, even if doing so delays its release and allows the disease to potentially spread further.
Health experts warn about the danger of a widespread portion of the population rejecting a vaccine once one is available.
Top administration officials are working hard to reassure the public that they will not be cutting any corners.
"Data and science. Those are what's going to guide us," FDA Commissioner Stephen Hahn said during a recent interview with the Journal of the American Medical Association. "We cannot have a situation where people lose trust in the FDA and the clinical trials process.
Hahn said the FDA's decisions have worldwide implications, beyond just a COVID-19 vaccine.
"America and the world's public trust in FDA is really important. It's worth a lot because people depend upon us every day in their lives, and we just cannot do anything that would break that trust, and that's a solemn promise," Hahn said.
FDA guidance requires any vaccine approved to be at least 50 percent more effective than a placebo in preventing the disease, among other criteria.
Drug executives have said they do not believe the FDA would lower its standards for approval.
Still, a potential workaround exists: theagency could issue an emergency use authorization, which requires less rigorous data than a full approval, as soon as officials are convinced a vaccine is safe and effective.
Goodman said all agencies involved in the decisionmaking need to be as transparent as possible.
"I don't think emergency use authorization should be trivialized on very limited data, and I thinkthe data need to be spelled out to people," Goodman said.
Amesh Adalja, a senior scholar at the Johns Hopkins University Center for Health Security, said he thinks there are enough outside players involved that the Trump administration would be hard-pressed to push a vaccine based on limited evidence.
"My confidence is not in the White House managing this, but in the pharmaceutical companies that have delivered hundreds and millions of doses of vaccines for many different problems over time," Adjala said.
Still, he said public skepticism will be hard to overcome.
"If politicians get involved in vaccine decisionmaking, that is going to be tainted, because everything that politicians have touched so far in this pandemic has been compromised by their involvement in it," Adjala said.
"This is not a place that politicians really need to insert themselves. This is a medical decision between doctors and patients."
FREE COVID-19 TESTING Gov. Justice also updated the schedule of upcomingfree community COVID-19 testingevents taking place over the next several weeks at various dates and times in Brooke, Hampshire, Jackson, McDowell, Raleigh and Taylor counties.
The effort is part of a plan to provide free optional testing to all residents in several counties that are experiencing higher rates of COVID-19 transmission. It targets residents who have struggled to be seen by a physician or do not have insurance to pay for testing. However, other residents, including those who are asymptomatic are welcome to be tested.
Testing details listed below in chronological order:
Raleigh County August 3 & 5 10:00 AM 2:00 PM Beckley ARH Southern Clinic: 250 Stanaford Road, Beckley, WV
Hampshire County August 5 8:00 AM 2:00 PM Hampshire High School: 157 Trojan Way, Romney, WV
Jackson County August 7 12:00 PM - 6:00 PM River Front Park: 220 Riverfront Park, Ravenswood, WV August 8 12:00 PM 6:00 PM Cedar Lakes Conference Center: 82 FFA Drive, Ripley, WV
McDowell County August 7 8:30 AM 2:30 PM Southside Middle School: 13509 Rocket Boys Drive, War, WV August 8 8:30 AM 2:30 PM Tug Lot: 198 Tug Tower Addition Road, Welch, WV
Taylor County August 8 8:00 AM 2:00 PM Grafton High School: 400 Yates Avenue, Grafton, WV
Brooke County August 14 & 15 9:00 AM 4:00 PM Bethany College Hummel Field House: 6268 Main Street, Bethany, WV
Since the COVID-19 pandemic began, physicians in the U.S. report having seen an increase in stress-induced cardiomyopathy also known as broken heart syndrome according to a study published this month in the Journal of the American Medical Association. The increased rate of heart problems, doctors say, is due to economic, physical and social stressors.
Purvi Parwani, MD, a Loma Linda University International Heart Institute cardiovascular disease specialist, says COVID-19 has led to emotional, physical and financial stress in lives across the world.
Loneliness and isolation during a pandemic coupled with multiple levels of duties at home and added economic burden has our patients worried, Parwani says.
Stress-induced cardiomyopathy can occur in response to emotional or physical stress, which can prohibit the heart muscle to pump. When this happens, patients can experience similar symptoms to that of a heart attack, such as shortness of breath, chest pain or palpitations. However, this type of stress generally doesnt go so far as producing acute blockage of the arteries.
"We all know personal stories of ourselves or loved ones who feel overwhelmed by the nation's current state," Parwani says. "If we are not careful about managing our stress properly, it can have detrimental effects on your cardiovascular health.
Parwani offers these three tips to reduce stress and protect one of your most vital organs:
If any of your symptoms are also accompanied by dizziness, fainting spells or shortness of breath, contact your doctor immediately. These symptoms combined can be an identifier of a more significant cardiovascular health issue.
ALBUQUERQUE, N.M.(KRQE) From Walmart to Target to Discount Tire, hundreds of businesses across the state have had COVID-19 infections. For the first time, KRQE News 13 has a list of where.
According to the New Mexico Environment Department, there were more than a thousand rapid responses since May 25. However, according to the list, when an employee tests positive, it appears there havent been widespread outbreaks because of it.
A McDonalds in Clovis, a Pizza Hut in Farmington, and a Blakes Lotaburger in Grants all have had rapid responses. Many of the more than 1,000 businesses listed on the states rapid response list are fast food joints and restaurants. That includes Standard Diner in Albuquerque. It was positive, Standard Diner General Manager Zach Work said. It was a positive experience.
Work said the state contacted him within two days of his employee testing positive. They were pretty comprehensive, Work said. Phone calls and emails took up a good six to eight hours of my week this past week.
Work said only four of his 20 employees were in contact with the person and got tested. Like most other businesses on the list, no other employees tested positive. However, there were some outbreaks including at Stampede Meat, Inc. in Sunland Park where 17 out of 337 employees were infected. Six out of 48 workers got sick at an Applebees in Santa Fe. Many grocery stores are also on the list.
A map of the top ten counties for rapid responses as of Thursday shows Bernalillo County is number one with 444. The much smaller Lea County has had 51.
The state does not require businesses to publicly announce COVID-19 infections, so what about the diners or shoppers who have visited these places? That employee had not worked in quite some time, Work said. We felt there was no risk of exposure to the public because of no public interaction.
While schools, Intel, and stores report cases, Environmental Health Secretary James Kinney said healthcare and restaurants are the top two industries they respond to. We ask employers to work with us, temporarily pause operations and test employees as directed, Kinney said in a press conference on July 30.
We are happy to know someone is watching and kind of following up, Work said. Public health and safety is number one on our list at all times. Work said they do have contact tracing at the restaurant, but he said very few people leave their information.
Darla Gullotta waited 10 days for her COVID-19 test results.
During that time, she quarantined, as did her husband.
Her mother, who spent time with her during the period when she might have been infectious, canceled a surgical procedure. And while Gullotta was able to work from home, her husband, who is employed by a local highway department, was not.
In the end, Gullotta and her husband received good news -- they both tested negative for the virus.
That didn't make the long waitany less inconvenient.
Everything else has to remain on hold [while you wait], Gullotta, of Schenectady, told me. It just seems theres no consistent place where people can reliably go to have a quick turnaround for a COVID test.
Unlike the early days of the pandemic, its become very easy to get a COVID test in New York, with tens of thousands of people getting tested every single day.
What isnt so easy is waiting for test results -- an unpredictable and increasingly lengthy process.
The great promise of widespread coronavirus testing was that it would enable us to quickly identify and isolate those carrying the virus and trace their contacts, while those who tested negative would be able to resume their daily routines with minimal disruption. Society could function somewhat normally, with a small number of people quarantining and everyone else living mostly normal lives.
At least, that was the idea.
The reality is that wait times have gotten longer for New Yorkers in recent weeks, the result of an increased demand for tests across the country.
Other states are experiencing a surge in infections, causing a backlog in tests at the labs that process them and delaying results in even in states that have their outbreaks under control.
These delays are occurring at a most inopportune time, as schools, colleges and other workplaces and institutions prepare to reopen. An efficient testing system is critical to containing outbreaks, and the U.S. doesnt have one.
Its a huge failure -- one that ought to be a national scandal.
A long wait for test results can turn your life upside down, even if you don't have coronavirus.
Gullotta got tested in mid-July at one of Schenectady Countys community testing sites, after coming down with a fever upon returning home from a trip to the Adirondacks. She did what health experts advise and quarantined while waiting for her results, thus ensuring that she wouldn't infect anyone if she did have the virus.
I try to be responsible, she said.
Sadly, being responsible can also be a hardship.
A recent Wall Street Journal article observed that long waits for coronavirus test results can translate to weeks without steady income.
For many people, particularly essential workers who cant do their jobs from home, longer waits can mean time without pay while they wait to be allowed back to work, the article stated. Others have been forced to use vacation time.
People who dont self-isolate while waiting for test results risk spreading the disease, as a July article from Syracuse.com about an outbreak at a daycare in DeWitt makes clear.
The outbreak started with a parent who sent her child to daycare while waiting for test results.Both parent and child eventually tested positive for the disease, sickening atleast 16 people connected with the facility.
In early July, I got a glimpse of what an efficient testing system looks like.
I got tested at the University at Albany, and received my results within 48 hours.
The quick turnaround made it possible for me to go to Maine on vacation and see my family, and I assumed the kinks in testing had been resolved. But that wasn't the case at all.
When I asked friends and acquaintances on social media how long it had taken for test results to come back, I was both surprised and appalled by the variability in wait times.
One friend told me her daughter in New York City had been waiting nine days for results; another New Yorker told me she had waited just one day.Rabbi Matthew Cutler, at Congregation Gates of Heaven in Schenectady, joked that he wasnt sure whats coming first: my COVID results or the Messiah, while a friend in Central New York informed me that around here it has been taking nine to 14 days.
County officials confirmed that its taking longer to get test results.
Wait times for the county's community testing have varied a lot but can easily be more than a week, Erin Roberts, a spokeswoman for Schenectady County, said, noting that the massive increase in testing nationally, combined with the processing of tests out-of-state, are causing the slowdown.
Montgomery County Public Health Director Sara Boerenko told me that shes seeing a five to seven day wait for test results.
There have been times we waited nine days, she said. Slower times started just after the 4th of July holiday, but have not gotten better. We also saw an increase in wait times after the mandatory testing for nursing home staff was implemented.
Five months into a global pandemic, our testing infrastructure ought to be running like a well-oiled machine.
Instead, the opposite appears to be happening.
Americas testing infrastructure is collapsing, Dr. Ashish Jha, a professor of global health at the Harvard T.H. Chan School of Public Health, warned in an op-ed article in Time magazine.
Testing ought to be fast, reliable and easy to access.
That it isnt is simply unacceptable.
ReachSara Fossat[emailprotected]Opinions expressed here are her own and not necessarily the newspaper's.
This story is part of an NPR nationwide analysis of states' revenue and budgets during the pandemic.
Before the pandemic hit, Nebraska officials had ambitious plans for the state's roughly $5 billion annual budget, including adding $300 million to the state's cash reserves.
Then came the revenue dropoffs this spring. But by late July, lawmakers were surprised and relieved to see that reduction was not as large as some had anticipated.
State Sen. John Stinner, chair of the Appropriations Committee, had at one point anticipated a revenue reduction on the order of $250 million. But now, Stinner says, Nebraska will only have about $50 million less to spend than projected before the pandemic. That's nothing close to the kind of dropoff seen in some other states.
Following a revised financial forecast, lawmakers passed budget adjustments that actually increased the biennial budget slightly, with the largest increase, $55 million, to help pay costs incurred from devastating flooding last year. That revised spending plan is waiting for Republican Gov. Pete Ricketts' signature.
Ultimately, Stinner says, the state needs to be cautious about future spending given the unpredictability of the coronavirus spread. Cases have been growing in Nebraska.
Fred Knapp is a reporter/producer for NET News Nebraska Public Radio and Television.
Posted on Aug 3, 2020 in Latest News
(Honolulu) The Hawaii Department of Health is reporting today, 87 new positive COVID-19 cases diagnosed on Oahu for a cumulative total of 2,197 cases in the state, reported since March.While this number is encouraging and lower than previous days, it also reflects a significant lag in the testing results.With many test specimens now being sent to mainland labs for processing, reporting of test results is delayed 5-7 days.This delay may make case numbers appear lower than actual disease activity.
Many of the cases reported recently are associated with social gatherings, said Health Director Bruce Anderson.This month, multiple cases have been associated with a yoga class, fire station, funeral events, gyms, socializing at bars, and training events.Infections have been traced to workplaces including but not limited to a construction company and site, non-patient care areas of hospitals, social service organizations, nursing and care homes, retail establishments, warehouse, and delivery businesses.
Multiple household and other cases are primarily associated with social interactions such as house parties, beach parties/gatherings, birthday parties, Fathers Day & 4th of July gatherings, religious functions, gathering to view sporting events, and co-workers socializing while off-duty.
Everyone should avoid close contact with others outside of their household members, crowded places, and large gatherings.Act as if everyone around you has the virus and can spread it, said Anderson.DOH strongly encourages wearing of face masks to protect yourself and others, physical distancing and most importantly, stay at home and separate yourself from others to prevent exposing them if you do not feel well.
New cases on Oahu are widespread and located in many areas including and not limited to: Haleiwa, Hauula, Kneohe, Lie, Mililani, Wahiawa, Waimnalo, Aiea, Ewa Beach, Honolulu proper, Kailua, Kapolei, Pearl City, Waianae, and Waipahu.
To protect the privacy of individuals, DOH does not release detailed information on its investigations unless there is an imminent risk to the public.
# # #
Hawaii COVID-19 Counts as of 12:00 noon, August 1, 2020
2/28/2020
(including new cases)
++As a result of updated information, one (1) case from Maui was removed from the counts.
Laboratory* Testing DataThere were 3,390 additional COVID-19 tests reported via electronic laboratory reporting.
by Clinical and State Laboratories
*Electronic Laboratory Reporting**16 test results were inconclusive
Hawaiicovid19.com
Dan DennisonLead Public Information OfficerHawaii COVID-19 Joint Information Center[emailprotected]
