US OPEN: Wall Street opens higher on Covid-19 vaccine hopes

• Moderna (MRNA.US) trial stoked optimism about a potential coronavirus vaccine.
• Fed Powell believes that the US economy could shrink by 30% in Q2
• Rising US-China trade tensions

US indices opened higher on Monday as news from  Moderna (MRNA.US) trial stoked optimism about a potential coronavirus vaccine. Company stocks rallied more than 25% after the company reported “positive” phase one results for a potential coronavirus vaccine. Moderna announced that after two doses all 45 trial participants had developed coronavirus antibodies.  However the drug still needs further and larger-scale tests.

On Friday, Democrats in the House of Representatives passed an additional $3 trillion coronavirus relief package. However, it is not expected to pass the Republican-majority Senate. Also more and more states start to reopen their economies. California Governor said about 75% of state businesses are open and more parts of New York State are now eligible to lift some restrictions.

This positive headlines has tended to overshadow the latest tensions between China and the U.S. after Washington announced that all non-US manufacturers using American chipmaking equipment, intellectual property or design software will have to apply for a license before shipping chips to Huawei. Meanwhile Fed Chair Powell said CBS ’60 Minutes’ on Sunday, that the US economy could shrink by an annualized rate of around 30% in the second quarter of 2020 and the unemployment rate could jump to 20%-25%,. Powell also announced that the Federal Reserve was “not out of ammunition by a long shot” and was ready to expand its lending program if needed. FED Chairman believes that that the economic data "will be very, very bad” For the April-June period however remain optimistic regarding the US economic recovery, saying that the world's largest economy could rebound in the second half of the year if the coronavirus does not erupt in a second wave.

S&P500 (US500) is trading higher on Monday after biotech company Moderna said that results from the first human trial of its potential covid-19 vaccine are promising. Should upbeat moods prevail, resistance at 2968.3 pts may come into play. Source: xStation5

Moderna (MRNA.US) shares soared over 25 % and are at their all-time highs. Local support can be found at $68.76 per share. Source: xStation5

Warren Buffett’s Berkshire Hathaway (BRKB.US) announced in it's quarterly 13F filing, that is has sold most of its holdings in Goldman Sachs (GS.US). Berkshire’s sale of Goldman shares brings its holdings down to 1.9 million shares from more than 10 million, cutting its stake to about 0.6%.

Uber (UBER.US), Grubhub (GRUB.US) -  both CEOs  met over the weekend to continue merger discussions, as they try to work out a stock-swap deal that would combine Uber’s delivery service, Uber Eats, with Grubhub. Grubhub still believes that Uber’s current offer is too low -  according to The Wall Street Journal

Alphabet (GOOGL.US) – the Justice Department and state attorneys general will proppably issue  antitrust lawsuits against Alphabet’s Google which will focus on Google’s dominance in both the advertising business and in online search, according to The Wall Street Journal

T-Mobile US (TMUS.US) – Japan’s Softbank is considering selling a significant portion of its stake in the wireless operator to controlling shareholder Deutsche Telekom, according to The Wall Street Journal. If this happen, then Deutsche Telekom’s share will increase from nearly 44% to over 50%.

International Game Technology (IGT.US) –  earned 8 cents per share for its latest quarter, which came in 3 cents a share above market expectations. Revenue fell short of forecasts. The maker of electronic gaming equipment and software said the impact from the pandemic began to set in during March, amid closures of casinos and gaming halls, but company reassured that it has sufficient liquidity.

Tesla (TSLA.US) – is taking into consideration two locations in Texas and Oklahoma as possible sites for a new factory, according to a source intimately familiar with the automaker’s plans who spoke to CNBC.

Walt Disney (DIS.US)  is planning to reopen part of the shopping area at its Disney Springs resort in Florida on Wednesday. The company is implementing a variety of safety measures, including masks and contactless payment options.