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Spain’s Virus Cases Surge, Lockdown Imposed, Investors Derisk Stocks 

Spain’s Virus Cases Surge, Lockdown Imposed, Investors Derisk Stocks 



Spain's Virus Cases Surge, Lockdown Imposed, Investors Derisk Stocks  Tyler Durden Fri, 08/07/2020 - 04:15

A second coronavirus wave is quickly emerging in Europe. Spanish officials are set to reimpose lockdowns in part of the country as virus cases surge. 

A town of 32,000 people in northwestern Spain will begin lockdown Friday amid a local surge in coronavirus cases.

The senior health official in the Basque country reported 338 news cases in the region on Thursday. Authorities in the northwestern Castile and León region are quarantining Aranda de Duero after 103 new COVID-19 cases emerged there. Contact tracers have reported five active clusters.

New cases have risen steadily in Spain since a more than three-month lockdown ended on June 21, reaching 1,772 new infections reported on Wednesday. A total of more than 28,000 people in Spain have died since the pandemic began, the eighth highest total in the world. -AP News

The one-week moving average of new COVID-19 cases in Europe shows Spain is becoming the epicenter once again. 

Investors are derisking Spanish stocks as cases surge. We noted this, earlier in the week, in a piece titled: "Spanish Stocks Break Support As Virus Concerns Reemerge." 

And there goes the V-shaped economic recovery in Spain, and probably the rest of Europe. 

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Macro Briefing: 17 October 2023

* Biden will visit Israel in bid to keep conflict from escalating * Early data suggest the earnings recession is over for S&P 500 companies * Higher-for-longer…



* Biden will visit Israel in bid to keep conflict from escalating
* Early data suggest the earnings recession is over for S&P 500 companies
* Higher-for-longer interest-rate outlook strengthens
* China Q3 economic data expected to show growth below target
* US holiday spending expected to rebound to pre-pandemic levels
* SEC chief warns AI-linked financial crisis is a threat in years ahead
* NY Fed Manufacturing Index edges down into contraction in October
* US oil production rises to record high in first week of October:

Rising yields for US inflation-indexed Treasuries “are a retiree’s best friend,” writes Morningstar’s John Rekenthaler. “The increase is deeply meaningful. High payouts on nominal bonds can be illusory. If inflation does not follow suit, those securities become bargains, but there is always the possibility of catching a falling knife, as the Wall Street adage goes. A conventional 10-year Treasury that pays 5% will be a good investment if inflation averages an annualized 3% over the next decade but a poor choice if inflation is twice that rate. In contrast, fat TIPS yields persist. They pay and pay and pay.”

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Markets Remain on Edge

Overview:  The markets remain on edge. The press
reports US President Biden is planning an imminent trip to Israel while Iran
warns of "multiple fronts"…



Overview:  The markets remain on edge. The press reports US President Biden is planning an imminent trip to Israel while Iran warns of "multiple fronts" against Israel if the attacks on Gaza continued. The dollar, which was offered yesterday, is better bid today. Still, the capital markets are relatively quiet. Even the Swiss franc, which was the strongest G10 currency last week (~0.9%) is slightly heavier today. Among emerging market currencies, the Polish zloty continues to be underpinned by the weekend election results. The Mexican peso's 0.45% decline is the most among the emerging market currencies, giving back almost half of yesterday's gains. Gold is firm but within yesterday's ranges and holding below $1933 that was approached at the end of last week. 

Asia Pacific and European equities were lifted by the more than 1% rally of the S&P 500 and NASDAQ yesterday. All the large bourses in Asia Pacific but Taiwan rallied earlier today, led by the Nikkei's 1.2% gain. Europe's Stoxx 600 is slightly firmer, constrained perhaps by the modest losses being recorded by the US index futures. The rise in yields seen yesterday is continuing today. The 10-year JGB yield is up nearly three basis points to edged closer to 0.80%. European benchmark yields are mostly 1-2 bp higher, but Italy's 10-year yield is up nearly four basis points amid anxiety over its budget proposals. The 10-year Gilt yield is slightly softer following the weaker-than-expected employment report. The 10-year US Treasury yield is up four basis points to almost 4.75%. December WTI slipped briefly below yesterday's low near $85 but has since recovered back to the opening area near $85.70.

Asia Pacific

After reporting a 0.7% contraction in August industrial output yesterday, Japan said that its tertiary sector contracted by 0.3% in August. It has risen by a revised 1.1% (0.9% initially in July) and the median forecast in Bloomberg's survey looked for a 0.3% increase Japan’s economy, the third largest in the world is struggling, despite easy monetary and fiscal policies. Recall that it would have contracted in Q3 if it were not for tourism. Consumer spending and private investment contracted. In Q3, both appears to have stabilized, but weakness persist as seen in the industrial output figures. Exports also look weaker and imports, stronger. The median forecast in Bloomberg's monthly survey released last week sees a 0.3% contraction in Q3 GDP at an annualized rate (vs. -0.4% previously). Growth is expected to return in Q4 to 0.6% (0.5% previously). The Kishida government is cobbling together a supplemental budget and more details are likely coming from the extraordinary Diet session that begins at the end of the week.

The first thing tomorrow, China will report Q3 GDP and details from September. The median forecast in Bloomberg's survey sees the world's second-largest economy expanding by 0.9% quarter-over-quarter (0.8% in Q2). That would put the year-to-date, year-over-year pace at 5.0%. Still, the economy is struggling to maintain forward momentum and Beijing has promised more support. China's data is (purposefully?) challenging to read as it is not reported like other countries. It appears that the economic performance was little changed in September from August on a year-over-year basis. We note that the yuan's rolling 60-correlation with changes in the Japanese yen has eased over the past month to about 0.30 from 0.45 in the middle of last month. The rolling 30-day correlation is around 0.50 down from 0.70 in early September. According to Bard, the yuan and yen have moved in the same direction against the dollar 58 sessions in the past 100, down from 63 sessions in the previous 100. 

Despite the 14 bp jump in US 10-year yields between yesterday and today, the dollar is little changed against the yen, holding below last week's highs slightly below JPY149.85. It finished slightly lower yesterday and is slightly higher today. The relationship between the exchange rate and US yields has become more relaxed recently, and the safe-haven role (inverse correlation with the S&P 500) is also not statistically significant now. Looking at several other potential candidates, the (30-day) correlation with the Dollar Index, almost 0.50, is the strongest, suggest a broad dollar move is underway. The Australian dollar recovered smartly from the sell-off in the second half of last week. The Aussie peaked last Wednesday near $0.6445 and fell to almost $0.6285 ahead of the weekend. It recovered to meet the (38.2%) retracement (~$0.6345) yesterday and is the only G10 currency posting small gains against the US dollar today. It reached slightly through $0.6365 today in early Asia Pacific turnover. The (61.8%) retracement and the 20-day moving average are found around $0.6380-85. The greenback held yesterday's high against the Chinese yuan near CNY7.3155. Although it did not make a higher high today for the first time in five sessions, it did record a higher lower for the fifth consecutive session. The PBOC set the dollar's reference rate at CNY7.1796 (CNY7.1798 yesterday), well below the average in Bloomberg's survey of CNY7.3028 (CNY7.3095 yesterday). Reports indicate that last week, the PBOC ordered state-owned banks to rollover existing local government debt, lengthen maturities and lower rates, though not below government bond yields.


Sentiment in Germany remains fragile. The economy contracted in Q4 22 and Q1 23. It was stagnant in Q2 23 and appears to have contracted in Q3 and likely contracts this quarter as well. The ZEW survey showed that the current assessment continued to deteriorate. It fell to -79.9 from -79.4. It is the weakest since June 2020. It has not risen since April. The expectations component bottomed in September 2022 near -62 and reached a high in February slightly above 28. It has been negative since May and ticked up to a still negative -1.1 from -11.4 in September. While China is providing modest stimulus and Japan is preparing a supplemental budget and has maintained a negative overnight target rate, it is more difficult to see where stimulus comes from for Germany.

The UK jobs data were not inspiring. After falling for the past two months (~-4.5k), payrolls defied expectations for a small increase and instead fell by 11k. Average weekly earnings remain elevated at 8.1% over three-months through August compared with a year ago, down from 8.5% previously. Excluding bonuses, the average earnings were unchanged at 7.8%. Public sector pay was boosted (12.5%) by an agreement with health care workers and civil servants, which included a one-off payment. Private sector pay rose 7.1%, down from 7.7% in the previous three months. Of note, adjusted for CPI, earnings rose by 0.7% in the three months through August, up from 0.1% the three months through July. Vacancies fell by nearly 990k in the three months to September. Tomorrow, the UK reports September CPI. A 0.5% increase, which the median forecast in Bloomberg's survey anticipates would translate to a 1.6% annualized pace in Q3, down from an 8% pace in Q2. The Bank of England meets on November 2, the day after the FOMC meeting concludes. The swaps market has a little less than a 25% chance of a hike discounted, down from closer to 30% chance yesterday. and a little more than a 40% chance of an increase before the end of the year, down from about 50% yesterday. 

The euro fell by nearly 1.5 cents from last Thursday's high (~$1.0640) to the pre-weekend low ($1.0495). It rose above $1.0550 to meet the (38.2%) retracement objective. The euro made new highs late in the North American session of almost $1.0565, to approach the next retracement (50%) and the 20-day moving average seen around $1.0570. It is consolidating today in a narrow range in about a third of a cent above $1.0530. Note that there are nearly 900 mln euros in options at $1.05 that expire today and another set for 1.7 bln euros that expire there tomorrow. Sterling surpassed its (38.2%) retracement of its losses from the second half of last week that came in a little above $1.2220 yesterday. It also nicked the 20-day moving average that was closer to $1.2215. Sterling has held below $1.2220 today and was sold to $1.2150 before stabilizing. The intraday momentum indicators suggest a return to $1.2180-$1.2200 in the North American morning is favored.


Last week, the US high-frequency reports were mostly about prices--PPI, CPI, and the University of Michigan's consumer expectations. Attention shifts back to the real sector today with September retail sales, industrial production, and business inventories. After rising by 0.6% in August, the increase in retail sales is likely to be halved and even this is flattered by auto sales and gasoline, without which a 0.1% gain in expected. The average monthly gain in the first eight months of the year was 0.4% and, in the Jan-Aug 2022, retail sales rose by an average of 0.9% a month. Excluding autos, gasoline, building materials, and food services, retail sales is expected to be flat after a 0.1% increase in August. That would make it the weakest since the 0.8% decline in March. Remember, these are nominal numbers. Real consumption rose by 0.1% in August, matching the least since March. A pullback in the US consumer will likely see upward pressure on inventories initially. August business inventories are seen rising by 0.3%, which would not only be the most this year, but the rise would offset the small net decline through July. While this may aid Q3 growth, if the inventory growth is undesirable, as we suspect, it will be a drag later. Industrial output and manufacturing production is expected to have been flat in September, and if there is a surprise, it is more likely to be on the downside. 

Late in the session the August TIC data will be reported. Foreign investors have bought nearly a net $500 bln of US stocks and bonds through July. This is down from $876 bln in the first seven months of 2022. However, recall that in the first Jan-July period in 2019, foreigners were net sellers of a small amount ($3.5 bln) of US paper assets. That said, it does seem as if the demand for US Treasuries has shifted. Foreign governments and the Federal Reserve are buying fewer US government bonds. Hedge funds, asset managers (pension funds and mutual funds), and insurers appear to be more significant buyers of US Treasuries. Central banks use of the Federal Reserve’s custody facilities boosted their (Treasury and Agency holdings by about $5.6 bln in August. The custody holdings increased from $3.32 trillion at the end of last year to $3.44 trillion at the end of August. 

Canada's September CPI will help shape expectations for next week's Bank of Canada meeting. The risk of a hike, as reflected in the swaps market has risen to about 48% from around 25% a week ago. In fact, the four-day increase is the longest rising streak since May. Given the base effect a flat month-over-month CPI reading will leave the year-over-year rate unchanged at 4.0%. The low point, so far, was recorded in June at 2.8%. The underlying core measures may tick down slightly after edging higher in August. The market will be sensitive to any disappointment. Although the Bank of Canada's Q3 survey, reported yesterday, saw weaker sentiment, inflation expectations are slower to adjust. Many businesses think that persistently high inflation will curb their sales and investment plans over the next 12 months. Consumers also continue to see elevated prices pressures that undermine plans for durable goods purchases. August retail sales is due at the end of the week and a small decline in the headline and ex-auto measure is expected. Lastly, the StatsCan reports Canada's August portfolio flows today. Foreign investors were net sellers of about C$9 bln of Canadian securities in Q1 but returned to scoop up C$36.5 bln in Q2. Foreign investors bought C$11.6 bln of Canada's bonds and stocks in July.

The US dollar peaked last Thursday near CAD1.37 and fell to almost CAD1.3605 yesterday. It has come back firmer today to probe the CAD1.3645 area. A move above the CAD1.3665 area could signal test of last week's high. It needs to break below last week's low (~CAD1.3560-70) to extend the correction from the CAD1.3785 high set earlier this month. The Mexican peso feel by about 1.4% in the last two sessions last week and rallied back about 1.1% yesterday. The US dollar met the (61.8%) retracement of the two-day rally, falling to a low late in the session near MXN17.8725. Itis firmer today but holding below MXN18.00. Soft US economic data could see the greenback fall back below the 200-day moving average around MXN17.7650. The US dollar also approached last week low against the Brazilian real set last Thursday near BRL5.0290. The 20-day moving average is around BRL5.03 and the 200-day moving average is about BRL5.0150. A break of BRL4.98 would confirm a topping pattern and project back to the mid-September lows around BRL4.84.



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A next-generation therapeutic approach for patients after spinal cord injuries

NurExone (TSXV:NRX) has created an exosome-based drug-delivery platform and is developing a novel therapy for acute spinal cord injuries.
The post A next-generation…



NurExone has created ExoTherapy, a cutting-edge exosome-based drug-delivery platform and is developing its lead product, ExoPTEN, as a novel therapy for acute spinal cord injuries.

Over the past two decades, exosomes – small, extracellular vesicles that are naturally released by many cell types and can carry a variety of molecular cargoes – have become the subject of increasingly intense scientific investigation. Studies suggest exosomes are important messengers for cells and organs, with as-yet unexplored diagnostic and therapeutic potential.

Today, NurExone Biologic Inc. (TSXV:NRX), headquartered in Haifa, Israel, is at the forefront of developing exosomes into next-generation nanocarriers for drug delivery. Drawing on deep expertise in exosome biology, NurExone has created the ExoTherapy technology platform, which comprises proprietary methods for the production, isolation and loading of molecules into exosomes for therapeutic purposes. NurExone is applying the ExoTherapy platform to create the company’s lead product, ExoPTEN, an intra-nasally administered exosome-based ExoTherapy to promote neuro-regeneration for the treatment of acute spinal cord injuries.

Harnessing the properties of exosomes for therapeutic applications

Many cells produce extracellular vesicles (EVs), which are organized into subtypes with different sizes and biological functions. EVs generally fall into two categories: ectosomes, which pinch off from the cell membrane by outward budding; and much smaller exosomes, which have an endosomal origin and are created when endocytotic multivesicular bodies fuse with the plasma membrane, releasing the vesicles they contain as exosomes.

Scientific understanding of the origins and functions of exosomes is advancing, but there is widespread recognition that, far from being cellular waste products as once thought, exosomes play an important biological role in intercellular communication and transmission of macromolecules between cells. Further, through their cargo-carrying capacity, exosomes facilitate the spread of proteins, lipids, mRNA, miRNA, and DNA, which can contribute to their general therapeutic effects.

Beyond their normal biological roles, exosomes have increasingly gained attention as vehicles for the delivery of active pharmaceutical ingredients (APIs), from small molecules and peptides to proteins and nucleic acids, as an alternative not only to other kinds of nanocarriers such as lipid vesicles, but also cell-based gene therapies.

Exosomes offer a number of advantages as drug-delivery vehicles. As naturally occurring biological entities harvested from cells, exosomes have completely natural membranes that are better tolerated than many other types of drug-delivery vesicles synthesized from scratch in the laboratory. At the same time, exosomes do not seem to elicit the strong immune responses that often hamper allogeneic cell-based therapies used to deliver therapeutic molecules and genes to patients. In contrast to alternative therapeutic approaches, exosome therapies do not require expensive and time-consuming personalization, but can be used as “off-the-shelf” therapies suitable for all patients.

Exosomes have additional benefits as EV-based delivery vehicles for therapeutic agents. First, exosomes, including those produced by the ExoTherapy platform, can cross the blood–brain barrier (BBB), while other nanoparticles, such as most liposomes, cannot. ExoTherapy opens up the possibility of targeting different cell types – and, by extension, therapeutic indications – that are beyond the reach of non-BBB-crossing EVs1,2. Second, unmodified exosomes, even those carrying no molecular payload, have intrinsic properties that can be therapeutically beneficial, such as anti-inflammatory effects. Finally, exosomes can be administered intra-nasally.

Exosomes originate from many sources. NurExone’s ExoTherapy platform employs exosomes derived from mesenchymal stem cells, which are effective in targeting neuronal cells. The ExoTherapy platform overcomes the many technical challenges involved in producing, purifying, and loading exosomes with APIs of almost any type (Fig. 1). Through its ability to carry a wide variety of therapeutic modalities, ExoTherapy stands as a true platform technology for creating “off-the-shelf” therapies that can be administered non-invasively.

Fig. 1 | From exosome to ExoTherapy: NurExone’s technology platform. NurExone is developing a platform for large-scale production of exosomes and loading of molecular cargo to create biologically guided ExoTherapy. The company’s vision is to restore motor function in patients after a spinal cord injury. siRNA, small interfering RNA. Development of a non-invasive therapy for functional recovery after SCI

The ExoTherapy platform sits at the heart of NurExone’s long-term business plan, providing a tool for creating a rich pipeline of novel therapeutic assets. In the near term, NurExone’s ambitious goal is to bring to market a novel treatment for acute spinal cord injuries (SCIs) derived from the ExoTherapy platform, ExoPTEN.

Globally, an estimated 250,000–500,000 people experience an SCI annually3, with roughly 17,000 new cases in the United States4 and 10,000 in Europe3 each year, bringing the potential market to ~50,000 new cases per year. Vehicular accidents and falls account for the majority of SCIs; sports and recreational accidents are another relatively common cause of SCI. Although the incidence of SCI is low compared with major disease such as cancer or heart disease, the effects are often devastating for patients, irreversible, and expensive to manage.

Depending on the location of the SCI, the consequences can be loss of sensory or motor control of both lower limbs (paraplegia), lower limbs and trunk, or both lower and upper limbs (tetraplegia). SCIs can also affect autonomic regulation of the body, affecting breathing, heart rate, blood pressure, temperature and bowel and bladder function.

Patients with an SCI typically spend almost two weeks in an intensive care unit, followed by a month in a rehabilitation unit. Fewer than 1% of people with an SCI experience full neurological recovery by the time of discharge, and have reduced quality of life and overall life expectancy4. SCI patients are also often frequently re-hospitalized, on average for almost three weeks, principally due to diseases of the genitourinary system, but also resulting from respiratory, circulatory and musculoskeletal problems.

In addition to the enormous physical toll SCIs exert on patients, they are also costly for health service providers. Depending on the location of the SCI, estimates place the cost of managing patients recovering from SCI at between $300,000 and >$1 million, representing a huge burden on health services and the families of new SCI patients.

There are two major obstacles to recovery from SCI. First is the poor innate regenerative capacity of the central nervous system. A major impediment to axonal growth is phosphatase and tensin homolog (PTEN), which downregulates the mammalian target of rapamycin (mTOR) activity and as a result restricts the synthesis of protein required for axonal growth. Second, SCI healing is hampered by the inflammation, myelin-associated inhibitors, glial scar components and compromised blood supply that typically surround SCIs and create a hostile environment for recovery.

ExoPTEN, which comprises exosomes loaded with small interfering RNA (siRNA) that inhibits the production of the PTEN protein, addresses both of these obstacles. The exosome component of ExoPTEN possesses intrinsic anti-inflammatory properties, which helps create a more hospitable recovery environment at the SCI site. Meanwhile, the anti-PTEN siRNA counters the suppressive effects of PTEN, activating downstream pathways necessary for the protein synthesis underlying axonal growth and regeneration (Fig. 2).

Fig. 2 | ExoPTEN for the treatment of acute spinal cord injury. a, ExoPTEN: MSC-derived exosomes are loaded with PTEN siRNA (left). b, Non-invasive delivery. c, Mechanism of action: PTEN siRNA inhibits PTEN, downregulating PTEN-related pathways and promoting cell growth and proliferation. d, NurExone’s ambitious goal for ExoPTEN is to induce at least partial functional recovery in patients with acute spinal cord injuries. MSC, mesenchymal stem cell; PTEN, phosphatase and tensin homolog; siRNA, small interfering RNA.

ExoPTEN has been tested as an intra-nasally administered formulation in an extreme rat model of acute SCI: complete transection of the spinal cord resulting in paraplegia. In an internal preclinical study carried out by NurExone, untreated rats remained almost totally paralyzed eight weeks after surgical transection, whereas rats receiving ExoPTEN for a maximum of two weeks showed significant partial functional recovery. No ExoPTEN human trials have yet taken place but NurExone believes the therapy could translate to improvements in quality of life. (Unloaded exosomes also demonstrated a mild effect on post-operation recovery, highlighting the dual-effect nature of ExoPTEN.) ExoPTEN also partially restored healthy electrophysiological traces, indicative of axonal rewiring and regeneration, and improved sensory recovery and urinary reflex restoration.

ExoTherapy’s applications beyond spinal cord injury

The regenerative effects observed with ExoPTEN in the severe spinal cord transection model suggest it may also have therapeutic applications in situations in which cell regeneration is a limiting factor for recovery. One major potential application of ExoPTEN identified by NurExone is traumatic brain injury, which affects more people than SCI and for which there are no effective pharmacological treatments that reduce mortality or improve functional recovery. Other potential therapeutic areas in which ExoPTEN may have a powerful impact include cardiac ischemia/reperfusion injury and associated disease, wound repair, and infertility.

While ExoPTEN employs exosomes to deliver siRNA, the ExoTherapy platform can just as easily be used to deliver other drug modalities. Moving forward, NurExone is planning to continue the development of in-house candidates such as ExoPTEN, and will also explore licensing possibilities for pharma companies looking for an enhanced delivery system for their drug(s) of various modalities, as well as opportunities to form partnerships and collaborations to jointly develop novel ExoTherapy-based medicines.

References Guo, S., Redenski, I. & Levenberg, S. Cells 10, 1872 (2021). Guo, S. et al. ACS Nano. 13, 10015–10028 (2019). World Health Organization. Factsheet: Spinal cord injury (2013). Available from: National Spinal Cord Injury Statistical Center, Facts and figures at a glance. Birmingham, AL: University of Birmingham at Alabama (2016).

This is third-party provided content issued on behalf of NurExone Biologic, please see full disclaimer here.

Join the discussion: Find out what everybody’s saying about this stock on the NurExone Biologic Inc. Bullboard investor discussion forum, and check out the rest of Stockhouse’s stock forums and message boards.

The post A next-generation therapeutic approach for patients after spinal cord injuries appeared first on The Market Herald Canada.

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