Hope you’re enjoying the weekend.
Oil was a major catalyst over the last week. After diving well into negative territory on a severe lack of demand, and far too much supply, oil began to pivot higher.
However, it’s not time to rush back into oil just yet.
The only reason oil is ticking higher is because of hope for further production cuts, and President Trump’s threat to Iran in the Persian Gulf. Other than that, there are no real reasons to get excited about an oil price recovery. For one, demand will not return any time soon thanks to the coronavirus, and two, there’s so much supply we’ve run out of places to store it.
One analyst says oil could plunge to negative $100. “Oil is difficult to handle and if you can’t put it anywhere, it becomes an environmental liability literally. So, over this next month storage is now effectively full, you could see some extreme negatives in terms of prices offered,” Paul Sankey, managing director at Mizuho Group, told Yahoo Finance.
While we hope it doesn’t come to that, far too much supply could make it a possibility.
As we wait to see what happens next in the markets, here’s what is piquing our interest.
Opportunity No. 1 – BioNTech (BNTX)
BioNTech and Pfizer just secured approval to conduct human clinical trials of a possible coronavirus vaccine in Germany. According to Bloomberg, “Regulators gave the green light to test the companies’ proposed vaccine on 200 healthy people aged 18 to 55 years in a first stage, and on additional high-risk candidates in a second stage.”
The two expect to win approval for testing in the U.S. shortly. “It’s a good sign that the development of vaccines in Germany is at a stage at which we can begin with the first trials,” Health Minister Jens Spahn said, as also quoted by Bloomberg. “At the same time, it’s important to remember that it will take months before a vaccine will be fully tested and can actually be available.”
Opportunity No. 2 – Alpha Pro Tech (APT)
Alpha Pro Tech has been ticking higher on face mask demand. With the U.S. CDC advising that everyone should wear a face mask in public, face masks are under considerable demand. There’s just one problem. There’s been a severe shortage.
As a result, APT is seeing sizable demand for product. “As of April 7, 2020, APT has booked approximately $36.7 million in orders for the company’s proprietary N-95 Particulate Respirator face mask since January 27, 2020, an increase of $14.1 million, or 62%, from the $22.6 million in orders reported as of March 11, 2020, and the company continues to experience greater demand. APT has seen exponential increases not only in near-term demand, but also in longer-term ongoing purchase orders that have request dates that extend beyond the third quarter of 2020 and into the first half of 2021.”
Opportunity No. 3 – Moderna Inc. (MRNA)
Just last week, we highlighted MRNA as an opportunity, as it traded at just $44.76. it’s now up to $49.45, and exploding higher as it moves forward with COVID-19 vaccine plans. It was recently awarded an $843 million U.S. award to develop a vaccine, and hopes to have safety data from Phase 1 trials shortly.
