🐒 MonkeyPox Causes Stocks to Surge

MARKET UPDATE

Good Morning Investor! On Friday, shares of biotech company Grail Inc ($GRAL) surged over 5%. The cancer test maker, fresh from its split with former parent company Illumina, announced its cost-cutting plans with all the subtlety of a sledgehammer to a petri dish. Grail decided to trim the fat by laying off 350 workers in its Bay Area location. This price reaction proves once again that Wall Street has a morbid fascination with corporate downsizing.

TODAY’S BIG HEADLINES

MonkeyPox Sends Big Pharma Higher

US Farms are Having a Very Tough Time

The UK Higher Education System Suffers Financial Disaster

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HEALTHCARE & BIOPHARMACEUTICALS

MonkeyPox Sends Big Pharma Higher🐒

All Eyes on Sweden: OOn Thursday morning, news broke faster than a teenager's voice that a case of the new Mpox variant clade 1b had been detected in Sweden, sending shockwaves across Europe. This new strain, which originated in the Democratic Republic of Congo, has been spreading rapidly, with more than 17,000 cases and 571 deaths in Africa this year. The situation has become so dire that the World Health Organisation (WHO) officially classified it as a "public health emergency of international concern".

Cashing In on the Pox: We at Tickergeek, always ready to make a buck off a crisis, immediately turned our attention to the impact this would have on global markets, with a particular interest in vaccine makers. After all, nothing says "ka-ching" like a good old-fashioned health scare. Forunately, a vaccine already exists for the Mpox virus. Currently, there are only a few companies with approved vaccines for Mpox.

• Shares of Danish biopharmaceutical Bavarian Nordic ($BAVA) saw its share price jump 14% on Thursday, and a further 17% on Friday. The stock is now up a whopping 47% in just 5 days. Why? Well, Bavarian has an approved Mpox vaccine which it sells under the names Jynneos, Imvamune and Imvanex—and its product is the vaccine of choice by healthcare providers on account of its more favorable risk profile.

• Meanwhile, Emergent BioSolutions ($EBS), a U.S. firm that acquired a smallpox vaccine from French pharma giant Sanofi in 2017 called ACAM2000 that could be made available for use against mpox is also riding the pox wave. Their stock is up 55% in the last 5 days, giving new meaning to the phrase "sick gains."

The Also-Rans of the Vaccine World: Bavarian Nordic’s mpox vaccine is the only shot to have secured widespread approval for use against the virus around the world. Japan’s KM Biologics secured domestic approval for its LC16 vaccine during the global mpox outbreak in 2022, but is not used or authorized widely around the world. It's the vaccine equivalent of that indie band you've never heard of. Another shot for smallpox that could be turned against mpox has been approved in Russia, which the WHO says is the “first fourth-generation smallpox/orthopoxvirus vaccine.” It was developed and registered by the country’s Vector institute.

AGRICULTURE

US Farms are Having a Very Tough Time🚜

When the Tractor Hits the Fan: Oh Deere, it appears as though the farming and agriculture industry in the US is reaping what it sows — at least according to Deere & Co's ($DE) latest quarterly earnings. The world's largest farm-equipment manufacturer, known for its iconic green and yellow machines, is facing a harvest of problems that would make even Old MacDonald lose his E-I-E-I-O.

A Bushel of Mixed Signals: Deere reported a colossal 17% drop in sales year-over-year, along with a 42% nosedive in profits. Yet somehow, the stock shot up 6% — proving once again that Wall Street logic is about as straightforward as a cow's digestive system. The company reaffirmed its annual profit forecast, which apparently was enough to make investors happier than a pig in mud. In an effort to trim the fat and preserve its profit margin, Deere has laid off an estimated 1,500 US workers recently. This move has drawn more ire from unions than a bull sees red. The biggest bone of contention? The company's $43 billion in share buybacks over the past two decades.

A Cornucopia of Bad News: The USDA forecast that this year farms will rake in $116 billion, down 27% from last year and down 41% from 2022. That’s the biggest two-year decline in over four decades.

• Corn prices fell to below $4/bushel in July, marking a 37% drop from last summer’s peak.

• Seed and chemical costs have spiked, and intense heat waves and droughts have damaged crops and livestock.

These problems all happening in conjunction with one another means farmers simply don't have the spare change lying around to invest in new farm equipment. Deere and Tractor Supply Co ($TSCO) are finding out the hard way that you can lead a horse to water, but you can't make it buy a combine harvester.

INTERNATIONAL ECONOMICS

The UK Higher Education System Suffers Financial Disaster🎓

Britain's Brainy Export: Believe it or not, Britain has a bigger export than music stars who make teenage hearts throb or period dramas that make grannies swoon. The UK's education system is so renowned, it's practically wearing a crown and sipping tea. Oxford University, for instance, is so old it could've taught the Aztecs a thing or two about building empires. But this wonder of a system is entering a rather troublesome period, and it's being caused by its own population. Talk about biting the hand that teaches you!

When Success Becomes a Pain in the Class: This year was a superb one for Britain's education system, with 9% more students getting into top-level universities than last year. British students are acing their exams like they're going out of style. However, this success story is giving university accountants more headaches than a night out at the pub. Why? Fewer international students are crossing the pond to study, and that's where the real money is.

• Despite tuition fees only being introduced back in 1998, capped at a modest £1,000, they've since inflated faster than a bouncy castle at a kid's birthday party. They now stand at a eye-watering £9,250 ($11,860) per year. And believe it or not, universities actually run at a loss taking on British students.

• To offset these losses, universities have pushed tuition fees for international student into the stratosphere. Oxford University, for example, charges overseas students between £33,050 and £48,620.

The Post-Pandemic Slump: As travel restrictions eased after the pandemic, the UK saw a sharp influx of international students, so much so that in the 2021-2022 academic year these students made up 24% of the nation's total student population. Now, though, the UK's higher-education institutions are coming down off that high. It could spell a major funding crisis, with UK universities seeing a nearly 50% fall in the number of overseas student applications last year.

• The international student economy in the UK is worth £42 billion, and the fear is that if that market contracts then universities will go bust.

• One potential cause of this sudden drop is the UK’s stricter immigration policies, making it so that foreign students can no longer bring their partner from abroad with them.

MORE NEWS

Additional market-moving events🌎

Apple Robotics: Apple’s said to be building a device with a “thin robotic arm” meant to move a screen. iPhone sales have sagged, but Apple’s attempts at new hardware have been iffy. (Bloomberg)

Revolut Keeps Rising: British fintech startup Revolut said on Friday that it was valued at $45 billion in a secondary share sale with new and existing investors. The valuation comes just weeks after Revolut was granted a banking license with restrictions in the UK. (CNBC)

International Conflict: Media platform X said on Saturday it would close its operations in Brazil “effective immediately” due to what it called “censorship orders” by Brazilian judge Alexandre de Moraes. (FT)

More Crypto Trouble: The SEC sued crypto co NovaTech, alleging its founders fraudulently raised $650M+ from 200K investors. The biz promoted itself as a crypto-investment operation, but regulators called it a pyramid scheme that targeted Haitian Creole-speaking churchgoers. (Reuters)

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