Made in the U.S.A.

By Matthew Klein |  Friday, July 10

Hope Springs Eternal. Remdesivir, the antiviral drug manufactured by Gilead Sciences might lower the fatality rate of COVID-19, at least according to a new analysis from Gilead that wasn’t based on actual clinical trials. The news pushed stocks steadily higher throughout the day, with the largest gains in some of the most virus-sensitive sectors: cruise lines, airlines, oil refiners, and banks. Tech and pharma stocks were the relative laggards.

While stocks were up, traders weren’t exactly enthusiastic. According to our colleagues at Dow Jones Market Data, total stock trading volume today on the NYSE and Nasdaq was the lowest it’s been since Feb. 21—just after the S&P 500 index peaked and well before investors started worrying about the impact of coronavirus.

The caution makes sense: While an effective antiviral treatment would undoubtedly be good news, for now we still have to deal with the reality of an outbreak that continues to spiral out of control. Over 50,000 Americans are currently hospitalized with the virus, almost double the number in mid-June.

If investors are bored of paying attention to the virus, perhaps they should start focusing more on trade policy. Contrary to what some in Beijing and Brussels may have hoped, it looks as if American economic nationalism is here to stay regardless of who wins in November.

“American workers can out-compete anyone, but their government needs to fight for them,” according to a new plan to reinvigorate domestic manufacturing from Democrat Joe Biden. His proposal is a mix of government support for research and development, additional spending on U.S.-made goods, changes to tax incentives that currently encourage companies to move production abroad, and new procurement rules meant to favor American producers, among other things.

Also notable is active support for “rebuilding domestic manufacturing of critical products to ensure that the U.S. and our allies have the capacity and resilience to make what we need for our national security, rather than be dependent on countries like China.” If enacted, the program would be a significant departure from the bipartisan consensus of the past several decades, which held that America had supposedly transcended the grubby work of making physical things and had become a “service economy.”

Meanwhile, President Trump laid to rest any hopes of an improved trade relationship with China, telling reporters today that the “phase two” deal was no longer on the agenda. The “phase one” agreement—negotiated before the pandemic—was a set of ambitious promises by Chinese state-run companies to buy more American exports. Phase two was supposed to address the underlying problems with Chinese economic policy, without which the purchase agreement would be useless. Unsurprisingly, the current pace of purchases is hopelessly behind schedule thanks to the virus. Expect things to get worse before they get better.

Watch our TV show on Fox Business Friday at 10 p.m. or 11:30 p.m. ET; Saturday at 10 a.m. or 11:30 a.m.; or Sunday at 7 a.m., 10 a.m. or 11:30 a.m. This week, see an interview with Adena T. Friedman, president and CEO of Nasdaq, on what's ahead for that tech-driven market. Plus, Thomas Michaud, president and CEO of Keefe, Bruyette & Woods, joins a discussion of what to expect when big banks report earnings.