A few days ago, the market was surprised by an unusual news about a treatment with evidence of success in combating COVID-19, under development by Gilead, but which was denied three days later. On Wednesday the market was again plagued by the Gilead effect, that is, the promise that an experimental drug developed by the North American company passed an important clinical test and that it could have an expeditious approval, according to some information, the regulatory agency from the drug sector, the FDA, given indications for possible “immediate” approval in the use of patients affected by the new coronavirus.
Regardless of the short-medium term future, the fact is that the news eclipsed data on US GDP in the first quarter, which fell below forecasts, with a drop of -4.8%, against the forecast -3.5%, thus marking the biggest contraction since the financial crisis of 2008. Equally unequivocal is the fact that this month risks being the best for the S&P500 of the last 40 years, which is very impressive, considering that we are not many away from previous historical highs, but with much higher market multiples, which does not predict a good outcome for this unrealistic behaviour.
