Top 5 Things to Know in the Market on Monday, August 24th

(C) Reuters.

By Geoffrey Smith

Investing.com — President Trump attacks the FDA for foot-dragging on the authorization of new drugs on the eve of the Republican convention. Epic Games gets a helping hand from Microsoft (NASDAQ:MSFT) in its fight against Apple (NASDAQ:AAPL); and two major storms at once threaten oil production in the Gulf of Mexico. Here’s what you need to know in financial markets on Monday, August 24th.

1. Trump lashes out at FDA

President Donald Trump accused unnamed officials of delaying the process of drug authorizations by the Food and Drug Administration in order to prevent his re-election.

Trump said “deep state” interests were “making it very difficult for drug companies to get people in order to test the vaccines and therapeutics. Obviously, they are hoping to delay the answer until after November 3rd.”

The comments came as the FDA issued an Emergency Use Authorization of convalescent plasma for treating Covid-19 patients. FDA commissioner Steven Hahn, a Trump appointee, said that the decision isn’t a full approval and that it is still evaluating it for effectiveness and safety.

Separately, the Financial Times reported that Trump is also pushing for AstraZeneca’s experimental Covid-19 drug to get EUA.

2. Republican convention begins, Conway departs

The Republican Party’s national convention begins with a series of remote events that will be live-streamed.

President Trump, who trails his Democratic Party rival Joe Biden in national opinion polls by some eight percentage points, is set to present his first term as an American success story derailed by what he calls the ‘China virus’, according to The Wall Street Journal.

The week began on an inauspicious note, as White House Communications chief Kellyanne Conway announced her resignation, citing family issues. Conway’s husband George has been a vocal supporter of The Lincoln Project, an anti-Trump Republican grouping.

3. Stocks set to open higher

U.S. stock markets are set to open higher, ostensibly lifted by hopes for more rapid deployment of drugs to treat Covid-19.

By 6:45 AM ET (1045 GMT), the Dow futures contract was up 268 points or 1.0%, while the S&P 500 futures contract was up 0.8% and the Nasdaq 100 futures contract was up 0.9%.

The more optimistic tone has also pushed the dollar index back below 93. It was down 0.3% at 92.927, while gold futures were up 0.5% at 1,956.60 a troy ounce.

4. Storms threaten Gulf of Mexico oil output

Oil prices rebounded from their losses of late last week, in a movement largely driven by risk assets in other classes.

Market participants are closely watching the track of two tropical storms that have affected production in the Gulf of Mexico.

The twin threat from Hurricane Marco and Tropical Storm Marco had shut in some 58% of output in the Gulf – just over 1 million barrels a day – on Sunday, according to government information.

By 6:30 AM, U.S. crude futures were up 0.8% at $42.86 a barrel, while Brent futures were up 0.7% at $45.25

Storms tend to also disrupt demand for crude from Gulf coast refineries, so the effect on U.S. prices is rarely fully reflected in the price of benchmark contracts.

5. Epic gets a helping hand from Microsoft

Epic Games gained an important ally in its fight against Apple and Alphabet (NASDAQ:GOOGL) at the weekend, as Microsoft said in a court filing that letting Apple block Epic’s developer account would badly hit game makers by stopping them from using Epic’s Unreal Engine.

The Unreal Engine, which powers Fortnite and other games, is a suite of technologies that provides a framework for making 3D graphics.

Epic licenses the engine to companies – including Microsoft – that use the technology.

Microsoft’s statement was filed as part of a lawsuit brought by Epic against Apple over its insistence on a 30% cut of in-app purchases. A hearing in a California district court is scheduled for later Monday afternoon.