13 11/20 13/11/2020

Promising Vaccines by Pfizer and BioNTech

Although covid-19 cases are going through the roof in Europe and the U.S., the world received amazing news on Monday morning. Biotech companies Pfizer and BioNTech reported that their vaccine showed more than 90% effectiveness in preventing covid-19. 90% may seem far from 100%, but according to medical experts no vaccine is100% effective. Many of the tried and true vaccines on the market are less than 75% effective. To put it in context, the FDA’s minimum allowed effectiveness for covid-19 vaccines is 50%. While 50% can offer some protection, 60-70% can lead to herd immunity if used massively. An effectiveness of more than 90% is thus an extensive protection. Pfizer and BioNTech are looking to file for emergency use authorization (EUA) from the Food and Drug Administration (FDA) later this month. This news together with the Biden victory increased investor’s confidence and had the markets showing it. It will take time to get FDA approval and it will take even longer for mass distribution. Investors appear to be optimistic nonetheless.

Besides the market upswing seen this week we also saw some sector rotations taking place. Investors were dumping their tech and work from home stocks at the beginning of the week and moving into sectors such as oil and energy, banks, cruise lines, and airlines. In other words, a rotation from growth to value started to take place. Mid-week the reverse happened. According to Jeffrey Halley, an analyst at Oanda, value stocks will keep thriving in the near future unless there are hindrance in vaccine FDA approvals. Biotech company Moderna is also expected to release early results of their phase 3 study in the coming days. An effective rate of 90% or more will probably lead to another market upswing as it restores market confidence even more.

Read more in this week's newsletter: Weekly Newsletter #46

 

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