Just what the doctor ordered?

Nov 17, 2020 | Jay Zhang


A vaccine at last—and it appears to be a successful one at that. This helps us look through the COVID-19 valley and focus more confidently on the recovery and post-pandemic world. Do investors need to rethink positioning?


Good news at last

The Pfizer/BioNTech COVID-19 vaccine announcement on November 9 was received by equity markets with enthusiasm, with the S&P 500 rallying 1.2 percent on the day, and the MSCI World Index reaching a new all-time high the day after. The results markedly surpassed general expectations, especially in terms of the vaccine’s efficacy in preventing symptoms, and some market participants seemed surprised by the timing of its availability. The vaccine is likely to be the first one to receive regulatory approval in the U.S. and Europe, which could happen within weeks.

The vaccine’s efficacy rate of more than 90 percent, far exceeding the U.S. Food and Drug Administration’s (FDA) 50 percent hurdle rate, is remarkably high for a first-generation vaccine. This could mean other vaccines using a similar technology are likely to be successful as well. Some questions remain, including how safe the vaccine is, though this data should also be available within weeks. With time, we will find out how long the vaccine protection lasts and how efficient it is when used on the elderly, as cohorts are added to the trial.

Enthusiasm for the Pfizer/BioNTech vaccine is tempered by logistical challenges. It requires two doses to be administered three weeks apart. It also needs to be stored in dry ice to ensure a temperature of minus 70 degrees Celsius (-94 F) or below—a challenge for governments considering rolling it out, particularly for developing countries and those in temperate regions.


Market pulse
3 U.S. Treasury yields move higher on growth hopes
3 Momentum in the camp of Canadian value stocks
4 UK and Europe equities rally on positive vaccine news
4 China tech stocks experiencing a selloff


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