Dow stumbled on COVID mass-vaccinations timeline and mini-lockdowns

calendar 17/11/2020 - 18:43 UTC

The U.S. stock market (Dow Jones Industrial Average: DJ-30) closed around 29950.44 Monday, soared almost +1.60% (+470 points) on Moderna’s COVID vaccine boost. But on early Tuesday, Dow stumbled over -400 points on the fact that despite vaccine by Dec’20, the actual mass-vaccinations may start by April’21 and will take a minimum of one to three years (Q2-2021-24) for a significant population to get the required doses.

Dow was also under stress on soft U.S. retail sales data amid the resurgence of COVID-19 and partial lockdowns/restrictions across various U.S. states. Also, the risk trade sentiment was affected as Trump reportedly wanted to attack Iran last week (for election defeat revenge) based on a report by IEA that Iran is on the verge of the development of nuke. But Pence and Pompeo may have refrained Trump from such action, which may cause a widespread conflict in his last few weeks in the White House.

On Monday, as highly expected, the U.S. Biotech Moderna announced that its coronavirus vaccine candidate is 94.5% effective, better than 90% of similar Pfizer-BioNTech vaccine (m-RNA) of around 90%. Also, another important breakthrough was made on the distribution issue, as Moderna claimed its mRNA vaccine could last up to 30 days at standard refrigerator temperatures of 2 to 8 degree Celsius; 180 days in standard freezer temperature -20 degree Celsius  (against Pfizer’s requirement of -70 degree Celsius). Moderna’s mRNA vaccine can also be kept at normal room temperature from freezing conditions for up to 12 hours.

In brief, it appears that Moderna’s mRNA vaccine is better for logistical/distribution and application (no dilution required) than Pfizer-BioNTech’s, which is also a great relief.

In any way, both mRNA vaccines (Pfizer and Moderna) will require at least two doses in a difference of a few weeks (21-28 days) and the required protection (immunity/antibodies) should grow after around (7-14 days) of 2nd booster dose. Thus the COVID vaccination course may take as long as 30-45 days for Pfizer and Moderna. Moderna said it plans to submit for EUA with the U.S. FDA in the next few weeks and it expects to have 20M doses this year, increasing the number to around 1B in 2021. Moderna’s mRNA vaccine (100 mcg) costs around $38 (in the U.K.) against Pfizer’s $20 (30 mcg) for two shots.

Considering, Moderna’s claim of easier cold storage and distribution/logistical factors, a developing country (DE) like India, having an inadequate cold chain system, may opt for Moderna rather than Pfizer’s. But the cost of Moderna at around $38 or even Pfizer at $20 is much higher than India’s budget of $2-4. Thus India/DEs may have to ultimately depend on AstraZeneca and other similar (adenovirus) traditional vaccine rather than the breakthrough m-RNA technology which introduces into the body a messenger sequence that contains the genetic instructions for the vaccinated person's cells to produce the antigens and generate an immune response.

The mRNA vaccine is usually faster and cheaper to produce than traditional vaccines. But overall, it’s still not clear whether the Pfizer/Moderna corona vaccine can generate a T-Cell response, vital to prevent any future pandemic caused by a similar coronavirus. Still, unlike the AstraZeneca-Oxford traditional COVID vaccine, the Pfizer/Moderna BioNTech vaccine relies on (messenger) mRNA technology, which effectively encodes immunity to the virus directly into human genes. The Oxford (adenovirus) vaccine also claimed successful T-cell responses.

Now after the COVID vaccine by Dec’20 as highly expected, the main focus would be the process of mass-vaccinations as a mere vaccine is not enough to eradicate the coronavirus; the world needs COVID vaccinations at the earliest for normal life/economic activities.

The co-inventor of mRNA vaccine technology Dr. Sahin of BioNTech said on Monday that the company's coronavirus vaccine developed in collaboration with Pfizer will likely be ready for delivery by early January. However, Sahin warned that his company's vaccine along with three or other potential COVID-19 vaccine candidates will not be enough to protect the entire global population from the virus. And over the weekend, Dr. Sahin said he expects this winter to be ‘hard’, but that next year there could be a ‘dramatic reduction’ in the number of coronavirus infections.

On Monday the U.S. President-Elect Biden tweeted a cautionary stance as the development of an effective vaccine is just a 1st step. The mass-vaccinations, which are still months away, need to be done on a large scale for the much-awaited herd immunity, and until then the public needs to maintain proper mask-wearing with adequate social distancing protocols. Biden also warned about a ‘very dark winter’ for the U.S. in the coming days.

Today's news of a second vaccine is further reason to feel hopeful. What was true with the first vaccine remains true with the second: we are still months away. Until then, Americans need to continue to practice social-distancing and mask-wearing to get the virus under control.

Once again, I congratulate the brilliant women and men who produced this breakthrough and have brought us one step closer to beating this virus. I am also thankful for the frontline workers who are still confronting the virus around the clock.

On Monday, Trump also tweeted after the Moderna vaccine progress news: STOCK MARKET GETTING VERY CLOSE TO 30,000 ON NEW VACCINE NEWS. 95% EFFECTIVE! European Countries are sadly getting clobbered by the China Virus. The Fake News does not like reporting this!

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Bottom line:

COVID vaccine may be approved by Dec’20 as EUA but mass-vaccinations may take 2022-24

Both companies’ (Moderna and Pfizer) results did not include the actual data from their trial and have yet to be peer-reviewed. Because the majority of severe side effects from vaccines usually come in the first two months after the final booster dose/vaccination, the U.S. FDA is requiring that companies collect two months of safety data before any EUA. Moderna and Pfizer both said they expected to have that data available within weeks. Most U.S. states as-well-as the rest of the world will go for vaccination first for healthcare workers, then vulnerable populations/senior citizens and essential workers. And the mass vaccination in the U.S./Europe/other parts of the world can start by early Q2-2021 after getting approval for regular use.

In a developed and relatively less populous country (350M) like the U.S., it may take almost 2 years even if the U.S. can vaccinate 1M/day for a single dose (two doses required). Thus the economic recovery may continue to be fragile well into Dec’2021 unless there are significant mass-vaccinations and a large part of the public feels confident about normal social/economic activities. As the actual COVID-19 mass-vaccinations will take its time through 2021-2024 (developed-developing-under developed countries), until then, the economic recovery may continue to be gradual (U) rather than sharp (V) as the underlying COVID mitigation protocols will remain in force till a significant mass-vaccinations.

Technical Outlook: SPX-500, DJ-30, and NQ-100 (Futs):



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