Pfizer Vaccine Boosting Stocks

Thank you, Pfizer

Stocks surged following positive vaccine news from Pfizer and BioNTech SE, which announced that their vaccine trial had successfully prevented 90% of symptomatic infections in thousands of volunteers. Pfizer shares saw a rise of up to 15% during intraday trading.

Pfizer Vaccine Boosting Stocks

At its peak, NASDAQ was up nearly 4%, but later pulled back slightly. However, the Dow Jones and S&P 500 surged by 4.73% and 3.55%, respectively. While tech stocks saw muted reactions, cyclical and value stocks performed the best, with JPMorgan Chase and Visa rising by 12% and 9.3%, respectively.

Pfizer Boosting Oil

WTI and Brent Crude also saw impressive gains, jumping nearly 10% on the vaccine news, fueling optimism in the oil market. The potential rollout of a vaccine could drive a recovery in global and domestic travel, boosting demand for oil.

Gold’s Decline

Gold dropped almost 5% as the risk-on sentiment took hold, breaking its earlier correlation with equities.

Pfizer’s Progress

Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, called the vaccine’s 90% effectiveness “extraordinary.” Peter Jay Hotez, a vaccine researcher at Baylor College of Medicine, also expressed optimism, stating that the vaccine “looks promising” and could serve as proof of concept for a human COVID-19 vaccine.

Vaccine Availability by Year-End

If Pfizer and BioNTech can demonstrate continued efficacy and safety in the coming weeks, the U.S. could have two approved vaccines by the end of the year. This potential development signals a positive outlook for risk-on markets. Along with a Joe Biden victory, the markets are showing strong demand for a vaccine to drive further gains.

Global Vaccine Orders

Several countries, including New Zealand, the U.K., and Japan, have pre-ordered substantial quantities of the vaccine, putting them on track to potentially achieve herd immunity.

The Future of the Markets

With the backing of fiscal and monetary stimulus, and many consumers having saved money during lockdowns, pent-up demand is expected to drive growth. Investors who have stayed on the sidelines during the pandemic may seize this moment to shift out of bonds and cash and re-enter the equity markets.

Before the news, the market knew a vaccine would likely spark a risk-on rally. Now, with promising developments, traders are pricing in a vaccine by year-end. Any delay could result in significant disappointment.