A COVID-19 vaccine may be rolled out by March 2021 to the most vulnerable, which along with other advances could fundamentally change the course of the pandemic, a senior World Health Organization (WHO) official said on Monday.
Bruce Aylward also told the WHO’s annual ministerial assembly that interim results announced from Pfizer Inc’s late-stage vaccine trials were “very positive”.
“There is still much work to be done, this is just interim results…but some very positive results coming today which should hold great promise hopefully for the entire world as we move forward,” Aylward told the 194-member state forum.
Pfizer said its experimental COVID-19 vaccine with partner BioNTech was more than 90% effective.
WHO Director-General Tedros Adhanom Ghebreyesus tweeted shortly afterwards: “We welcome the encouraging vaccine news from @pfizer & @BioNTech_Group & salute all scientists & partners around the who are developing new safe, efficacious tools to beat #COVID19.’
Aylward, referring to all three pillars of the ACT (Access to COVID Tools) Accelerator launched in April, said: “In diagnostics we are in a position to massively expand testing globally, in therapeutics we have sufficient tools right now to substantially reduce the risk of dying from this disease and in the area of vaccines – with the news of today especially – we are on the verge of having the readiness in place to roll out doses for high-risk populations in the late first quarter, early 2nd quarter.”
However, he warned that an “acute funding gap” of $4.5 billion could slow access to tests, medicines and vaccines in low- and middle-income countries.
News catapults investors’ economic-recovery bets
News of an effective vaccine against the novel coronavirus is fueling bets that a global economic recovery will buoy wide swaths of the market that have struggled under nearly nine months of the COVID-19 pandemic.
Pfizer and its German partner BioNTech SE expect to seek US authorisation this month for emergency use of the vaccine, raising the possibility of a regulatory decision as soon as December.
Investors piled into banks stocks, airlines and other economically sensitive companies that had been battered by months of coronavirus-led lockdowns and travel bans, pushing the Dow industrials and S&P 500 to fresh record highs, while havens like gold and the Japanese yen sold off and the US Treasury yield curve steepened.
For months, many investors viewed the development of an effective vaccine against COVID-19, which has killed 1.2 million people globally, as the most important catalyst for healing the global economy and bringing about the next major shift in financial markets.
The prospects of a working vaccine sometime next year could force investors to reevaluate a range of recent bets, from how big of a fiscal stimulus lawmakers may need to provide to whether the Federal Reserve will keep interest rates near historic lows for as long as previously expected.
It may also dent the allure of the big technology and momentum stocks, whose revenues have proven durable during the pandemic. Some of those huge stocks, such as Amazon.com, were underperforming on Monday.
“I think this really takes two big uncertainties – the health impact of COVID and the economic impact of COVID – and creates a pathway now that I think investors can see to progress and to the restoration of our health and the economy,” said Jack Ablin, chief investment officer at Cresset Capital Management.
To be sure, obstacles remain before achieving broad protection against the coronavirus.
Pfizer is waiting for more complete safety data before seeking emergency U.S. approval for the vaccine. Should the vaccine be authorized, logistical challenges potentially could undermine distribution while many Americans carry skepticism about vaccines that could prevent widespread inoculation.
“There’s a long road ahead still,” said Nigel Green, the chief executive of deVere Group, in an note to investors. “I would urge investors to remain optimistically cautious and avoid the ‘buy everything’ mindset.”
Investors have anticipated that an effective vaccine could be a catalyst for industries that have been crippled by economic shutdowns designed to control the coronavirus pandemic. Those include airlines, cruise ships, hotels, casinos, all of which were surging on Monday.
The broad dissemination of a working vaccine also could lift sectors seen as particularly sensitive to the economy, including energy, financials and industrials. Amid the gain for the S&P 500 on Monday, those sectors were outperforming.
“What we’ve done is given ourselves some optionality for a recovery trade, or a vaccine trade, by having some exposure to financials,” said Binay Chandgothia, a Hong Kong-based portfolio manager at Principal Global Investors, before news of the vaccine was released.
Banks benefit from increased economic activity and would be helped if bond yields rose, he said, adding that he had increased exposure to growth-sensitive small companies and would buy stocks in Singapore and Hong Kong if trade and travel pick up.
Brian Jacobsen, senior investment strategist at Wells Fargo Asset Management in Wisconsin, said ahead of the vaccine news that industrials offered broad exposure to a rebound in confidence in areas from building products to aviation.
Some global investors had also set up plays before Monday that would benefit from a potential shift in market leadership that a vaccine could bring.
Shinji Naito at Japan’s SPARX Asset Management, which has $12 billion under management, hopes a vaccine could trigger a payoff from shorts in stocks pumped up by the pandemic, such as some technology firms, while helping long investments such as realtor Tokyo Tatemono, he said before Monday’s news.
