November 9th, 2020

Market Volatility: Encouraging vaccine news 

The equity market surged higher out of the gate today on news that a vaccine being developed by Pfizer and BioNTech SE prevented more than 90% of infections in their large-scaled study. The hope has been for 60-70% effectiveness and this seems much better than that.

The expected leaders on news like this were true to form. Value stocks, particularly Energy, Leisure and Entertainment, Airlines, and Financials stocks were up by over 7% at the time of writing. The rotation away from the prior leaders was evident with the FANG-type stocks (i.e., Facebook, Apple, Netflix, Google) down slightly on this very big rally day. 

The announcement represents the most encouraging scientific advance so far in the battle against the virus. These results are also thought to bode well for other trials, such as the one being conducted by Moderna Inc, given the use of similar technology. There are still several outstanding questions, such as the vaccine’s safety for the elderly, whether it prevents severe disease, or how long the protection might last.

S&P 500: Intra-day Performance 

(Source: Bloomberg)

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