Market Welcomes News From Moderna Vaccine, But Some Believe It’s Overbought
The global fight against the new coronavirus got more good news this Monday.
The American biotech firm Moderna announced its coronavirus vaccine is more than 94% effective against COVID-19.
The news came exactly one week after Pfizer and its German partner BioNTech announced similar results, though Moderna claims its vaccine is even more effective in preventing COVID-19.
Moderna was the second American drugmaker to report preliminary test results exceeding expectations.
It means the U.S. could have two vaccines authorized for emergency use still this year, with as many as 60 million doses available.
The market once again welcomed the news with enthusiasm.
The Dow gained 470.63 points, or 1.6%, to close at 29,950.44, logging intraday and closing record highs. The S&P 500 rose 1.2% to 3,626.91, posting an all-time closing high. The Nasdaq Composite advanced 0.8% to 11,924.13.
Shares from sectors hit hard by the pandemic, like airlines, cruise lines, hotels, and restaurant chains, surged with new hopes that consumers should return soon.
Moderna stocks, which have more than quadrupled this year, jumped almost 10% today.
On the other hand, Pfizer stocks dropped 3.34% since Moderna is more effective and easier to distribute.
The Pfizer product needs to be stored in very cold temperatures (minus 70 degrees Celsius), while the one from Moderna can be kept at normal refrigerated temperatures, making the logistics simpler.
However, some experts highlighted that the market is extremely overbought and didn’t pay much attention to the challenges regarding distributing the vaccine.
It will take time for a vaccine to be available for the entire population.
One of Pfizer-BioNTech’s vaccine creators, Ugur Sahin, co-founder and CEO of the German firm, said life could return to normal only by the end of 2021.
Meanwhile, cases of COVID-19 are spiking rapidly in the U.S. and Europe today.
The U.S. is reporting about 150,000 new infections and 1,000 deaths per day.
More cities and states are announcing restrictions on activities trying to contain the surge of the cases.
Since the short term outlook is bleak, some defend the necessity of more fiscal stimulus, despite the recent vaccine news. The negotiations, though, are still deadlocked in Congress.