THE NEUTRAL ZONE
On Monday, the stock market surged 900 points after reports of encouraging results for early COVID-19 vaccine testing done by Moderna.
The company conducted a preliminary clinical trial for the vaccine and out of the 45 subjects tested, eight subjects never became sick with coronavirus. Just after reporting the completion of phase 1 testing results, Moderna saw a 25% jump in their stock Monday. Despite the fact the U.S continues to see a rise in infection numbers, the spark in the stock market indicated an optimistic feeling from investors. This also came after Fed Chairman Powell stated on 60 Minutes Sunday, “Assuming there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of the year.” Now, Moderna will begin phase 2 of testing, which will require a much larger dataset.
With the spike in the market, there is also concern that the sudden spike due to vaccine news shows that the stock market will not get better until a vaccine is released to the public. In part due to this theory, the market “stalled” Tuesday resulting from a lack of new COVID-19 breakthroughs. While the spike benefited investors, some think that if the market reacting that way could mean the worse is yet to come, as the market is relying on a vaccine for long-term improvements.
Jim Cramer advises investors not to get too optimistic over Moderna vaccine progress – CNBC – 5/18/2020 CNBC’s Jim Cramer on Monday recommended investors adopt a “barbell” investment strategy as Wall Street looks forward to a reopened U.S. economy. A barbell strategy is one where investors opt to buy securities that fit into two likely scenarios and avoid the ones in between. In Cramer’s case, his investment thesis on one end is to find stocks that can work in the pandemic and on the other end those that will work post-pandemic.
Stock futures pause following rally on vaccine hopes and economies reopening – Fox Business – 5/19/2020 U.S. equity futures are trading lower after being higher overnight on optimism about a potential vaccine for the coronavirus and as states reopen for business. The major futures indexes are indicating a decline of 0.5 percent when Wall Street begins trading on Tuesday.
Dow surges 900 points as vaccine progress drives economic-reopening hopes – Business Insider – 5/18/2020 Investors have been closely watching for updates that can provide guidance about economic-reopening efforts, and they were encouraged by Moderna’s results. Monday’s gains erased losses from last week, when the major indexes slumped following data that showed the economic impact of the coronavirus pandemic.
Wall Street closes 900 points higher as vaccine news prompts hope of economic recovery – NBC News – 5/19/2020 Wall Street soared Monday after U.S.-based drugmaker Moderna said it has seen “positive” results from its first human trial for a vaccine against COVID-19, prompting hope among investors that economic recovery could be on the horizon.
Michael Batnick on Twitter, 5/18/20: The economy continues to mask the real strength in the stock market.
Danielle DiMartino Booth on Twitter, 5/18/20: STRIKING WHILE THE IRON IS HOT @business headline crossing now: “MODERNA STOCK OFFERING IS SAID TO PRICE AT $76 PER SHARE”
Angie Skys 8 on Twitter, 5/18/20: Well the US stock market rallied today; there was a huge jump in the stocks. What does this mean for the average person? Not much right now, but the elites are confident you’ll get your butt out there and start making them money again. Good times are just around the corner
The Philippine Star on Twitter, 5/19/20: President Duterte said the COVID-19 vaccine being developed by US biotech company Moderna will not be available until January next year.