- The Dow Jones Industrial Average (DJIA) headlined another bullish day on Wall Street
- A coronavirus vaccine could potentially arrive as early as September. A leading trial is proving effective in early testing.
- A vaccine is the key to “restoring the economy” according to a leading expert.
Coronavirus vaccine trials are already proving effective, according to the leading project in Oxford, U.K. The news is sending Wall Street into a buying frenzy on Tuesday with the Dow Jones Industrial Average (DJIA) pushing more than 300 points higher.
A vaccine could now be ready in a million doses as early as September. Previous timelines put a vaccine at 12-18 months of development. Former FDA Commissioner Scott Gottlieb said this would be a game-changer for the economy.
The first country to have a vaccine and be able to mass inoculate the population is first to restore their economy as well… It really is a wake up call hopefully to policymakers to say this is really important.
If a vaccine can be developed by September, it means America could safely re-open. More importantly, it might stave off a second wave of infections. A second wave is perhaps the stock market’s biggest fear right now.
Dow Jones shoots higher
The stock market looks set to extend yesterday’s gains, with the Dow Jones securing a 301.85 point (1.25%) jump that lifted the index to 24,435.63.
The S&P 500 and Nasdaq were up 1.24% and 0.84%, respectively.
Coronavirus vaccine appears to work in monkeys
The leading Oxford vaccine trial has already proven hopeful in early animal trials. The team tested their vaccine on six rhesus macaque monkeys – the closest in genetic makeup to humans.
In all six cases, the monkeys responded positively after 28 days. Previously, the monkeys had succumbed to the coronavirus when exposed.
The team launched its human trial last week, with a view to testing 6,000 volunteers in the next month. That puts it lightyears ahead of other trials around the globe. The Oxford group has a head start after working on a different coronavirus vaccine last year.
If the trial is effective in the human study, and they get regulatory approval, they expect to deliver one million doses in September.
Race for the coronavirus vaccine
There are now more than 70 ongoing trials racing to beat the virus. Bill Gates has diverted all his resources into finding a therapy. The Bill and Melinda Gates Foundation has temporarily shifted focus away from HIV, Malaria, and Polio to battle the Covid-19 outbreak.
Elsewhere, new trials are set to begin in Perth, Australia this week. China just approved a third vaccine candidate trial after a first phase of testing produced good results. In the U.S., a trial is set to kick off in Cincinnati.
With a global race to find a vaccine, we could see timelines fast-tracked significantly. High-risk groups and healthcare workers would likely be first in line for the vaccine. The Coalition for Epidemic Preparedness Innovations, which is funding a variety of trials, said they could:
Perhaps deliver vaccines even faster than the 12 to 18 months we were discussing.
Dow Jones needs a vaccine to pump higher
News of a fast-tracked vaccine timeline will bring hope to investors. Analysts say the recent stock market rally is beginning to look exhausted and new catalysts will be required to push it higher.
As Gottlieb explained, a vaccine is the key to safely restoring the economy. It will give the population confidence to return to work and begin consuming again.
The way to bring the consumer back … is to give them confidence that there isn’t pervasive spread of this disease.
While many states are already re-opening, that isn’t enough to restore the economy. 80% of workers say they wouldn’t feel safe going back to work even if their state re-opened. In New York, less than 15% feel safe to go back into the work place.
In other words, only a vaccine or viable therapy can get the economy pumping again. Which means we’re unlikely to revisit stock market highs until a vaccine hits the market.
What to watch on the stock market today
Corporate earnings reports continue to steamroller Wall Street today. In the European session, HSBC reported a dramatic plunge in profit. Europe’s largest bank by assets set aside millions to brace for a tsunami of loan defaults in the coming months.
BP earnings fell by two-thirds following a disastrous month which saw U.S. crude oil plunge below zero. Looking ahead to the U.S., we’ll get updates from Caterpillar, Ford, Starbucks, and Pfizer.
Elsewhere, the Federal Reserve Open Committee meeting begins today. The Fed isn’t expected to change rates after moving to zero in March. But all eyes are on chairman Jerome Powell’s forecast for the coming months.