Potential COVID-19 vaccine helps stock market

COVID-19 vaccine
COVID-19 vaccine(Associated Press)
Published: Jul. 15, 2020 at 4:59 PM CDT
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BISMARCK, N.D. (KFYR) - Spikes of new positive coronavirus cases around the nation are causing some states to postpone or roll back reopening plans. However, a phase-one study of a COVID-19 vaccine is giving people hope and helping the U.S. market.

The stock market closed in the green Wednesday. Financial experts say this is due, in part, to a positive outlook from the biotechnology company “Moderna.” Moderna’s experimental COVID-19 vaccine is one of the first to move into human trials. The hope that’s generated has made its way into the market.

Tuesday’s market opened lower than Monday-- painting a bleak picture compared to Wednesday’s opening surge.

The time in between was filled with news from the New England Journal of Medicine, where the results of a new COVID vaccine were said to have triggered an immune response in all volunteers who received it.

“It’s giving everybody optimism. When you have hope that we’re going to find a solution to this COVID problem, that translates into the market pushing up, because people feel better about the longterm prospects of this,” said David Wald with Secuiran Financial Advisors.

The Journal reports the 45 volunteers had only mild side effects, including fatigue, chills, and muscle pain. The next step for the vaccine is the “phase-three” trial, which gets underway later this month. After that, regulators will decide whether to approve it.

“It’s very, very encouraging results. There’s a lot of boxes that you have to check. And, I think this is an important box that Moderna checked in this vaccine,” said Dr. Elias Haddad, professor of medicine at the Division of Infectious Diseases & HIV Medicine at Drexel University College of Medicine.

Hope, causing industries hit hardest by the pandemic to make some gains in the market.

“For the cruise lines and the airlines, people are flying a fraction of what they should be flying during the summer months when people are usually traveling. So, these companies are seeing this have to run its natural course -- their profits won’t rebound for years. With the Moderna vaccine, they’re thinking that timetable will be accelerated and that gives everybody hope,” Wald said.

Moderna says it will be ready to deliver up to a billion doses a year, starting in 2021.

Questions on the vaccine’s durability are still unanswered, but the possibility of a cure is evident on Wall Street.

Due to the uncertainty of the vaccine, Wald says not to get wrapped up in the over-optimism of the upside. He says maintain good asset allocation and quality investments to help withstand market volatility.

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