Markets Are Already Pricing Successful Moderna Vaccine Shot
Markets Are Already Pricing a Successful Moderna Vaccine Shot
(Bloomberg) -- The stakes are high for the results of Moderna Inc.’s coming Covid-19 vaccine trial. But as far as investors are concerned, the impact may already be in the price of financial assets.
The bar was raised for markets to rally following an announcement by Pfizer Inc. that its vaccine protected 90% of Covid-19 cases in a study, investors and strategists said. Moderna’s version, which uses similar experimental messenger RNA technology, is due to report results imminently.
The success of Pfizer’s trial has “some spillover” to Moderna because of its technological similarities, said Feifei Li, head of equities at Research Affiliates LLC. “It tells you the likelihood of the Moderna trial being successful is very high,” she said. “But it should be priced in already.”
Global investors are weighing whether another jolt could come to markets from more vaccine news after a melt-up in equities this week followed the news from Pfizer and German partner BioNTech SE. Stocks that had been laggards jumped and recent winners retreated, in the strongest reversal of momentum over value since 1996, at least by one measure.
The NYSE FANG+ Index, which tracks a basket of U.S. tech and consumer stocks, fell as much as 7% on Monday and Tuesday, its biggest two-day decline since market turbulence erupted at the start of September.
Moderna shares were up 1.1% at 9:59 a.m. in New York, headed for a gain of more than 22% this week.
Li expects the value-growth reversal to emerge again when one of the vaccine candidates under development is ultimately approved for use.
Even though there’s a long road ahead to widespread adoption of a vaccine, a successful Moderna trial would help cement the rotation into value stocks, small caps and cyclicals, said Solomon Tadesse, head of North American equity quant research at Societe Generale.
“If Moderna’s trial is as good as Pfizer’s, it provides a confirmation of the current belief that there is a clearer path to the end of the health crisis,” he said in an email.
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