What the market reaction to the Covid vaccine news tells us about the “new normal”

Stockmarkets are soaring on news that Pfizer’s Covid vaccine could be much more effective than expected. It’s not all unbridled joy, however, and safe haven assets in particular have taken a hit. John Stepek looks at what it all means.

Pfizer HQ
News from Pfizer has given the markets a shot in the arm
(Image credit: © KENA BETANCUR/AFP via Getty Images)

Markets have surged today. No, it’s not because Joe Biden won the US election, it’s because we’ve had news that a Covid-19 vaccine might be coming around the corner much sooner and much more effectively than most of us had thought. A vaccine developed by US drugs giant Pfizer and Germany’s BioNTech SE prevented more than 90% of symptomatic infections in a trial which involved “tens of thousands of volunteers”, reports Bloomberg.

Apparently, if the “data hold up and a key safety readout Pfizer expects in about a week also looks good” then we might be on the way to having a full-blown vaccine. Emergency authorisation could be granted by US regulators in the third week of November. Meanwhile the European Medicines Agency already has the vaccine in “rolling review”. If these results hold up, then it’s also good news on the effectiveness front – the initial vaccines were expected to only work on 60%-70% of individuals. So 90% is a lot better than anyone had hoped. There are a lot of caveats at this stage, as you’d expect. But the long and the short of it is this: there’s most definitely light at the end of the tunnel now, and for once it’s not an oncoming train.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.