An Economic Recovery in the Waiting. COVID-19 Vaccination Rates Suggest a Longer Wait for Some

Economic Recovery

Following the 2nd quarter economic meltdown of 2020, major economies rebounded in the 3rd quarter.

A reopening of borders and businesses spurred the recovery. Many hoped that the worst of the COVID-19 pandemic had passed.

Going through the 4th quarter, however, conditions deteriorated rapidly once more.

The number of COVID-19 cases soared across the U.S, Europe, and beyond.

Amidst the doom and gloom, the Chinese economy provided a glimmer of hope.

Last week, 4th quarter GDP numbers impressed. While a spike in new COVID-19 cases in China muted the impact of the stats on riskier assets but the recovery was plane to see.

Other economies, have been less fortunate.

Those most at risk of an extended period of contraction are economies most dependent upon consumption and tourism.

For now, the global financial markets appear to be signaling a more uniform global economic recovery through 2021.

The latest COVID-19 numbers, vaccination rates, and containment measures paint a different picture, however.

The Economic Calendar

Next week, 4th quarter GDP figures are due out of the U.S, Germany, and France to name but a few.

Looking at the forecasts, the U.S economy is projected to grow by 4.4% in the 4th quarter.

It’s a different story for France and Germany, however.

Extended lockdown periods through late 2020 will likely lead to another sizeable quarterly contraction.

Economists have forecasted the French economy to contract by 3.2% and Germany’s by 4.6%.

Relative to the 2nd quarter of 2020, the contractions are relatively mild. By historical standards, however, these are quite dire forecasts.

Vaccinations Rates

According to the Bloomberg Vaccination Tracker, the U.S vaccination rate was 5.23 doses per 100 people as at 20th January.

With President Biden’s aim of 100 million vaccinations in 100 days, this is expected to accelerate in the coming weeks. The numbers have already picked up from quite dire levels just last week. As at 10th January, the U.S had had a vaccination rate of just 2.44 doses per 100 people.

While other countries face supply issues, this has not been the case for the U.S. To put it into perspective, 48% of shots distributed to states in the U.S have been administered. In numeric terms, 17.18 million doses have been administered.

Much will now depend on whether the U.S President meets his 100 million target or needs to reintroduce lockdown measures.

At the time of writing, the total number of COVID-19 cases in the U.S sits at 24,998,975, with the total number of deaths hitting 415,894.

Any acceleration in new cases and the U.S government may have little choice but to contain the spread. With labor market conditions still in dire straits, this would have painful consequences for the U.S economy.

The only goods news is that the Democrats now control both houses. Delivering fiscal support should be easier. Bringing unemployment back to pre-pandemic levels, however, is likely to be a far more difficult task.

Elsewhere, a number of governments have made strong progress in driving vaccinations. This bodes well for more rapid economic recoveries. These nations are few and far between, however.

Israel continues to lead the charge, with a vaccination rate of 32.56 doses per 100 as at 20th January. The U.A.E remains ranked 2 in terms of vaccination rates. (20.11 doses per 100 as at 19th Jan).

As at the 20th January, the UK is also at the top end of the table, with a vaccination rate of 7.59 doses per 100.

The EU

For the EU, however, the slow authorization of COVID-19 vaccines and apparent bad planning has been reflected in the figures.

EU wide, the vaccination rate stood at just 1.51 doses per 100 people as at 20th January. When considering the fact that the total number of COVID-19 cases is more than 10 million, this remains a concern.

Not only are we likely to see economic divergence globally but also within the EU.

Germany’s vaccination rate stood at 1.56 doses per 100 as at 20th January. By contrast, France’s vaccination rate was just 1.07.

Italy and Spain were amongst leading EU member states with rates of 2.07 and 2.21 doses per 100. These rates are also on the lower end for developed nations, however.

For a full breakdown of vaccination rates by country, please visit Bloomberg Vaccination Tracker page here.

Supply and Demand

Since the approval of vaccines in the U.S, Europe, and beyond, supply has become a focal point.

Back in December, we had highlighted supply as a key consideration as governments procure vaccines.

Some governments have been able to secure enough vaccines to inoculate 100% of their populations.

Others will barely touch the surface and will have to wait.

When considering the vaccination rates today and the need for 2 doses, it could be a long wait.

Some governments will undoubtedly be wanting to avoid going into another winter once this winter season passes.

Until there are more vaccine options and greater supply, however, this remains a credible risk for some.

As things stand, therefore, we continue to see Johnson & Johnson and AstraZeneca as two key players in the fight against the global pandemic.

Johnson & Johnson is key due to its goal to deliver a single dose vaccine. AstraZeneca remains key due to is affordable and easy to transport vaccine, not to mention manufacturing capabilities.

Government agencies including the EMA will need to authorize the use of these vaccines more hastily to support a speedier economic recovery.

The markets can then begin to look to developing economies that have continued to struggle since the beginning of the pandemic. Failure of the likes of Europe to catch up with the U.S and even the UK, could lead to an economic decoupling.

The Latest COVID-19 Numbers

At the time of writing, there were a total of 97,384,877 confirmed COVID-19 cases and 2,085,507 related deaths.

By geography, the U.S had reported 24,998,975 cases and 415,894 COVID-19 related deaths.

India reporting 10,611,719 cases, with Brazil reporting 8,639,868 cases.

Sitting behind Russia (3,655,839) remained the UK (3,505,754).

France (2,965,117), Italy (2,414,166), Spain (2,412,318), and Germany (2,090,161) reported a combined 9,881,762 cases.

Looking Ahead

Existing vaccine providers are going to need to materially increase supply in order to support the bullish outlook towards the economic recovery.

Market sensitivity to reports of any supply constraints will likely build in the current quarter. Failure to ramp up vaccination rates coupled with supply constraints would have an even more material impact on risk sentiment. All of this is before considering a continued rise in new cases and further extensions to lockdown measures.

For now, the pressure will be on the likes of AstraZeneca and Johnson & Johnson to deliver.

A marked increase in supply from Pfizer Inc. and Moderna Inc. would also be welcome.

At some point, however, the focus may well shift to how well or how badly governments have performed.

COVID-19 Vaccine Update – Some EU Member States Break Ranks

EU Vaccine News

Following the EMA’s decision to bring forward the review of the AstraZeneca vaccine, EU member states are looking to get ahead in placing orders.

Over the weekend, news hit the wires that the Irish government was in talks to secure delivery of the yet to be authorized vaccine.

Pfizer Inc. supply issues experienced across member states has resulted in bid to secure supply from elsewhere.

Ireland expects to receive more than 3 million doses of the AstraZeneca vaccine. By receiving the vaccine ahead of the EMA recommendation and EU Commission authorization, it would mean that the vaccine could be administered immediately upon authorization.

Last week, the EMA had indicated that upon recommendation, the vaccine would be widely available by mid-February.

Ireland would therefore be around 2-weeks ahead of other EU member states. More importantly, Ireland may also avoid jostling with other EU member states for supply.

Having seen Britain go it alone on the vaccine front and approve the AstraZeneca vaccine late last year, Britain’s vaccination rates are well ahead of any of those seen across the EU.

Vaccinations

According to the Bloomberg Vaccination Tracker, Ireland’s vaccination rate stood at 1.90 doses per 100 people as at 13th January.

While well short of the likes of the Israel, the U.A.E and even the UK and the U.S, its well ahead of many other EU member states.

To put it into perspective, the EU has a vaccination rat of 1.41 doses per 100 people as at 19th January.

Italy and Spain had rates of 2.01 and 2.08 doses per 100 as at 19th January.

By contrast, however, France had a vaccination rate of just 0.90 doses per 100. The numbers from the Netherlands were even more alarming. As at 19th January, the Netherlands had a vaccination rate of just 0.45 doses per 100 people.

With the broad spread of rates, it is not wholly surprising that some EU member states are looking to jump the gun in securing vaccine supply.

Ireland is certainly not amongst the worst affected by the COVID-19 pandemic.

At the time of writing, Ireland had a total of 176,839 total COVID-19 cases and 2,708 related deaths.

While well below the numbers reported from the likes of France, Germany, Italy, and Spain, there is some urgency globally to secure more vaccines.

New strains of the coronavirus have proved significantly more virulent and as a result could have a significant impact on economic conditions.

Germany has already announced an extension to its lockdown. Merkel also talked of a possible need to shut down borders in order to protect the country from new strains.

Without an adequate vaccine supply and vaccination drive, the impact of the new strains could be devastating.

COVID-19 numbers from the UK had certainly sent a warning to neighboring countries over the holidays.

Global Numbers

Leading the charge geographically, by vaccination rate, continues to be Israel.

As at 19th January, Israel had a reported vaccination rate of 29.78 doses per 100, up from 25.91 as at 17th January.

The U.A.E continued to trail Israel in 2nd place, with a rate of 19.21 doses per 100.

Sitting behind Bahrain in 3rd was the UK, with a vaccination rate of 7.07 doses per 100. This was up from 6.45 doses per 100 as at 17th January.

Looking at the numbers, A marked increase in vaccination rates is going to be needed to support a speedier economic recovery.

Further extensions to existing lockdown periods could begin to hit the prospects of a 2nd quarter recovery.

While we see economic divergence globally, stemming from marked differences in vaccination rates, the same is likely within the EU.

For the Eurozone economic outlook, France, Germany, Italy, Spain, and the Netherlands will need to materially ramp up vaccinations.

It will be interesting to see whether the issue is raised during the ECB press conference tomorrow. How does the ECB see growth when considering the divergence in vaccination rates across member states?

For a full breakdown of vaccination rates by country, please visit Bloomberg Vaccination Tracker page here.

The Latest COVID-19 Numbers

At the time of writing, there were a total of 96,625,755 confirmed COVID-19 cases and 2,065,698 related deaths.

By geography, the U.S had reported 24,806,964 cases and 411,486 COVID-19 related deaths.

India reporting 10,596,442 cases, with Brazil reporting 8,575,742 cases.

Sitting behind Russia (3,612,800) remained the UK (3,466,849).

France (2,938,333), Italy (2,400,598), Spain (2,370,742), and Germany (2,071,473) reported a combined 9,781,146 cases.

Looking Ahead

The AstraZeneca vaccine remains the key to bringing the pandemic under control near-term. This is largely due to an expected abundance of supply.

When considering the current vaccination rates, however, there is one other factor to consider.

Pfizer Inc., Moderna Inc., and AstraZeneca’s vaccines are 2-dose vaccines. This means that another round of vaccines is going to be needed for effective protection against the virus.

When considering current vaccination rates, some of the more adversely affected nations may not be anywhere 50% vaccinated before the 2nd quarter.

This is yet another factor for the markets to consider in terms of any economic recovery.

The availability of a single dose vaccine may not be far off, with Johnson & Johnson set to release data imminently. In all reality, however, supply constraints could limit the availability of a single dose vaccine beyond U.S borders.

Johnson & Johnson Numbers

Johnson & Johnson had previously projected to deliver 12 million doses by the end of February and 100 million doses by the end of June.

According to recent reports, however, Johnson & Johnson may a number of months behind.

That suggests that 1 billion doses by the end of 2021 may also be an ambitious target.

Pfizer Inc., Moderna Inc., AstraZeneca, Sputnik V, and China’s two vaccines will be key near-term. Ultimately, however, it will likely be a single dose vaccine that brings an end to the COVID-19 pandemic.

Availability across the globe is going to be needed, however, for the pandemic to truly come to an end.

As we have seen in the early days of the COVID-19 vaccines, richer nations have cornered much of the vaccine supply.

This will also need to change for the number of new cases across the globe to begin falling.

COVID-19 Vaccine Update – Brazil and India Look to Ramp up Vaccinations

Vaccinations

According to the Bloomberg Vaccination Tracker, more than 42,2m vaccines have been administered as at 17th January.

This figure is likely to be higher, with numbers from China, a number of EU member states, and other parts of the world yet to be updated.

By doses administered, the U.S leads the way, having administered 14.31m doses, as at 17th January.

As at 13th January, China had administered 10 million doses as the government looks to prevent another wave of the pandemic.

While the EU sits behind China, with 5.27m doses administered, the UK ranks 4th, with 4.31m doses administered.

Vaccination Rates

When looking at vaccination rates, however, it is a different story.

China had a vaccination rate of just 0.71 per 100 people, with the EU having a vaccination rate of 1.19 per 100.

It was slightly better for the U.S after the weekend, with the vaccination rate rising to 4.36 per 100.

This number remains particularly low, however, when considering the continued rise in new cases and related deaths. For incoming president Joe Biden, the bigger concern, however, will be the fact that only 46% of doses distributed have been administered.

Biden has pledged the vaccination of 100 million in 100 days. A greater vaccination drive is going to be need to, not only meet the pledge, but to bring the pandemic under control.

New strains of the virus have contributed to the pickup in infection rates.

The good news is, however, that the vaccination rate is well above 2.44 doses per 100 as at 12th January.

Global Numbers

Leading the charge geographically, by vaccination rate, continues to be Israel.

As at 17th January, Israel had reported a vaccination rate of 25.91 per 100 people.

The U.A.E was narrowing the gap, with the vaccination rate climbing from 15.50 to 17.52 per 100 as at 17th January.

From the UK, the government’s vaccination drive was reflected in the latest figures. As at 17th January, the vaccination rate stood at 6.45 doses per 100 people. This was up from 5.51 doses per 100 as at 15th January.

By contrast, the EU continued to fall well behind the U.S and the UK.

As at 17th January, the EU had a vaccination rate of 1.19 per 100.

Amongst the 4 worst affected member states, Italy continued to lead the way with a vaccination rate of 1.90 doses per 100 as at 17th January. This was up from 1.66 as at 15th January.

17th January figures for Spain, Germany, and France were not yet available.

France continued to disappoint, however, with a vaccination rate of just 0.65 per 100 as at 16th January.

The latest figures from Germany and Spain were somewhat better.

As at 16th January, Germany had a vaccination rate of 1.26 per 100, with Spain a vaccination rate of 1.65 as at 15th January.

When considering the ongoing lockdown measures and continued rise in new cases, however, more is going to be needed.

For a full breakdown of vaccination rates by country, please visit Bloomberg Vaccination Tracker page here.

The Latest COVID-19 Numbers

At the time of writing, there were a total of 95,480,678 confirmed COVID-19 cases and 2,039,607 related deaths.

By geography, the U.S had reported 24,482,050 cases and 407,202 COVID-19 related deaths.

India reporting 10,572,672 cases, with Brazil reporting 8,488,099 cases.

Sitting behind Russia (3,568,209) remained the UK (3,395,959).

France (2,910,989), Italy (2,381,277), Spain (2,252,164), and Germany (2,050,099) reported a combined 9,594,529 cases.

Looking Ahead

This morning, we saw 4th quarter GDP numbers from China fail to support demand for riskier assets. In spite of upbeat numbers, a recent pickup in new COVID-19 cases in China muted the effect of the numbers.

This was in spite of the ongoing vaccination drive across the country.

With vaccination rates at the lower end for China and other major economies, the continued rise in new COVID-19 cases is likely to slow any economic recovery.

Fiscal and monetary policy support may be in place but without an easing of lockdown measures, consumption will likely continue to wane.

Last week, December retail sales figures from the U.S fell further. This was in spite of the government holding off reintroducing a nationwide lockdown.

As governments look to ramp up vaccination rates, vaccine supply will soon become a focal point.

For the EU, in particular, approval of the AstraZeneca vaccine is likely to be key. At the time of writing, however, the EMA is not due to review the vaccine until 29th January.

This means that the EU would likely continue to see a reduced supply of COVID-19 vaccines until mid to late February.

Extended lockdown measures across France, Germany, and Italy in particular would also question the ECB’s growth forecast for 2021…

India and Brazil

For Brazil, which has seen a spike in new COVID-19 cases as a result of new strains, Anvisa approved both the AstraZeneca and Sinovac vaccines.

Two medical centers in the country are reportedly set to manufacture the vaccines to meet national demand.

India, which ranks ahead of Brazil in terms of total COVID-19 cases, is also on a vaccination drive. The government reportedly delivered millions of doses of approved vaccines across the country in just a matter of days.

Alongside Brazil, India is using the AstraZeneca vaccine. In addition, India is also administering its very own Covaxin vaccine.

As at 17th January, India had a vaccination rate of just 0.02 per 100. At the time of writing, there were no figures available from Brazil.

COVID-19 Vaccine Update – Vaccination Rates and COVID-19 numbers

Vaccination Rates

As at 15th January 2021, the U.S had administered the largest number of doses worldwide, totaling 12,962,550.

While leading by doses administered, vaccinations per 100 remained particularly low at 3.95 doses. This was up from just 2.44 doses per 100 people as at 12th January, however.

Leading the charge by vaccination rate continued to be Israel with a rate of 24.24 per 100 people as at 15th January.

The U.A.E remained in 2nd place, with a vaccination rate of 15.50 doses per 100 people.

While Bahrain ranked 3rd, with a rate of 8.28 doses per 100, the figures from the UK were also impressive.

As at 15th January, the UK had recorded a vaccination rate of 5.51 doses per 100 people.

Totaling 3,678,180 vaccines, the rate was up from 2.99 doses per 100 as at 12th January. The figures reflected the British Government’s vaccination drive in a bid to bring the pandemic under control.

For the EU, the numbers were marginally better but certainly not at levels needed to ease lockdown measures.

Amongst the 4 worst affected member states, Italy continued to lead the way with a vaccination rate of 1.66 doses per 100.

Spain and Germany were aligned with rates of 1.66 and 1.65 per 100. France, however, continued to trail, with a vaccination rate of just 0.60 doses per 100 people.

For a full breakdown of vaccination rates by country, please visit Bloomberg Vaccination Tracker page here.

The Latest COVID-19 Numbers

At the time of writing, there were a total of 94,324,566 confirmed COVID-19 cases and 2,108,103 related deaths.

By geography, the U.S had reported 24,102,429 cases and 401,856 COVID-19 related deaths.

India reported 10,543,659 cases, with Brazil reporting 8,394,253 cases.

Sitting behind Russia (3,520,531) remained the UK (3,316,019).

France (2,872,941), Italy (2,352,423), Spain (2,252,164), and Germany (2,023,802) reported a combined 9,501,330 cases.

Looking Ahead

With new COVID-19 cases continuing to rise, COVID-19 vaccine supply and vaccination rates will remain key areas of focus near-term.

New variants of the coronavirus are being identified across the globe, with each more virulent than the original strain.

The new strains have added further pressure on governments to take more aggressive steps to combat the pandemic.

Supply remains a constraint for many countries, however, which could lead to extended lockdown measures.

For the EU that trails the UK and the U.S, approval of the AstraZeneca vaccine would ease the strain.

Last week, news hit the wires that AstraZeneca had submitted a request to the EMA for conditional marketing authorization.

According to the EMA website, an opinion could be issued by 29th January during the meeting of the EMA’s scientific committee for human medicines (“CHMP”).

The EMA has caveated, however, that data submitted on the quality, safety, and efficacy of the vaccine must be sufficiently robust and complete.

Upon a CHMP recommendation, the European Commission would then fast track its decision-making process. The time lines suggest that the AstraZeneca vaccine would be available for use across the EU by mid-February.

With Pfizer Inc. supply to the EU reportedly coming up short of expectations, AstraZeneca will need to make up the shortfall.

The EU has a contract with AstraZeneca to purchase up to 400 million doses of its vaccine.

COVID-19 Vaccine Update – China’s Sinovac Comes under Scrutiny

Sinovac

This week, clinical trials of China’s Sinovac vaccine delivered particularly disappointing results.

In Brazil, late-stage clinical trial results showed that Sinovac had an efficacy rate of 50.4%. Sinovac had announced previously announced an efficacy rate of 78%.

The sizeable difference between the two sets of results has raised questions over China’s data.

While the efficacy rate sits just above the WHO’s 50.0% threshold, there will likely be the need for a more detailed review for the vaccine to be accepted.

A large number of countries are reliant upon the Sinovac vaccine, having failed to make timely orders of the more effective vaccines available at present.

Brazil, is among countries that have placed orders with Sinovac.

With a larger percentage of healthcare workers in the U.S refusing to take the Pfizer Inc. vaccine, governments may face a harder task convincing its populations to take the Sinovac vaccine.

Such differences in results could raise concerns over vaccine safety, in particular.

The Latest COVID-19 Numbers

At the time of writing, there were a total of 92,767,845 confirmed COVID-19 cases and 1,986,696 related deaths.

By geography, the U.S had reported 23,616,345 cases, with India reporting 10,512,831 cases.

Brazil reported the 3rd highest, with 8,257,459 cases, followed by Russia (3,471,053) and the UK (3,211,576).

France (2,830,442), Italy (2,319,036), Spain (2,176,089), and Germany (1,980,861) reported a combined 9,306,428 cases.

Looking Ahead

As a result of Brazil’s clinical trial results, we can expect Pfizer Inc., Moderna Inc., and AstraZeneca to come under pressure to deliver more doses worldwide.

On Wednesday, Johnson & Johnson provided some positive news to ease the strain, however.

As clinical trials continue, the firm’s chief scientist provided a positive view of the single dose vaccine.

The company’s chief science officer also announced that the single shot vaccine remains on target for rollout in the 1st quarter. Clinical trial data is due out later this month or in early February.

Johnson & Johnson has set a goal of 1 billion doses of the vaccine to be manufactured this year. There were reports, however, that Johnson & Johnson has experience manufacturing delays that would impact the 2021 target.

With China’s numbers now in question, Russia’s Sputnik V vaccine may also begin to draw greater interest.

COVID-19 Vaccine Update – Vaccination Rates and the Road Ahead

U.S Vaccination Rates

Sentiment towards the available COVID-19 vaccines has been mixed across the U.S.

Over the weekend there were reports of frontline healthcare workers refusing the vaccine. The numbers refusing are far from small, with some reports indicating that as many as 80% are refusing the vaccine in some centers.

The refusal to receive the vaccine comes as the U.S continues to fight an uphill battle against the COVID-19 pandemic.

According to Bloomberg, the U.S has administered 8.02m doses of the vaccine since 14th December. To-date. at least 272,429 recipients have completed the 2-dose regimen.

In all reality, however, the number of vaccinations is low relative to the number of distributed shots.

At the time of writing, Bloomberg reported that 36% of the shots distributed to states have been administered.

Having achieved the target distribution of 20 million doses by the early part of this month, the next goal must be to ramp up the vaccination rate.

At the time of writing, Nevada had the lowest vaccination rate at 23.8%, with Connecticut the highest at 71.8%.

Looking at a number of the more adversely affected states, the number of vaccinations administered are just not enough.

California and Florida had reported vaccination rates of just 31.7% and 44.0%, with New York at 45.9%.

For a full state-by-state breakdown of vaccination rates, please click here.

Concerns over the speed of availability of the vaccine has led to skepticism and an unwillingness to vaccinate in the U.S.

This is in spite of the continued spike in new COVID-19 cases across the U.S.

Global Vaccination Rates

On a global basis, Bloomberg has reported that a total of 25,839,924 vaccines have been administered as at 10th January.

Per 100 people, the U.S has vaccinated 2.44 doses per 100 people.

Elsewhere, the numbers do vary significantly.

Across the EU, number of vaccines administered are particularly disappointing when considering the reintroduction of lockdown measures.

France has reportedly administered just 93,000 doses, which translates to 0.14 per 100 people.

Germany and Spain have done marginally better, with 0.64 and 0.60 vaccine doses administered per 100.

Leading the 4-most adversely affected, however, is Italy, with 1.04 doses administered per 100 people.

Looking at the UK, 2,000,000 doses have been administered, which is equivalent to 2.99 doses per 100 people.

From the weekend, news hit the wires that the UK government plans to open mass vaccination centers in England to ramp up the daily vaccination rate.

This does bode well for Britain and its fight against the COVID-19 pandemic.

Looking further east, Israel leads the charge, by doses per 100 people, in the fight against the pandemic. As at 10th January, Israel had administered 20.08 doses per 100 people, translating to 1,817,000 doses.

The U.A.E came a distant 2nd, with 10.11 doses per 100 people.

Bahrain was also a front runner, with 6.01 doses administered per 100 people, though the population size is significant smaller.

Figures were not available for Brazil and India that sit behind the U.S as the worst hit by the COVID-19 pandemic.

The Economic Recovery

In terms of nations bringing an end to the COVID-19 pandemic, once vaccination rates exceed infection rates, we can expect economies to begin reopening.

Looking at the global numbers, we continue to expect marked divergence in economic recoveries.

Vaccination rates across some advanced economies remain significantly low, suggesting longer than expected containment measures.

The longer that governments need to maintain containment measures, the greater the economic fallout.

This suggests that EU member states may well lag the U.S, the UK, and parts of the Middle East.

We will need more figures, however, to get a fuller picture. From Asia, China’s low vaccination rate of just 0.64 per 100 people, as at 8th January, has not impeded the economic recovery.

China is an anomaly, however, with the government having managed to curb COVID-19 infection rates.

This is not the same story for the U.S, the UK, the EU, and other parts of the world.

We would therefore need to see a marked increase in vaccination rates across the the U.S and the EU at a minimum to support a sharper global economic recovery.

The Latest COVID-19 Numbers

At the time of writing, there were a total of 90,693,444 confirmed COVID-19 cases and 1,943,171 related deaths.

By geography, the U.S had reported 22,917,334 cases, with India reporting 10,467,431 cases.

Over the weekend, the U.S hit another record high number of new cases. On Saturday, the U.S had reported 278,920 new cases, which sits well above the national daily vaccination rate.

Brazil reported the 3rd highest, with 8,105,790 cases, followed by Russia (3,401,954) and the UK (3,072,349).

France (2,783,256), Italy (2,276,491), Spain (2,050,360), and Germany (1,929,353) reported a combined 9,039,460 cases.

Looking Ahead

As governments look to ramp up vaccination rates, availability of doses will become a factor.

At present, the UK is one of few nations that has access to AstraZeneca, BioNTech/Pfizer Inc. and Moderna Inc.’s vaccines.

For the EU, approval of the AstraZeneca vaccine may be pivotal in its fight against the COVID-19 vaccine.

Other parts of the world have begun to accept China’s COVID-19 vaccines, while waiting on delivery AstraZeneca, BioNTech/Pfizer Inc., and Moderna Inc.

Some governments were too slow in placing orders, resulting in lengthy lead times.

The number of doses that China’s two vaccine producers will be able to manufacture are low, however.

Sinovac will reportedly be able to produce just 300 million doses per year. Sinopharm, by contrast, is looking to produce more than 1 billion doses this year.

With the Chinese government having pledged to support Africa and LatAm, more is needed, however.

It, therefore, becomes all the more essential that a 1 dose vaccine is made available. This would ease manufacturing capacity pressures and materially increase the number of people protected from the coronavirus.

Johnson & Johnson

As things stand, Johnson & Johnson remains the front runner in delivering a much-needed single dose vaccine.

According to recent reports, the vaccine could be available as early as next month.

Safety, efficacy, and production capacity will be key considerations along with cost. For nations lagging behind in the fight against the pandemic, a single dose vaccine would certainly ease the pain.

COVID-19 Vaccine Update – EMA Recommends Moderna Inc. Vaccine.

The Latest

Following the authorization for the BioNTech/Pfizer Inc. vaccine authorization late last year, the EMA was back in action this week.

Today, the EMA’s human medicines Committee (“CHMP”) recommended the COVID-19 Moderna Inc. vaccine for authorization.

According to the EMA, the CHMP thoroughly assessed the data on the quality, safety, and the efficacy of the vaccine.

The EMA recommended by consensus a formal conditional marketing authorization be granted by the EU Commission.

Emer Cooke, the Executive Director of the EMA, stated that the vaccine provides the EU with another tool to overcome the current emergency.

The EMA also noted:

  • A very large clinical trial showed that the COVID-19 Vaccine Moderna was effective at preventing COVID-19 in people from 18 years of age.
  • Efficacy was calculated in around 28,000 people from 18 to 94 years of age. All had no sign of previous infection.
  • The trial showed a 94.1% reduction in the number of symptomatic COVID-19 cases in the people who received the vaccine.
  • Additionally, the trial also showed 90.9% efficacy in participants at risk of severe COVID-19.
  • Healthcare providers must give two injections of the COVID-19 Vaccine Moderna, 28 days apart.

As a result of the recommendation, the EU Commission will now fast-track the approval process.

Once the EU Commission has granted conditional marketing authorization for the vaccine, Moderna Inc. can begin to distribute the vaccine across the region.

Vaccine Orders

Late last year, the EU had ordered an additional 80m doses of the Moderna Inc. vaccine. The latest order was in addition to 80m doses that had been previously ordered.

While the distribution of the Moderna Inc. vaccine likely to commence in a matter of days, the EMA has yet to review the AstraZeneca vaccine.

According to the latest reports, the EMA is awaiting additional data in order to being the review process.

Speed of distribution of the vaccine and vaccination rates will now be key in the fight against the pandemic.

COVID-19 Vaccine Update – U.S Vaccination Rates Should be of Concern

The Latest

Late last year, the global equity markets found further upside, supported by the rollout of multiple vaccinations.

Unprecedented progress by global pharmas towards COVID-19 vaccines has given governments a choice of 5 vaccines to date.

A 6th vaccine is expected shortly, with Johnson & Johnson expected to be the next pharma to deliver a vaccine.

While the availability of multiple vaccines is certainly a positive, availability of vaccines and vaccination rates remain key to bringing an end to the COVID-19 pandemic.

This week, the U.S government published the best and worst vaccination rates across U.S hospitals.

When considering the impact of the COVID-19 pandemic on the U.S economy and beyond, low vaccination rates should be of some concern.

While the U.S government has enforced containment measures, there has been no enforcement on vaccinations.

To make matters worse, limited supply of COVID-19 vaccines have added to a slow rate of inoculation across the country.

According to the U.S government, the number of vaccines administered have fallen well short of the 20 million that the Trump administration had projected before the end of 2020.

Supply and demand have both contributed to the lower rate of vaccinations across the country.

All of this ultimately means that the vaccination of phase 1 groups a, b and c will take far longer than initially predicted.

The Latest COVID-19 Numbers

At the time of writing, the total number of confirmed COVID-19 cases stood at 86,834.916, with the total number of related deaths rising to 1,875,520.

In the U.S, the total number of cases now stands at 21,578,606, with 356,620 related deaths.

The total number of cases in the U.S is double that of India’s 10,375,478, which is the 2nd most affected nation.

Across the 4 most adversely affected EU member states, the total number of cases stood at 8,658,967, with 230,551 related deaths.

The Outlook

An introduction of AstraZeneca’s vaccine to the U.S and a successful end to Johnson & Johnson’s clinical trials would ease supply issues.

This won’t address issues that governments face in terms of demand, however.

For those that don’t fall within priority groups, the bigger question is whether the slow rollout will further delay mass vaccinations.

With many nations now going through the winter months, vaccinations would need to be completed before next winter.

This gives governments as little as 9-months before seasonal changes kick and raise the prospects of another pickup in new cases.

From a market perspective, bringing an end to the COVID-19 pandemic before the summer would support a strong economic recovery.

A post-summer end, however, could result in a slower pace of recovery or even bring into doubt a recovery.

Looking at the U.S, U.S labor market conditions remain woeful. Failure to take control of Operation Warp Speed would weigh heavily on consumption.

At some point, therefore, we could see a greater influence of vaccination rates and supply on the global financial markets.

Daily vaccination rates and new daily COVID-19 cases will need to be monitored near-term. At a minimum, we will need to see an improving trend between daily vaccinations and new daily cases

No Enforcement at Federal Level

Across the U.S, more than 200,000 new COVID-19 cases are being reported each day. At the current rate of spread, the number of COVID-19 vaccines administered fall short of the number of new daily cases.

Less than 10% of the U.S population have caught the COVID-19 virus to date. The number of new cases would, therefore, likely continue to spike.

Such an eventuality would have a far more material impact on the U.S economy and labor market conditions.

It is, therefore, in the best interest of the U.S government to enforce vaccinations. Particularly in more adversely affected U.S states.

Until now, there has yet to be any talk of enforcement at federal or even state level…

COVID-19 Vaccine Update – The WHO Authorizes the Use of the Pfizer Inc. Vaccine

The Latest

Over the holidays, the World Health Organization approved the emergency use of the Comirnaty COVID-19 mRNA vaccine.

Having been the first vaccine to receive approval by the FDA, the BioNTech/Pfizer Inc. was also the first to receive WHO emergency validation.

The validation is significant as it now allows countries to accelerate approval processes to begin administering the vaccine.

As a result, UNICEF and the Pan-American Health Organization can also begin to procure the vaccine for distribution.

The WHO’s review of the vaccine found the vaccine to meet the WHO safety and efficacy standards.

Additionally, the WHO also requested that other vaccine developers come forward for validation.

COVID-19 cases continue to surge globally as countries struggle to contain the spread of the virus.

Adding to the urgency is the new strain from the UK that is considered more virulent.

While the validation is good news, the Comirnaty vaccine raises logistical and pricing issues. For many countries, the AstraZeneca vaccine will likely be a more viable option. More importantly, AstraZeneca has also engaged vaccine producers across the world to meet global demand.

The World Health Organization’s approval for emergency use of the AstraZeneca vaccine will therefore be a key step in combatting the virus.

Following the UK’s approval of the AstraZeneca vaccine last week, India reportedly approved the vaccine on Friday. Argentina has also approved the emergency use of the vaccine.

The Latest COVID-19 Numbers

At the time of writing, the total number of confirmed COVID-19 cases stood at 84,349,523.

In the U.S, the total number of cases has risen to 20,614,554, with the total number of related deaths rising to 356,401.

Behind the U.S, India has seen the total number of cases rise to 10,303,409, with Brazil reporting 7,700,578 cases in total.

For France, Germany, Italy, and Spain, the total number of cases stood at 8,461,804, with 224,611 related deaths.

Across the United Kingdom, the total number of cases stood at 2,542,065, with 74,125 related deaths.

Governments expect the numbers to rise following the holidays, however.

What’s next?

Other countries are expected to complete COVID-19 vaccine review processes in the coming weeks.

With France, Germany, Italy, and Spain reporting a combined 8,461,804 total number of cases, more than Brazil, the EMA approvals are key.

Following the EMA’s approval of the BioNTech/Pfizer Inc. vaccine last week, news hit the wires late in the week that the EMA needs more data from AstraZeneca.

In terms of production capacity, price, and logistics, there will certainly be pressure on EMA approval.

From Russia, Sputnik V is also in high demand, with Russia’s vaccine reportedly approved by Argentina. Russia is already delivering the vaccine to countries including Algeria, Bolivia, Guinea, and Serbia.

India and Brazil, however, are reportedly delaying the use of Sputnik V until the completion of more trials.

Concerns over the safety of the Sputnik V vaccine, however, has meant that the West remains reluctant to consider the vaccine.

China’s vaccine has also received a cold reception. Late last week China’s health authorities approved the Sinopharm COVID-19 vaccine for general use. While the West has yet to show interest in the Sinopharm vaccine, the nations within the Middle East have begun to use the Sinopharm vaccine.

In spite of skepticism, successful clinical trials of both China’s and Russia’s vaccines would give governments an ever-widening number of vaccines to choose from.

The good news is that Johnson & Johnson should also be delivering clinical trial data this month.  A 4th vaccine from the West, coupled with China and Russia’s vaccines, would deliver an even wide choice.

Johnson & Johnson currently remains the front runner to deliver the first single-dose vaccine.

COVID-19 Vaccine Update – Production now in Focus after the AstraZeneca Approval

The Latest

There has been plenty of vaccine news over the holidays as efforts continue to deliver more effective COVID-19 vaccines.

AstraZeneca and the University of Oxford vaccine received approval in the UK this week, which was key in the fight to end the COVID-19 pandemic.

The MHRA approved the 2-dose vaccine that will require a 2nd dose to be administered 4-12 weeks after the first dose.

It wasn’t long ago that AstraZeneca and the University of Oxford hit the news wires for all the wrong reasons.

With dosages now cleared up and the ability to store the AstraZeneca vaccine at fridge temperatures, mass vaccination is far simpler across the UK and beyond.

More importantly for the UK, there is also greater control on production and distribution, with the vaccine produced in the UK.

In addition to the Pfizer Inc. and Monero Inc. vaccines, the UK expects to receive an estimated 530,000 doses next week.

In the UK, a total of 616,933 people received the vaccine between 8th and 20th December. The government has ordered 40 million doses of the BioNTech/Pfizer Inc. vaccine and 100 million AstraZeneca doses.

Other vaccines that are also available including Russia’s Sputnik V, which is being considered across other geographies.

What’s next?

While AstraZeneca has received UK approval, receiving FDA and EMA approval from the U.S and the EU will be key.

Before the availability of the vaccine, AstraZeneca had promised not to make a profit from the vaccine. With low storage and transportation costs, each dose is estimated to be £3-£4. This is significantly lower than Pfizer Inc. and Moderna Inc.’s vaccines.

For this very reason, the AstraZeneca/University of Oxford vaccine makes up the lion’s share of the doses that COVAX has secured.

Production numbers and approvals will now be the next area of focus for the AstraZeneca vaccine.

Poorer nations will be reliant upon the AstraZeneca vaccine to end the spread of the virus.

For Johnson & Johnson, a one-dose vaccine could be in circulation by February, according to reports. As clinical trials continue, it will come down to the numbers and safety. The head of Operation Warp Speed delivered the optimistic view, while also stating that the AstraZeneca vaccine could receive FDA approval by April.

The Latest COVID-19 Numbers

At the time of writing, the total number of confirmed COVID-19 cases stood at 83,060,556. The total number of U.S cases has risen to 20,216,991, with the total number of related deaths rising to 350,778.

Behind the U.S, India saw the total number of cases rise to 10,267,283, with Brazil reporting 7,619,970 cases in total.

For France, Germany, Italy, and Spain, the total number of cases stood at 8,316,294, with 221,846 related deaths.

Across the United Kingdom, the total number of cases stood at 2,432,888, with 72,548 related deaths.

Stocks Advance As UK Approves Oxford-AstraZeneca COVID-19 Vaccine

Traders Cheer Vaccine News

UK granted approval to Oxford-AstraZeneca coronavirus vaccine as it tries to contain the spread of the new, more infectious strain of coronavirus which has emerged in Britain. On Tuesday, UK recorded 53,135 new COVID-19 cases so the current situation is very challenging.

The approval of the vaccine provided some support to global markets although it remains to be seen whether traders will be ready to make any major moves in the last two trading sessions of this year.

In the U.S., traders will continue to focus on the latest developments on the stimulus front. On Tuesday, Senate Majority Leader Mitch McConnell blocked the vote on stimulus checks and introduced a bill which combined bigger checks with several measures favored by Republicans. It remains to be seen whether this bill has any chances to succeed but traders continue to bet on additional economic support in early 2021.

Oil Moves Higher After Bullish Inventory Report

Oil managed to settle above the $48 level after API Crude Oil Stock Change report indicated that crude inventories decreased by 4.8 million barrels while analysts expected that they would decline by 2.1 million barrels.

This data will still have to be confirmed by the EIA Weekly Petroleum Status Report which will be published today. Traditionally, traders focus mostly on the EIA data so oil may find itself under pressure if this report disappoints.

At this point, oil looks ready to test the psychologically important $50 level in early 2021 despite the continued problems on the coronavirus front and OPEC+ decision to increase production by 500,000 barrels per day (bpd) in January, which is good for energy-related stocks.

U.S. Dollar Tests Yearly Lows

The risk appetite continues to grow, and traders sell the U.S. dollar in order to bet on riskier assets.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, is currently trying to settle below the yearly lows at 89.75.

This is a very important moment for many assets as the continuation of dollar’s downside move will signal that riskier assets are ready for another upside move. Dollar’s weakness should provide more support to stocks and dollar-denominated commodities.

For a look at all of today’s economic events, check out our economic calendar.

COVID-19 Vaccine Update – AstraZeneca/Oxford Uni Vaccine Approval Imminent

The Latest

Over the weekend, news hit the wires that the UK will begin to roll out the AstraZeneca/Oxford University vaccine from Monday. With access to both the BioNTech/Pfizer Inc. and AstraZeneca/Oxford University vaccines, the UK government intends to vaccinate 2 million people within the next 2-weeks.

The news, published by the Telegraph, also stated that India also plans to approve the vaccine by next week.

In the UK, a total of 616,933 people reportedly received the vaccine between 8th and 20th December. The government has ordered 40 million doses of the BioNTech/Pfizer Inc. vaccine and 100 million AstraZeneca doses.

The news hit the wires following the Malaysian government’s increased order. Last week the Malaysian government announced that it placed a 6.4m dose order with AstraZeneca. In addition, the Malaysian government was also negotiating with both China and Russia to obtain further doses.

Malaysia is currently battling a third wave of the COVID-19 pandemic. The identification of more virulent strains of the virus has led to governments ramping up vaccination orders.

Combined with a 12.8m dose order from BioNTech/Pfizer Inc., the government has secured enough doses to vaccinate 40% of the Malaysian population.

The Malaysian government expects to have sufficient doses to vaccinate 83% of the population once vaccine orders have been placed with China and Russia.

What’s next?

As governments ramp up vaccine doses, expectations are for economies to begin reopening once the “most-at-risk” have been vaccinated.

Across the EU, the UK, and the U.S this could happen before the end of January. Timelines remain key to forecasting any economic recovery.

The markets will be anticipating combined fiscal and monetary policy measures to kick start economic recoveries.

Some nations will lag the developed nations, however. Poorer nations will have less access to COVID-19 vaccines, while other nations were late in placing orders.

We can therefore expect some economic divergence that will not only impact the bourses but also the respective currencies.

The game-changer, from a vaccine perspective, remains a single-dose vaccine. To date, Johnson & Johnson is out in front in the running to deliver a single-dose vaccine. Clinical trial results are expected to be available by the end of January. If the vaccine proves to be effective and safe, Johnson & Johnson would then submit a EUA to the FDA in February. Submissions to other health regulators would be made in parallel, according to the Johnson & Johnson website.

The Latest COVID-19 Numbers

At the time of writing, the total number of confirmed COVID-19 cases stood at 80,728,962. The total number of U.S cases has risen to 19,433,847, with the total number of related deaths rising to 339,921.

Behind the U.S, India saw the total number of cases rise to 10,188,392, with Brazil reporting 7,465,806 cases in total.

For France, Germany, Italy, and Spain, the total number of cases stood at 8,102,402, with 214,174 related deaths.

Across the United Kingdom, the total number of cases stood at 2,256,005, with 70,405 related deaths.

The Pandemic Year 2020: Investors Navigating the New Normal with COVID

As we head into the holiday season, investors remain focused on COVID-19 pandemic which has forcefully plunged the world into a “New Normal”. The alarming speed of the spread of the virus across the world has transformed and reshaped the world in a short amount of time but with longer-lasting impact. As everyday life has been impacted, investors have also reassessed and realigned their investment strategies to face the new world.

Stock Market

Quarter 1 – A Trio of Crises & the Great Lockdown

The markets tumbled like dominoes hit by various headwinds at once ranging from geopolitical tensions between the US and China, Hong Kong and Iran, extreme weather conditions, an oil price war, and the novel coronavirus which forced various forms of lockdowns and social distancing across the globe. Faced by an unprecedented health crisis, and an oil crisis, the world was bracing for an unexpected economic crisis.

Volatility soared in the markets to decades high from an average of 20 to a high above 80 around mid-March causing several circuit breakers and trading halts on some stock exchanges. The stock market bottomed down, and major equity indices dropped in bear market territory ending an 11-year bull-run in the stock market. Global stocks experienced the worst week since the global financial markets.

Central banks and governments rushed in to intervene and cushion the freefall in the financial markets and support their economies which brought some degree of calm in the stock market.

Quarter 2 – The Grand Reopening & Roadmap to Recovery in a Pandemic

Investors witnessed the grand reopening in the second quarter after the great lockdown in the first quarter. Massive fiscal stimulus, ultra-low levels of interest rates, central banks interventions and optimism on the reopenings helped the stock market to rebound as fiercely and aggressively as it initially fell.

The government and central banks have absorbed nearly all the shocks of the virus on the financial markets by injecting massive liquidity in the economy, keeping credit flowing and supporting their economy with huge fiscal stimulus plan among many others unconventional plans. On the reassurance that the intervention measures are not going to fizzle out anytime soon, investors have pushed global stocks higher:

  • Major US equity indices rallied and record new highs.
  • European stocks were flaring better. Even though the Eurozone was not economically strong pre-COVID-19 crisis, the better containment of the virus compared to the US and the historic unity European countries have shown during the coronavirus crisis has boosted confidence for European stocks
  • Australian shares also rebounded significantly and reclaimed the 6,000 level to mark the best quarter in over a decade.

Quarter 3 – Vaccine Optimism, Presidential Election, and Tech Rally

While the vaccine updates and the US Presidential elections campaigns were at the forefront of the markets in the third quarter, global stimulus improving economic data, a better-than-expected earnings season and the resilience of the technology sector have lifted risk sentiment. Global equities have been on a staggering rally at the beginning of the quarter allowing the major equity indices to recover the losses made in the first quarter.

However, geopolitical risks – US/China tech war and the ending of the US pact on Hong Kong extradition and reciprocal tax treatment, the US stimulus gridlock, the rising number of coronavirus cases and the uncertainty around the pace of recovery created an environment of caution.

Investors were monitoring closely the interventions by central banks and governments to push stocks higher at the risk of the global economic backdrop and the stimulus-fueled economy. The month of September again lived up to its reputation of being the typical scary month for investors which saw major corrections in the stock market as investors were navigating in a highly uncertain environment.

Once the volatility around the US elections faded, investors were focused on the prospects of another round of national lockdowns and the lack of timely US stimulus support. The tech sector was at the centre of attention as the big tech leaders outshined when the world went into virtual reality mode. The industry biggest players: Amazon, Apple, Facebook, Alphabet, and Microsoft were somewhat well-equipped to rise to the challenges. The resilience and performance of the tech sector year-to-date stood out this year – mega-caps tech companies have tackled the pandemic relatively unscathed by its impact compared to the economic malaise other industries are facing.

  • The Reshuffling of the Dow Jones Industrial Average

Another notable event was the reshuffling of the Dow – Amgen (AMGN), Salesforce.com (CRM) and Honeywell International (HON) were added to the index while Pfizer (PFE), Raytheon Technologies (RTX) and Exxon Mobil (XOM) were removed. The moves were spurred by Apple’s decision to split its stock which will reduce the Information Technology index weight.

Apple made history in August and retakes the market-cap lead from Microsoft to become the first US company to be valued at US$2 trillion.

If immediate attention generally was on the FAANG group, Sea Ltd, the leading internet platform in Southeast Asia and Taiwan drew attention as well. The company outshines Tesla and the FAANG group of companies and emerged as the world’s best performing large-cap stock.

The Last Quarter – First Vaccinations

Amid the election mayhem and a probable contested election, the gridlock in Congress, another wave of hard lockdowns, and Brexit chaos, investors had a breather with promising vaccine updates. The back and forth on the US stimulus coronavirus relief package and Brexit negotiations took the markets on a wild ride in the last quarter. Throughout the last few months, Pfizer and BioNTech, Moderna and AstraZeneca issued convincing statements of the progress of the vaccine trials.

The emergency vaccine approvals and the first vaccinations across major countries like the US and the UK brought some relief following the ongoing surge in coronavirus cases in certain economies. Overall, there was enough optimism in the last few weeks for global equities to recover from October’s plunge.

Source: Bloomberg

US Share Market

Despite a contested election, the lack of timely fiscal support and the raging spread on the virus in the US, the share market was supported by the vaccine updates and first immunizations which took place earlier this month.

Source: Bloomberg

Similarly, the encouraging vaccine news was the bullish trigger for the European markets despite the further lockdowns in major European countries, tough Brexit negotiations and a slower economic recovery compared to its peers. As of writing, a new variant of the virus in the UK triggered a sell-off in the European markets. The CBOE Volatility Index jumped to the highest in a month above the 30 mark.

The new COVID mutation was mainly detected in the UK but the WHO confirmed its presence so far in Denmark, the Netherlands and Australia as well. Investors are closely monitoring statements on whether the new variant is more easily transmissible than the original strain of the disease.

The Australian Share Market – Back in Black

After the release of the Federal Budget, Australian shares started to decouple from US and European stocks as investors endorsed the government blitz which boosted confidence. During the month of November, the Australian share market has rallied significantly on the back of:

  • The easing of lockdown restrictions in the second most populated state and the second’s largest city in the country.
  • The positive vaccine updates coming from Pfizer and BioNTech, Moderna and AstraZeneca.
  • The confidence in the Australian economy as compared to other major countries. Consumer confidence reached a 10-year high.
  • Historically low-interest rates. Even though the RBA slashed interest rates to a historic low, there is a level of reassurance that the lower level of interest rates will stay for a longer period which means that the central bank is not expecting a deterioration in the Australian economy fuelling investors’ confidence.
  • The Asia-Pacific Free Trade Agreement has provided another level of confidence at a time of global trade uncertainty. It has also elevated expectations that both countries might initiate some sort of dialogue after the Chinese Communist Party has frozen all communications with Australian ministers.

In November, the ASX recorded their best month in decades and briefly erased its 2020 losses before retreating lower. As of writing, the index is currently trading at around 6,601.

Forex Market: The King Dollar?

The US dollar went on a roller coaster ride throughout the year. In a classic reaction to an unpredictable and uncertain event like the pandemic, the demand for haven assets triggered a rally in the US dollar. As panic gripped markets, dollar funding pressures drove the US dollar index to a 3-year high above the 102 level. Even though policymakers stepped in to enhance flows, the greenback remained in elevated levels.

Source: Bloomberg

A significantly bigger stimulus package compared to its peers at the beginning fuelled hopes that the US economy would probably recover faster than other major economies. The US dollar was unable to maintain the bullish momentum over the following quarters as risk sentiment improved and the US was still battling hard the spread of the virus with no signs of slowing down and stimulus packages were not flowing in as required.

Major currencies remained stronger than the US dollar in the following quarters. Major central banks like the RBA had to tap into QE for the first time this year and many even contemplate or left the door open for negative interest rates if warranted.

Source: Bloomberg

The Euro gathered strength on the historic unity, some economic recovery, the ECB stimulus program and EU budget. The renewed lockdowns and Brexit woes remain the factors that may drove further volatility in the EUR pairs. The EURUSD pair is trading at a high above the 1.22 level.

The Antipodean currencies were among the top gainers lifted by the additional funding from the central banks, governments, renewed confidence, economic data and the better containment of the virus as compared to other major economies. The AUDUSD pair is trading nearly three-year high around the 0.750 level.

Source: Bloomberg

As the Brexit deadline looms, the Pound swung between gains and losses driven by contradictory headlines and statements from both the EU and the UK. Traders grew more hopeful in the last few days when both parties appear committed to seeing a deal through despite significant differences on three critical issues: level playing fieldgovernance and fisheries. Investors were taken on a roller-coaster ride following intensifying deal negotiations and on-and-off positive and negative announcements.

Brexit hopes drove the GBPUSD pair to an intraday high of 1.3624 last week. The Pound plummeted on the news of a new variant of the virus and as of writing, the pair retreating lower to the 1.33 level.

Gold Rally

At the start of the year, the US dollar and Gold were moving in tandem due to the prevailing uncertainties – QE, low-interest rates, trade frictions, geopolitical tensions, global debt and growth uncertainties, gold hoarding by central banks have driven the gold price higher just below the $1,700 mark.

However, Gold was initially liquidated due to the wider and rapid spread of the coronavirus across the globe. The precious metal is viewed as a highly liquid asset and investors were in a need of cash due to margin calls and other liquidity requirements. COVID-19-induced liquidity issues caused the yellow metal to plunge to a low of $1,451.55.

The yellow metal rallied at the start of the third quarter to a high of $2,075 in the month of July but traded within a narrow range as investors digested some positive vaccines updates, improving economic data and easing lockdown restrictions. The XAUUSD pair plunged below a key psychological level below the $1,900 mark but held on to elevated levels.

From the health crisis point of view, the vaccine updates are fuelling the hopes of a quicker recovery and providing reassurance to investors. However, the amount of stimulus injected into the global economy over the last couple of months is evidence that the economic and financial recovery might take some time. Gold is still trading at a decade-high around the $1,880 mark.

Oil Market

An oil price war and the ongoing pandemic struck the crude oil market at a time where the industry was already faced with a simultaneous demand and supply shock. As the world grapples with the ongoing pandemic, different forms of lockdowns across the globe have severely impacted key industries of consumers of oil. Global activities have slowed down on a massive scale with empty roads, grounded aircraft, plunging car sales and disrupted supply chains abruptly sapping oil demand.

The extent of the disruptions in the energy market caused by the pandemic will probably leave a lasting impact on the oil market which may take years to overcome. Traders are analysing whether the impact of the pandemic will either accelerate the pace in using renewables or delay that process.

Crude oil prices have mostly remained stuck within a range below the $50 after the big plunge earlier this year. With a dire demand outlook from as per the October reports, there are increasing pressure from OPEC members and its allies to balance the supply side and avoid flooding the oil market with extra supply.

In a pandemic-induced environment, investors are navigating a new normal with COVID-19. Despite the painful year on the health front, the stock market had a great year driven by the prompt interventions in the financial markets by central banks and governments around the globe.

While a vaccine provided a sense of relief, we are ending the year with much uncertainty on the geopolitical, economical and health front.

By Deepta Bolaky

Disclaimer: The articles are from GO Markets analysts, based on their independent analysis or personal experiences. Views or opinions or trading styles expressed are of their own; should not be taken as either representative of or shared by GO Markets. Advice (if any), are of a ‘general’ nature and not based on your personal objectives, financial situation or needs. You should therefore consider how appropriate the advice (if any) is to your objectives, financial situation and needs, before acting on the advice. If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.

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COVID-19 Update – The EU Commission Authorizes the Comirnaty Vaccine

The Latest

On Monday, the EU’s European Medicines Agency (“EMA”) recommended the authorization of the BioNTech/Pfizer Inc. vaccine.

An assessment report, with details of the EMA’s evaluation of Comirnaty, and the full risk management plan is due out in the coming days.

According to the EMA report, the recommendation was given for the following reasons:

  • Comirnaty offers a high level of protection against COVID-19.
  • The main trial showed that the vaccine has a 95% efficacy.
  • Most side effects are mild to moderate in severity and are gone within a few days.

The EMA decided that the Comirnaty benefits outweighed the risks, allowing the recommendation for authorization.

Based on the recommendation, BioNTech/Pfizer Inc. will need to provide additional trial results. Clinical trials are to last for 2-years. One key unknown is the immunization period.

Following the EMA approval, the EU Commission approved the use of the vaccine for 16-year-olds and older.

The European Centre of Disease Prevention and Control welcomed the authorization.

The ECDC website stated that the vaccines will first reach those that are in most need of protection.

National authorities have defined and identified priority groups for vaccination. These include healthcare workers, the elderly, and the vulnerable.

What’s next?

Last week, both France and Germany had announced that vaccinations would begin before the end of the year. The news had come following the EMA’s decision to bring forward its review of the Comirnaty vaccine.

In the coming days, the markets will be looking for more details on the number of vaccine doses that will be made available to the EU. Also of interest will be how the EU Commission plans to allocate the vaccine doses.

Some EU member states are more adversely impacted by the COVID-19 vaccine than others.

Following news of the new strain of the coronavirus in the UK, there will be a greater sense of urgency to vaccinate high-risk groups sooner rather than later.

Before Monday’s authorization, the EU had pre-ordered 200 million BioNTech/Pfizer Inc. doses, with the option to purchase an additional 100 million doses in 2021.

AstraZeneca and Sputnik V

In addition, the EU also pre-ordered 400 million AstraZeneca doses.

A total of 700 million doses are sufficient to vaccinate 350 million EU citizens, That’s equivalent to 78% of the total population.

An additional 200 million doses would cover the shortfall, assuming that the EMA and EU Commission authorize the AstraZeneca vaccine.

The UK government expects independent regulator MHRA to authorize the AstraZeneca vaccine before the end of the year.

For the EU and beyond, the UK’s approval of the AstraZeneca vaccine will deliver a much-needed confidence boost.

Some of the most adversely affected countries, including India and Brazil, have only pre-ordered AstraZeneca doses.

With the number of new COVID-19 cases continuing to rise, pharmas are going to need to deliver more options. The more virulent strain identified in the UK has added more pressure on pharmas as new cases continue to spike.

Russia’s Sputnik V vaccine has become a viable alternative for some countries. This week, news hit the wires of India and Russia agreeing to jointly mass-produce the vaccine to deliver globally. Considering the spike in new COVID-19 cases across India and the delay to the AstraZeneca vaccine, the Sputnik V vaccine is critical. For poorer nations, both the Pfizer Inc. and Moderna Inc. vaccines are too expensive for mass vaccinations.

The Latest COVID-19 Numbers

At the time of writing, the total number of confirmed COVID-19 cases stood at 77,687,608. The total number of U.S cases has risen to 18,455,554, with the total number of related deaths rising to 326,679.

Behind the U.S, India saw the total number of cases break through the 10m level this week. Brazil has reported 7,264,221 cases in total.

For France, Germany, Italy, and Spain, the combined number of cases stood at 7,807,431, with 206,671 related deaths.

Across the United Kingdom, the total number of cases stood at 2,073,511, with 67,616 related deaths.

COVID-19 Vaccine Review – Pre-Orders, Approvals, and Prioritizations

With a number of nations in the process of delivering vaccines to high priority recipients, the focus is now shifting to the timelines.

Key considerations for governments as well as the global financial markets include:

  • Preorders: Vaccine costs means that some governments are unable to order enough vaccine doses until cheaper options are available. This means that only a small percentage of some populations will receive vaccines, leaving the remainder exposed.
  • Vaccine availability: This not only includes dose production capacities but allocation by country.
  • Vaccine approval: While a number of nations have approved COVID-19 vaccines, the large majority have yet to do so.
  • Prioritization: As has been the case in the UK and the U.S, government agencies will need to prioritize vaccine recipients. There need to be enough doses to vaccinate the most vulnerable. Any shortfall will raise doubts over whether the pandemic can be brought under control.

Pre-orders

A number of countries were swift in pre-ordering COVID-19 vaccines from pharmas. Governments had placed orders well in advance of any clinical trial results.

In viewing pre-order numbers, richer nations pre-ordered from multiple pharmas. Governments also ordered in excess of total populations in some cases. The excess orders were likely made to ensure sufficient doses, with the availability of vaccines likely to be staggered.

BioNTech/Pfizer Inc. was the first to receive emergency approval, with Moderna Inc. and AstraZeneca next in line.

Looking at pre-orders across the most adversely affected nations, the numbers are quite telling:

  • The U.S: 700 million doses.
    • Pfizer Inc.: 100 million.
    • Moderna Inc.: 100 million.
    • AstraZeneca: 500 million.
  • The EU: 700 million doses.
    • Pfizer Inc.: 300 million.
    • AstraZeneca: 400 million.
  • India: 500 million doses.
    • AstraZeneca: 500 million doses.
  • Japan: 290 million doses.
    • Pfizer Inc.: 120 million.
    • Moderna Inc.: 50 million.
    • AstraZeneca: 120 million.
  • The UK: 145 million doses.
    • Pfizer Inc.: 40 million.
    • Moderna Inc.: 5 million.
    • AstraZeneca: 100 million.
  • Brazil: 100 million doses.
    • AstraZeneca: 100 million.
  • Indonesia: 100 million doses.
    • AstraZeneca: 100 million.
  • China: 100 million doses.
    • Pfizer Inc.: 100 million.
  • Canada: 96 million doses.
    • Pfizer Inc.: 20 million.
    • Moderna Inc.: 56 million.
    • AstraZeneca: 20 million.
  • Australia: 43.8 million doses.
    • Pfizer Inc.: 10 million.
    • AstraZeneca: 33.8 million.

While the number of pre-orders is on the higher side, it is worth noting, however, that more than 1 dose is required for effective inoculation.

This means that, for the U.S, there are sufficient doses to vaccinate the entire population. This is not the case for many of the above countries, however.

Vaccine and Population Coverage

Assuming that each nation eventually receives all pre-ordered vaccines from the three leading pharmas, vaccine coverage is as follows:

Canada: 127.7% coverage.

Japan: 114.6% coverage.

The UK: 108.7% coverage.

The U.S: 106.6% coverage.

All other governments have pre-ordered vaccine doses that fall short of total population numbers.

Australia (87.6%) and the EU (78.2%) currently fall short but will likely be in a position to bridge the gap as more vaccines become available.

Other nations, however, will likely be in for a long wait. For poorer nations, a cost-effective, single-dose vaccine is needed. As importantly, will be storage requirements for the vaccines. Poorer nations, for instance, may not be able to store and distribute the BioNTech/Pfizer Inc. vaccine.

Amongst the most adversely affected COVID-19 nations, two nations stand out in terms of population coverage.

These are Brazil, which has pre-ordered doses to vaccinate 23.9% of the population, and India. The Indian government has pre-ordered enough doses to vaccinate just 18.5% of the population.

From the numbers alone, a clear divide exists across the globe and, more importantly, suggests that the pandemic will remain for some time to come.

The Latest COVID-19 Numbers

Mindful of the above vaccine to population coverage figures, it is worth noting the latest COVID-19 cases.

At the time of writing, the total number of COVID-19 cases stood at 74,526,806, of which 52,363,010 have recovered. Total COVID-19 related deaths currently stand at 1,655,044.

By Country:

  • The United States: 17,392,618 has reported cases, which accounts for almost a quarter of all cases worldwide. Total deaths stand at 314,577, accounting for almost one-fifth of total deaths. Total population: 331.0m.
  • India: 9,951,072 reported cases, with 144,487 related deaths. Total population: 1,380.0m.
  • Indonesia: 636,154 reported cases, with 19,248 related deaths. Total population: 273.5m.
  • Brazil: 7,042,695 reported cases, with 183,822 related deaths. Total population: 212.6m.
  • Japan: 184,042 reported cases, with 2,688 related deaths. Total population: 126.5m.
  • The UK: 1,913,277 reported cases, with 65,520 related deaths. Total population: 67.9m.
  • Canada: 481,630 reported cases, with 13,799 related deaths. Total population: 37.7m.
  • Australia: 28,081 reported cases, with 908 related deaths. Total population: 25.5m.

While easier to consider for the above nations, vaccine allocation across the EU is a more complicated matter.

Some nations are more adversely impacted than others, these being France, Germany, Italy, and Spain. It is therefore more likely that these nations would receive a greater allocation than the likes of Estonia, which has only reported 19,271 cases.

For France, Germany, Italy, and Spain, the total number of reported cases stands at 7,487,259, with 198,935 related deaths. Combined population: 256.3m.

Other Adversely Affected Nations

  • Russia: 2,734,454 reported cases, with 48,564 related deaths. Total population: 145.9m. Unlike most other nations, however, Russia has developed its own Sputnik V vaccine. Vaccinations have commenced countrywide and Sputnik V is likely to be made available to other nations. Countries such as India are reportedly considering sizeable orders.
  • Turkey: 1,928,165 reported cases, with 17,121 related deaths. Total population: 84.3m.
  • Argentina: 1,517,046 reported cases, with 41,365 related deaths. Total population: 45.2m.
  • China: 86,777 reported cases, with 4,634 related deaths. Total population: 1,439.3m.

When considering the total number of reported cases and deaths and effective containment measures, there is a reason for some nations to hold back from 100% population coverage.

Australia, amongst a number of other nations, were effective in preventing a far higher number of cases. Vaccinations in major cities, as opposed to rural areas, would likely deliver adequate protection against the virus.

For countries, such as Brazil and India, however, the COVID-19 numbers suggest that far greater coverage is needed.

A lack of vaccine coverage should therefore be a concern until cheaper alternatives are available.

Other Pharmas / Vaccines

A number of other pharmas are in the midst of clinical trials, with vaccines likely to be available early next year.

These include Johnson & Johnson, which has been playing catch up in the last few months. From Russia and China, there are also two vaccines that are drawing international interest:

Sputnik V: The Gamaleya Research Centre, which has developed the Sputnik V vaccine has announced up to 2-years of immunity against COVID-19. This is far greater than those of BioNTech/Pfizer Inc. and Modena Inc. that are likely to offer up to five months of immunization. Additionally, the vaccine has a reported efficacy rate of 91.4%.

While countries such as the U.S may refrain from ordering Russia’s Sputnik V, Brazil, India, and other adversely affected countries will likely benefit.

Sinopharm: China produced, there are reports that as many as 1 billion doses of China’s vaccine will be available next year. China is not solely reliant upon domestic vaccines and has pre-ordered the WHO-backed COVAX and 100 million Pfizer Inc. doses. The UAE is currently administering the Sinopharm vaccine.

Vaccine Approvals

The next step in the fight to end the COVID-19 pandemic is for government agencies to approve vaccines.

To date, Bahrain, Saudi Arabia, Singapore, the UK, and the U.S have approved the BioNTech/Pfizer Inc. vaccine. As previously mentioned, other vaccines are already being administered, though more approvals are needed.

Later today, the FDA is also set to review the Moderna Inc. EUA, with emergency approval anticipated following the review findings earlier in the week.

The EU has also had to bring forward its review timelines, with the EMA set to review the Pfizer Inc. vaccine on 21st December. This had been originally diarized for mid-January.

In the UK, AstraZeneca is also expecting emergency approval. As was the case with the Pfizer Inc. vaccine, other nations will likely follow. An MHRA emergency approval could be given this week or next.

For India, completion of the Sputnik V clinical trials will then allow the review process to begin.

Vaccine Prioritization

As pharmas begin to deliver vaccines across the world, government agencies have had to prioritize vaccine recipients.

The general trend has been to prioritize the most vulnerable. These include front line workers, such as 1st respondents and care home facility workers, and elderly patients.

A number of key agencies have announced the following priorities:

UK: The Joint Committee on Vaccination and Immunisation (“JCVI”): The UK’s “JCVI” announced that the first priorities should be the prevention of COVID-19 mortality and the protection of health and social care staff and systems.

U.S: The CDC’s phase sequence leaves adults with high-risk medical conditions and the over 65s in phase 1c.

In phase 1a are healthcare personnel and LTCF residents, with phase 1b including essential workers.

The EU: The European Centre for Disease Prevention and Control provided guidance on prioritization earlier this month. As was the case with the U.S and the UK, healthcare workers, the elderly, and persons with certain comorbidities form the priority groups. Due to likely shortage, however, groups will likely become smaller.

Supply Chain and Production Targets

As more nations approve the COVID-19 vaccines, the pressure will mount on pharmas to produce more doses to meet demand.

Beyond AstraZeneca and Johnson & Johnson, more vaccine options are going to be needed to bring an end to the pandemic.

Key through the remainder of this year and the 1st quarter of next year, however, will be the vaccination of high priority groups.

Success in vaccinating the most at risk in a timely manner will then bring forward the timelines to vaccinate general populations.

We can expect further priorities to be issued, which will likely be dependent upon the vaccination process in the coming months.

Countries may have pre-ordered sufficient doses for total population coverage. These counties will need to receive these orders, however, to bring the virus under control.

Assuming that there are no adverse effects from vaccines becoming available, the focus will remain on production, distribution, and new vaccines to market.

Once mass inoculation is in process, an end to the pandemic will be in sight.

COVID-19 Vaccine Update – FDA and the Moderna Inc. Vaccine Review Next Up

The Latest

With the BioNTech/Pfizer Inc. vaccine rolling out across the U.S, Moderna Inc. was also in focus in the early part of the week.

The FDA reported that reviewers found Moderna Inc.’s vaccine to be safe and effective ahead of the FDA decision on the EUA submission.

On Tuesday, the FDA affirmed Moderna Inc.’s high efficacy rate, declaring the vaccine to be 94.1% effective.

The Moderna Inc. approval process is a material one, with Moderna Inc. continuing to estimate the production of 20 million doses over the remainder of the year. When considering the fact that only 2-weeks remain before the end of the year, 20 million doses is a high number.

More impressively, Moderna Inc. is also aiming to 1 billion doses annually, with the support of Italian healthcare solutions provider Lonza.

On Thursday, the FDA is scheduled to meet in order to decide on whether to approve Moderna Inc.’s EUA.

In contrast to the BioNTech/Pfizer Inc. vaccine, however, the Moderna Inc. vaccine has yet to be approved elsewhere. The U.S will, therefore, be the first to administer the Moderna Inc. vaccine.

From the UK, news of allergic reactions to the BioNTech/Pfizer Inc. allowed the FDA to advise hospitals and healthcare centers to prepare for any adverse allergic reactions.

With the Moderna Inc. vaccine also an mRNA vaccine, the previous advice could also be issued.

What’s next?

For the U.S, assuming that the FDA approves Moderna Inc.’s vaccine, another large scale vaccination project will get underway.

The combined doses of BioNTech/Pfizer Inc. and Moderna Inc.’s vaccines will come much closer to the CDC’s phase 1a priority group.

This would then allow the vaccination of phase 1b and 1c groups before the end of the winter.

Other nations that had pre-ordered the Moderna Inc. vaccine included Japan (50 million), the UK (5 million), and Canada (56 million). Canada is reportedly expecting to receive 168,000 doses of the vaccine before the end of the year.

For the EU, however, the EMA was not scheduled to review the BioNTech/Pfizer Inc. until mid-January.  Pressure has reportedly risen on an EU vaccine approval, however, as member states reintroduce lockdown measures. This week, news has hit the wires that the EMA plans to review the vaccines by 23rd December. Approval would mean that high priority groups could begin receiving vaccinations before the end of the year.

According to the EMA website, the CHMP is now due to hold an exceptional meeting on 21st December.

Once the CHMP recommends marketing authorization of the BioNTech/Pfizer Inc. vaccine, the EU Commission will then fast track its decision-making process in order to grant marketing authorization in all EU and EEA Member States within days

Vaccine doses are in short supply, however, so mass vaccinations are not to be expected until late into the 1st quarter, at the earliest.

The Latest COVID-19 Numbers

At the time of writing, the total number of confirmed COVID-19 cases stood at 73,803,320. The total number of U.S cases has risen to 17,143,779 with the total number of related deaths rising to 311,068.

Things are not much better in other parts of the world, as new cases continue to spike.

This continued rise in new cases has led to a reintroduction of lockdown and containment measures.

For this very reason, the EMA has revised its vaccine review timetables to be more aligned with other developed economies

Other Pharmas

With the BioNTech/Pfizer Inc. vaccine now in circulation and Moderna Inc.’s vaccine imminent, there will be a need for more, however.

To ease production capacity pressures, a single dosage vaccine remains out of reach at present. Pricing pressures also mean that many governments will not be able to vaccinate entire populations.

Therefore, the race for a cost-effective, single-dose vaccine will continue.

AstraZeneca and the University of Oxford are also hoping for their vaccine to receive approval British before the end of the year.

According to news reports, the UK drug regulator, the MHRA, is due to approve the vaccine. There is some uncertainty, however, on whether the MHRA will approve the 1-and-a-half dose or 2 dose vaccine. Efficacy rates were 92% and 62% respectively.

The Global Financial Markets

On Tuesday, Moderna Inc.’s share price slid by 5% on the day. The slide came in spite of the FDA’s likely imminent approval.

This week, AstraZeneca’s share price also hit reverse on news of plans to purchase Alexion for $39bn…

While Pfizer Inc. also saw its share price fall on Tuesday, Johnson & Johnson’s stock price rose by 1.01%.

Having lagged the front runners, Johnson & Johnson is now the main contender to deliver a 3rd vaccine to the U.S.

Both Johnson & Johnson and AstraZeneca vaccines will need approvals, however, to have any viable chance of bringing an end to the COVID-19 pandemic.

For the major indexes, the continued progress towards multiple vaccines has allowed the markets to look beyond the latest COVID-19 numbers for now.

Key in the coming weeks will be the timelines for approvals, however, and production estimates.

Pharmaceutical Giant AstraZeneca’s Shares Slump Over 9% on $39 Billion Alexion Acquisition Deal

AstraZeneca’s shares slumped more than 9% on Monday after the global pharmaceuticals company announced over the weekend to acquire Alexion Pharmaceuticals for $39 billion or $175 per share in cash and stock.

That would be the biggest deal ever for the UK-based global pharmaceuticals company, but the company’s relative shortage of cash raised eyebrows.

According to the deal, Alexion shareholders will receive $60 in cash and nearly $115 worth of equity per share. The acquisition is expected to close in the third quarter of next year, and upon completion, Alexion shareholders will own c.15% of the combined company, AstraZeneca said in the statement.

“We expect it will take time for investors to digest the possible merits of the $39 billion cash-stock Alexion acquisition. There is a strategic rationale and valuation is reasonable, in our view, but the debate will likely focus on the sustainability of Alexion’s key C5i franchise and the significant boost to cash flow generation but slightly diluted pro-forma growth profile,” noted Peter Welford, equity analyst at Jefferies.

“We estimate +15% EPS accretion 2022-24E, with pro-forma +10% sales and +16.5% EPS CAGR 2021-25E,” Welford added.

AstraZeneca’s shares plunged to an eight-month low of GBX 7410 on Monday; the stock is up about 2% so far this year.

Analyst Comments

“A concern is what this deal tells us about AstraZeneca’s view of its own business, particularly beyond 2024-25 (we model through 2025), when Brilinta and Forxiga lose patents, and Tagrisso could see competition (although AstraZeneca stated it believes analyst consensus for both AstraZeneca and Alexion is conservative). But great companies don’t sit still; they adapt and evolve, as AstraZeneca is doing with this transaction,” said Steve Scala, equity analyst at Cowen and Company.

“The sustainability of the Alexion franchise is another risk, but we believe the concern is overblown as most sales will be transferred from Soliris to Ultomiris by the time Soliris biosimilars launch. On the branded side, no branded competitor has produced a profile as good as Ultomiris, so we think competitors will have an uphill battle taking share. Lastly, AstraZeneca would appear limited in its flexibility to do additional, sizable M&A anytime soon,” Scala added.

AstraZeneca Stock Price Forecast

Fourteen equity analysts forecast the average price in 12 months at 9,163.33p with a high forecast of 12,000p and a low forecast of 6,400p. The average price target represents an 18.80% increase from the last price of 7,713p. From those 14 analysts, nine rated “Buy”, four rated “Hold” and one “Sell”, according to Tipranks.

AstraZeneca received a GBX 9,900 price objective from equities researchers at Morgan Stanley. The firm currently has a “buy” rating on the biopharmaceutical company’s stock. UBS Group set a GBX 7,500 price target and gave the stock a “neutral” rating. Credit Suisse Group set a GBX 9,500  target price and gave the stock a “buy” rating. Jefferies Financial Group set a GBX 8,500 target price and gave the stock a “neutral” rating.

COVID-19 Vaccine Update – Pfizer Inc. Approval Imminent Amidst a Virus Surge

The Latest

On Thursday, U.S FDA advisors had voted 17-4 in favor of the BioNTech/Pfizer Inc. mRNA vaccine. The vaccine vote was for the FDA approval to be inclusive of 16 and 17-year-olds. Some FDA advisors were reportedly uncomfortable including the lower age bracket, however, which resulted in 4 votes against.

Over the course of the week, a continued rise in new COVID-19 cases and 3,000 related deaths each day mounted pressure on the FDA for rapid approval.

The markets had anticipated an FDA approval in a matter of days.

On Friday, however, the FDA notified BioNTech/Pfizer Inc. that it plans to authorize the use of the mRNA vaccine in the U.S.

There were reports, following the panel vote on Thursday that White House pressure was needed to force a swift FDA response to the panel vote.

Trump was back on Twitter on Friday, this time targeting the FDA.

It was another big week on the vaccine front. With an FDA green light now imminent and the UK already in vaccination mode, Canada’s health regulator also approved the Pfizer Inc. vaccine in the week.

Canada joined Bahrain, Britain, and Saudi Arabia as the first nations to approve the vaccine, with the U.S likely to be next to join a rapidly growing list.

What’s next?

For the U.S, the federal government’s vaccine distribution program will begin within 24-hours of approval. Known as Operation Warp Speed, the government will liaise with Pfizer Inc. to deliver the vaccine to the most vulnerable by the early part of next week.

As the FDA readies to formally approve the BioNTech/Pfizer Inc. EUA, the FDA is also due to review the Moderna Inc. vaccine next week.

There will be mounting pressure for more rapid review times as other pharmas begin to complete clinical trials.

With around 21 million healthcare personal and approximately 3 million long-term care facility residents (“LTCF”), Pfizer Inc. and Moderna Inc. will not have sufficient doses produced to vaccinate phase 1a recipients this year.

Following BioNTech/Pfizer Inc.’s supply chain issues, the U.S is now reportedly due to receive just 6.4 million doses this month. That falls well short of the 24 million phase 1a recipients prioritized by the CDC, let alone the 330 million U.S population.

The Latest COVID-19 Numbers

At the time of writing, the total number of confirmed COVID-19 cases stood at 71,414,262. The total number of U.S cases has risen to 16,290,412, with the total number of related deaths rising to 302,727.

Things are not much better in other parts of the world, with new cases continue to spike in the winter months.

This continued rise in new cases will place additional pressure on other nations to catch up with Britain and the few others that have already approved the vaccine.

For the EU, the EMA is not due to review the vaccine for another month…

Other Pharmas

With the BioNTech/Pfizer Inc. vaccine now being delivered and orders mounting, Moderna Inc. is next.

Last week, news of Sanofi and GlaxoSmithKline’s vaccine showing inadequate immune response in clinical trials was a blow.

This comes off the back of issues raised over AstraZeneca and the University of Oxford’s clinical trial parameters. With AstraZeneca having kicked off a global clinical trial just weeks, hopes are that a 3rd vaccine could be approved in early January.

With the pressure to deliver an effective vaccine building, news hit the wires on Friday of AstraZeneca joining Russian scientists in a bid to improve efficacy rates. British and Russian scientists are reportedly planning to see whether combining the respective shots would deliver better results.

Clinical trials are due to start at the end of the year. AstraZeneca will also be combining its vaccine with the BioNTech/Pfizer Inc. vaccine, with clinical trials set to start in January.

Based on the latest news, Johnson & Johnson is also aiming to deliver a vaccine in early 2021.

Expectations are that inoculations beyond high priority recipients would begin towards the end of the 1st quarter. This would be aligned with Johnson & Johnson and AstraZeneca’s conclusion of clinical trials and regulatory approvals.

The Global Financial Markets

While country approvals of BioNTech/Pfizer Inc.’s vaccine are positive, too few countries have approved the vaccine to-date.

Production capacity issues also mean that countries will not receive enough doses to vaccinate entire populations.

This leaves countries and economies at the mercy of the COVID-19 pandemic for longer than would be liked.

Once there are 3 to 4 effective vaccines available in the market place, however, conditions should improve.

An end to the winter flu season coinciding with widely available COVID-19 vaccines would allow governments to begin to fully reopen economies.

We should then see a more meaningful economic recovery, supported by both fiscal and monetary policy measures.

Some nations will lag, however. Delays in ordering vaccinations and the high price of the BioNTech/Pfizer Inc. and Moderna Inc. vaccines means that some nations will have to wait.

These economies will suffer for longer before any recovery can begin in earnest.

COVID-19 Vaccine Update – It’s All Eyes on the FDA and BioNTech/Pfizer Inc.

The Latest

It’s a big day on the COVID-19 vaccine front, with the FDA scheduled to review BioNTech/Pfizer Inc.’s mRNA vaccine later today.

Lagging behind the UK approval that came last week, there will be plenty of pressure on the FDA to give the approval.

COVID-19 cases across the U.S continues to rise as U.S states make their way through the winter months.

Approval would mean that BioNTech/Pfizer Inc. will be able to begin distributing vaccines as early as the weekend.

Unfortunately, supply chain issues have meant that vaccine production for the year will be as much as 50% lower than initially forecasted.

This means that the continued rise in new COVID-19 cases across the U.S is unlikely to abate anytime soon.

What’s next?

Assuming that the FDA approves BioNTech/Pfizer Inc.’s EUA, the U.S government is due to receive 25 million doses by the end of the year.

That just covers 12.5 million of more than 330 million people living in the U.S.

When considering the CDC’s high priority vaccine recipients, the number of vaccines is not enough to cover the first priority group.

This will leave doctors, nurses, lab technicians, and EMT and hospital staff at risk, not to mention the most vulnerable.

With prioritization ultimately sitting at the state level rather than the Federal level this will leave the most adversely affected states vulnerable to further spikes.

Based on the sheer numbers, Moderna Inc. and AstraZeneca will need to also be in a position to ease demand pressures.

The CDC’s phase sequence leaves adults with high-risk medical conditions and the over 65s in phase 1c.

In phase 1a are healthcare personnel and LTCF residents, with phase 1b including essential workers.

To put it into perspective, the CDC also provided estimate numbers of vaccine recipients within the phase 1a category:

  • Healthcare personnel – Approx. 21million.
  • Long-term Care Facility Residents (LTCF) – Approx. 3 million.

A total of 25 million BioNTech/Pfizer Inc. doses are not enough to cover healthcare personnel, let alone LTCF and phase 1b and phase 1c recipients.

With Moderna Inc. and AstraZeneca also delivering vaccines, the reality is that a single dose vaccine is needed.

The Latest COVID-19 Numbers

At the time of writing, the total number of confirmed COVID-19 cases stood at 69,381,422. Conditions in the U.S and parts of Europe have continued to deteriorate. The total number of U.S cases has risen to 15,824,444.

India and Brazil have reported a total of 9,767,371 and 6,673,118 cases respectively, sitting behind the U.S as the worst affected.

France (2,324,216), Italy (1,770,149), Spain (1,725,473), and Germany (1,245,729) are also in desperate need of a vaccine. For the EU, however, vaccine reviews are not due until next month.

Other Pharmas

While BioNTech/Pfizer Inc. and Moderna Inc. are leading the race, there is a desperate need for more vaccines.

In reality, there is not only the need for more vaccines but single-dose vaccines.

This week, Johnson & Johnson announced that results from clinical trials will be released earlier than previously expected.

More good news is going to be needed for there to be a credible threat to the COVID-19 pandemic.

Trust issues mean that vaccines from countries such as China and Russia would unlikely be considered for review.

This leaves the door ajar for the rest of the major pharmas to deliver. These include but are not limited to the following:

U.S Headquartered

Mateon Therapeutics: Listed on OTCMKTS (“MATN”) and headquartered in California.

Merck & Co.: Listed on the New York Stock Exchange (“MRK”) and headquartered in New Jersey, USA.

Moderna Inc.: Listed on the NASDAQ (“MRNA”) and headquartered in Cambridge, Massachusetts, USA.

Pfizer Inc.: Listed on the New York Stock Exchange (“PFE”) and headquartered in New York City. (Pfizer Inc. has partnered with Germany’s BioNTech SE)

Sorrento Therapeutics: Listed on the NASDAQ (“SRNE”) and headquartered in California. Currently trailing many of the front runners in the race for an effective vaccine.

Talem Therapeutics: This is a wholly-owned subsidiary of ImmunoPrecise Antibodies USA. Its parent company, ImmunoPrecise Antibodies Ltd is listed on the Toronto Stock Exchange.

Tonix Pharmaceuticals: Listed on the NASDAQ (“TNXP”) and headquartered in New Jersey.

Europe Headquartered

AstraZeneca: Listed on the London Stock Exchange (“AZN”) and headquartered in Cambridge, England and Sodertalje, Sweden.

GlaxoSmithKline: Listed on the London Stock Exchange (“GSK”) and headquartered in Brentford, England.

Grifols, S.A: Listed on the Bolsa de Madrid (“GRF”) and headquartered in Barcelona, Spain.

Asia Headquartered:

GC Pharma: Listed on the Korea Stock Exchange (“006280”) and headquartered in Yongin, South Korea.

The Global Financial Markets

Progress by the leading pharmas continues to support riskier assets. Hopes of other pharmas completing successful trials have also provided support.

Clinical trial results, however, will need to deliver impressive numbers for a global end to the COVID-19 pandemic.

Failure for other pharmas to begin rolling out vaccines will test support for riskier assets.

The sheer numbers needing vaccines on the front line mean that other high priority recipients remain exposed. Therefore, a credible threat remains to the likes of the EU and beyond that have fallen behind Britain, and possibly the U.S, on approving effective vaccines for circulation.

COVID-19 Vaccine Update – It is all Eyes on UK Vaccinations and the FDA This Week

The Latest

Last week, Pfizer Inc. cut its mRNA vaccine production numbers as a result of supply chain issues. Quality control issues led to Pfizer Inc. cutting its projected doses for the year by as much as 50%.

The announcement was a reality check for the markets, with the pharmas in need of an unprecedented amount of raw materials to meet government pre-orders that have been placed globally.

In recent weeks, we had identified production and supply as the next key areas of focus for governments and the markets.

Production and supply bottlenecks would certainly raise questions over how quickly and effectively the COVID-19 pandemic can be stamped out.

Following the announcement that BioNTech/Pfizer Inc. would produce 50 million doses, allocation now also becomes an area of focus.

The UK was the first to approve BioNTech/Pfizer Inc.’s vaccine, with the UK government having pre-ordered 145 million doses of the BioNTech/Pfizer Inc. vaccine.

With doses in shorter supply than had initially been expected, the government is expecting 800,000 doses this week.

As the UK government readies to begin vaccinating high-risk groups, prioritized by the Government’s Joint Committee on Vaccination and Immunisation (“JCVI”), governments globally and the markets will be looking for any logistical issues.

BioNTech/Pfizer Inc. will also need to meet the 800,000 dose promise. Failure to deliver on the lower number and expect increased concern over the ability to any meet pre-orders.

What’s next?

The FDA is set to review the BioNTech/Pfizer Inc. vaccine on Thursday. Assuming that there are no issues in approving the vaccine, the U.S will be next in line to receive the mRNA vaccine.

Ahead of the FDA review, the CDC has also had to prioritize vaccinations in the U.S.

BioNTech/Pfizer Inc. expects to deliver 25 million doses to the U.S before the end of the year. That’s enough to vaccinate just 12.5 million of more than 330 million people living in the U.S.

Last week, the CDC identified doctors, nurses, lab technicians, and EMT and hospital staff as first priority. The CDC also recommended that employees and residents of long-term care centers also fall into the first priority bracket.

While the onus normally falls on individual states to prioritize, it is expected that the CDC prioritization will be followed.

Beyond the first priority list, the next group is to include older adults, those with underlying medical issues, and essential workers.

For those that fall out of these groups, doses are unlikely to be available until the 2nd quarter of next year, at the earliest. This is assuming that there are no further supply chain issues or production bottlenecks.

Based on the sheer numbers, Moderna Inc. and AstraZeneca will need to also be in a position to ease demand pressures.

With AstraZeneca having only recently kicked off global trials, however, it could be some time before a 3rd vaccine is available.

The Economic Outlook

Based on the considerations above, vaccines will reach some nations more quickly than others. In fact, when considering government pre-orders from amongst the most adversely affected nations, some pre-orders fall woefully short of numbers needed to stem the rise in new cases.

On this basis, economic hardship in developing economies, in particular, are unlikely to subside any time soon.

Coupled with the global economic meltdown, this does mean that it will take years for some economies to recover.

The good news is, however, that economies more reliant upon tourism may begin to create travel bubbles with nations receiving the vaccine doses in higher numbers.

These nations would include Canada, the UK, and the U.S, who have pre-ordered more doses than total populations. Australia and the EU have also pre-ordered doses to vaccinate a significant size of the respective populations.

By contrast, however, India (18.5%) and Brazil (23.9%) fall woefully short, for example, and may remain in isolation for an extended period of time.

The Latest COVID-19 Numbers

When considering the continued rise in new COVID-19 cases, delivery of the doses could not be more critical.

At the time of writing, the total number of confirmed COVID-19 cases stood at 67,385,285. Conditions in the U.S continued to deteriorate, with the total number of cases rising to 15,159,529.

India and Brazil have reported a total of 9,676,801 and 6,603,540 new cases respectively, sitting behind the U.S as the worst affected.

France (2,292,497), Italy (1,728,878), Spain (1,699,145), and Germany (1,184,845) are also in desperate need of a vaccine. These numbers would have been far worse had the respective governments not reintroduced containment measures last month.

For the EU, however, the EMA will not review the Pfizer Inc. and Moderna Inc. vaccines until mid-January. When considering the sheer number of pre-orders, it may also be some time before EU member states are able to vaccinate a good proportion of the population.

With the vast number of doses in demand, the need to prioritize will likely create plenty of tension.  Any uncertainty over meeting projected dosage numbers for this year and next and risk aversion may well hit the markets.

There is also the vaccine’s actual effectiveness in the real world that will likely face scrutiny. Last week, Pfizer Inc. CEO Albert Bourla had reportedly stated that he was not certain if the vaccine would prevent transmission.

This uncertainty certainly causes more pain for governments looking to end the spread of the coronavirus…