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Markets Rise Again on Reports of Second Highly Effective COVID-19 Vaccine Candidate

  • Moderna announces that its candidate COVID-19 vaccine is 94.5 percent effective, fueling morning market rally
  • News comes on the heels of a Pfizer and BioNTech announcement that their vaccine is 90 percent effective
  • Health officials caution that precautions will need to continue for several months, but hope for more normalcy by mid-year 2021

Markets are again rallying on the news that a second drugmaker has developed a highly effective vaccine against the COVID-19 coronavirus. However, health officials have cautioned that it will take time to roll out vaccinations and that the safeguards that have become the norm in 2020 should extend into next year.

Moderna announced that its candidate vaccine was 94.5 percent effective in late stage trials. Last week, Pfizer and its European partner BioNTech announced that they had developed a 90 percent effective vaccine.

Similar to the market reaction to Pfizer’s announcement, the news of Moderna’s development boosted stocks for businesses that have been hardest hit by the COVID-19 pandemic, namely travel and leisure companies, on expectations that a vaccine will allow more of a return to normal habits. Oil stocks also made gains in anticipation of rising demand from airlines, cruise ships, and other travelers.

Companies that experienced strong growth due to millions of people staying at home more often again saw their stock values decrease. These included Netflix, Peloton, Etsy, and Zoom.

With COVID-19 cases exploding in the United States, health officials are cautioning that a vaccine will not be an immediate remedy for the pandemic. Clinical trials are still ongoing, and any vaccine needs to be approved by regulators, put into production, and distributed. Early doses are expected to go to health care workers assisting those affected by the virus.

Alex Azar, Secretary of the Department of Health and Human Services, says the Food and Drug Administration will work to rapidly approve the Pfizer and Moderna vaccines. He said he hopes to have 20 million doses available by the end of the year, with enough to provide vaccines to anyone who wants one by the second quarter of 2021.

Precautionary efforts against the pandemic, including contact tracing and quarantining affected individuals, are expected to continue until vaccinations become widespread. White House coronavirus advisor Dr. Anthony Fauci says people should continue to exercise basic safeguards such as wearing a mask, maintaining social distancing, and frequently washing their hands.

One member of President-elect Joe Biden’s COVID-19 advisory board recently suggested that a four- to six-week national lockdown may be necessary to control the virus. However, Fauci says he expects a strategy of more localized restrictions to contain COVID-19 hotspots.

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