Pfizer, the pharma giant, and its research partner, BioNTech, changed the outlook for 2021 — and for the whole world — with a huge announcement this morning (Monday, Nov. 9).
Pfizer and BioNTech shared Phase 3 trial results of a COVID-19 blocking vaccine that was effective in more than 90% of patients. The data results are early, and not yet final, but were verified by an independent external committee, and looked promising enough to share. You can read the press release from Pfizer and BioNTech here.
“Based on current projections,” the press release from Pfizer and BioNTech reads, “we expect to produce globally up to 50 million vaccine doses in 2020 and up to 1.3 billion doses in 2021.”
This is amazing. It is beyond amazing.
“It is a great day for science,” Pfizer Chairman and CEO Albert Bourla told CNBC. “It is a great day for humanity when you realize your vaccine has 90% effectiveness. That’s overwhelming.”
Markets went absolutely wild on the news.
In premarket trading after the announcement, Dow Jones futures rose more than 1,500 points. Russell 2000 small-cap futures rose a jaw-dropping 7%. The bellwether bank ETFs, KBE and KRE, were up more than 9%. Airline and cruise ship stocks jumped 20 to 25%.
On the commodities side, crude oil futures jumped an incredible 10% on the prospect of the world getting moving again. Cocoa, cotton, coffee, and copper all saw immediate gains of 1 to 3%.
At the same time, treasury bonds fell sharply, and yields rose. Precious metals prices also fell sharply, with gold and silver prices falling 3% and 4% respectively, as capital rushed out of safe havens and back into economic recovery plays.
If America has an effective vaccine, the U.S. economy can bounce back. And if Pfizer and BioNTech can manufacture 1.3 billion doses in 2021, that means not just the United States, but the entire world, can bounce back.
What’s more, with a highly reputable pharma giant behind the vaccine (Pfizer is in the top 5% of the S&P 500, with a $202 billion market cap as of this writing), confidence in the business outlook for 2021 can return immediately.
That is why the price of oil went wild alongside airlines. If travel and commerce return in 2021, oil demand can start moving back toward normal levels. This also means all manner of businesses can adjust their forward outlooks, preparing for a return of commerce in 2021, which means dusting off shelved spending plans and replenishing inventory levels now.
It is hard to overstate the potential impact of this news. If Pfizer and BioNTech come through — and based on Pfizer’s reputation and thoroughness, there is reason to believe they will — humanity may have just beaten the pandemic, and done so in time to avoid permanent economic damage.