An early morning announcement from drug giant Pfizer and biotechnology firm BioNTech helped spark the rally. The companies said their vaccine candidate was more than 90 percent effective, compared with a placebo, offering the strongest sign yet that a vaccine — and with it a possible end to the pandemic — was within sight.
“I think the 90% success rate in trials is on the high end of street expectations given the 40-60% success for seasonal flu vaccines,” Wayne Wicker, chief investment officer at Vantagepoint Funds, said in an email to The Post. “This is going to give a real boost to a broader range of stocks beyond technology as shown by the outsized gains in the Dow premarket. With greater clarity on both political and health issues, this should provide additional momentum in the short run.”
Biden applauded Pfizer’s breakthrough in a statement Monday, but warned that the end of the battle against covid-19 is still months away. “Today’s news does not change this urgent reality,” he said. “Americans will have to rely on masking, distancing, contact tracing, hand washing and other measures to keep themselves safe well into next year.”
Public health experts warn that the nation is entering the pandemic’s worst phase. The United States surpassed 10 million coronavirus cases on Monday, just 10 days after hitting 9 million. At least 237,000 Americans have died of the coronavirus.
Companies whose stocks have been pummeled by the pandemic, especially in travel, saw remarkable swings: Carnival cruise stock leaped 39.3 percent, while Delta, American and United Airlines all jumped at least 15 percent. Pandemic winners saw major reversals: Zoom’s stock tumbled 17.4 percent, while Wayfair and Overstock each slumped more than 20 percent.
If Pfizer’s vaccine “turns out to be the real deal, then this is a game-changer,” Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said in comments emailed to The Post. “To the extent that consumer spending and economic activity have been suppressed by concerns of the increasing Covid cases, anything that can reverse that trend will be welcomed by the markets.”
The MSCI All-Country World Index hit a new high on Monday as equities soared overseas. Asian markets advanced across the board, led by Japan’s Nikkei 225, which swelled 2.1 percent to a record high, and the Shanghai Composite index, which gained 1.8 percent. European markets were also buoyant, with France’s CAC 40 soaring 7.5 percent and Germany’s DAX jumping nearly 5 percent. The benchmark Stoxx 600 index advanced nearly 4 percent.
The recent surge in infections has renewed business and travel restrictions in some countries. If the virus cannot be tamed, it could trigger the widespread renewal of shutdowns that ushered the United States into recession earlier this year.
“Today is a great day for science and humanity,” Albert Bourla, Pfizer’s chairman and chief executive, said in a statement. “We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen.”
Oil markets also rallied Monday, as a possible vaccine opens the door to new demand for gasoline and other petroleum products. Brent crude, the international oil benchmark, jumped nearly 10 percent to $42.74 per barrel. West Texas Intermediate crude, the U.S. oil benchmark, advanced 11 percent to $43.35 a barrel.
As investors sought out riskier territory, the yield on the 10-year U.S. Treasury note inched up 0.13 percent. Bond yields move inversely to prices. Gold, another safe-haven, plummeted more than 4.5 percent to $1,863 per ounce.
Investors also reacted to Biden’s victory. On Monday, the president-elect announced the members of his coronavirus task force, a group composed of doctors and public health experts, signaling his intent to take a science-based approach to bring the pandemic that has killed more than 237,000 Americans under control.
“While the threat of legal action by Trump could delay proceedings, investors are pricing in almost zero chance for the incumbent to destabilize affairs” Russ Mould, investment director at AJ Bell, wrote in comments emailed to The Post “That means the market is in risk-on mood.”
In the presidential campaign’s final days, analysts had begun talking of a “Blue Wave” that would deliver Democratic control at both ends of Pennsylvania Avenue and the possibility Biden would produce a multitrillion-dollar stimulus bill early next year that would revive the slowing recovery.
Stocks soared last week as the prospect of a GOP-controlled Senate reduced the likelihood that a Biden presidency would usher in tax increases and sweeping regulatory changes, which many analysts considered “the goldilocks outcome” in the U.S. presidential contest. But the balance of power won’t be decided until January, when Georgia will hold runoff elections for both Senate seats.