CNBC coronavirus index shows why the market is rebounding

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A researcher works on a vaccine against the new coronavirus COVID-19 at the research laboratory of the University of Copenhagen in Copenhagen, Denmark, March 23, 2020.

Thibault Savary | AFP | Getty Images

A new CNBC index that tracks the market performance of companies working on a coronavirus cure shows how much of the broader stock market rebound is linked to a viable Covid-19 treatment or vaccine.

The S&P 500 Index and the CNBC Covid-19 Testing & Treatments Index have moved as closely as possible since the market low on March 23. at a time. The relationship between the two reveals how important the news on coronaviruses is to Wall Street investors, who have been saying for weeks that reliable treatment is essential to free up financial markets and a possible return to historic highs.

The index jumped 2% on Monday as the S&P 500 gained 1.3%.

CNBC’s Covid-19 Testing & Treatments Index is equal in weight and currently includes 29 companies working on testing and treating the new coronavirus. Its components are a blend of pharmaceutical and biotechnology companies ranging from Biogen, based in Cambridge, Massachusetts, to Fead City, California, Gilead Sciences.

Its main market value components are Johnson & Johnson, Pfizer, Roche and Novartis. The companies in the index will be updated as more companies become involved in the development and production of potential Covid-19 remedies.

Readers can follow the new index here or find it on CNBC.com via a quote request for “.COVID19”.

What is interesting is that the equity index at the start of the year was inversely correlated to the market, because as fears about the virus increased, investors regrouped in these biotechnologies and sold the market. .

Now, these two forces appear to be part of the same team, with the rise in the salary index driving the rise in the market.

“The debate has moved from the depths of the recession to the speed of economic recovery,” wrote De DeBusschere, head of portfolio strategy for Evercore ISI, on Sunday.

“The prospects for economic growth, and by extension, a more sustainable rotation in cyclicals, increasingly depend on a remedy / treatment for Covid that reduces the risk of progressive closure,” he added.

The disease has infected nearly 3 million people worldwide, according to the latest official figures. There have been 965,000 confirmed cases and more than 54,000 deaths in the United States, according to data from Johns Hopkins University.

Here is the full list of companies that make up CNBC’s Covid-19 salary index as of April 27, sorted by market value:

  • Johnson & Johnson
  • Roche Holding ADR
  • Novartis AG ADR
  • Pfizer
  • Abbott Laboratories
  • Eli Lilly
  • Amgen
  • Thermo Fisher Scientific
  • AbbVie
  • Sanofi ADR
  • GlaxoSmithKline ADR
  • Gilead Sciences
  • Becton, Dickinson and Company
  • Regeneron Pharmaceuticals
  • Biogen
  • Fujifilm Holdings ADR
  • Moderna
  • Alnylam Pharmaceuticals
  • Laboratory Corporation of America
  • Quest Diagnostics
  • BioNTech SE ADR
  • Hologic
  • QIAGEN
  • Adaptive biotechnologies
  • Vir Biotechnology
  • Inovio Pharmaceuticals
  • Novavax
  • Co-diagnostics
  • Daxor

CNBC’s Meg Tirrell and Patti Domm contributed to expert input on the development of the CNBC Covid-19 Testing & Treatments Index.

Click here to read more CNBC coronavirus coverage. Subscribe at CNBC PRO for exclusive information and analysis, and live business day programs from around the world.

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