Covid vaccine is great for humanity – and not bad for the stock market, either | Medical research


” A great day for science and humanity, ”said Pfizer CEO Albert Bourla. It was also a good solution for the stock markets. The FTSE 100 index rose nearly 5% as the US company and its German partner, BioNTech, announced promising first results from their Covid vaccine trial.

There is an obvious danger of getting carried away – of assuming that rapid vaccine development is now a snap – but the strong market response makes sense. For starters, while the tone around the Pfizer-BioNTech trial has been optimistic for weeks, the first batch of data was much better than expected. An efficacy rate of 90% is a very high number in any Phase 3 clinical trial.

Second, the stock market reaction has focused on a few sectors – those that have been crushed by Covid since February. It was not a blind gathering.

Can Rolls-Royce Really Be Worth 44% More Than Last Friday? Does it make sense that IAG, the owner of British Airways, is up a quarter? In fact, we can plead. Life may never be the same for the aviation industry again, but if the risk of multi-year collapse has diminished, it is an important development.

Caution needs to be neon-lit, of course. The Pfizer-BioNtech vaccine is simply a candidate for approval, and the next set of data may not be as good. A trial involving 46,000 people cannot be expected to detect one in 100,000 safety events. We do not know whether the immune response is different between the young and the old. Viruses evolve. More than one Covid vaccine will be needed, scientists have constantly warned.

These are all reasons to believe that the stock markets will remain volatile – and it is shocking to see the S&P 500, the main US index, at an all time high. But science has offered the surest route for economic recovery, and there may be progress.

A calm view of the housing market that the Chancellor should heed

Here’s a refreshing sight: A home builder refuses to pressure the government for more support. The chancellor should allocate resources where they are needed most, says Taylor Wimpey chief executive Pete Redfern, “and, at the moment, that’s not our industry.”

Well said. Taylor Wimpey’s update on Monday was an account of all that’s going well. “The business environment remains resilient and the rapid recovery in the housing market is a testament to the underlying strength in demand and the favorable lending environment,” the company said. He expects his profits for next year to be ‘significantly higher’ than the city’s current forecast, implying a figure of £ 700million – not so far from the £ 850million seen in 2019.

Other home builders have also reported strong order books in recent weeks. Unlike Redfern and Taylor Wimpey, however, they generally attempted to frighten the Chancellor with visions of fragility.

Redrow chairman John Tutte has worried about a ‘market disruption’ next March when stamp duty holidays under £ 500,000 end, as do restrictions on purchasing aid should come into force. John Allan, his counterpart at Barratt Developments, said more needs to be done to help first-time buyers now that lenders have pulled high-value mortgages.

Redfern’s calmer analysis is one Rishi Sunak should heed. There is no sign – at least not yet – of a hiatus next spring in Taylor Wimpey’s outlook. “At many sites we are selling today for deliveries in the second quarter of 2021 and beyond,” he says. As for loan conditions, they indicate that low interest rates are the most useful factor for buyers.

Many industries, such as events and hospitality, are in dire straits. Large home builders, who can once again glimpse their profit margins of over 20%, are not among them. Sunak does not need to intervene.

Mandatory and standardized ESG reporting is a step towards mental health

Corporate reporting on climate risks, like reporting on ESG (environmental, social and governance) issues, is confusing. There are too many versions out there. It’s hard to tell who chooses criteria based on their own narrative.

Mandatory reporting to a common standard, as the government is now promising from 2025 for large UK companies and financial institutions, is therefore a step towards sanity and understanding. Reporting standards need to be high, obviously, but the principle of forcing companies to spit out comparable climate numbers is excellent.


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