Bad news on the vaccine front today: Drug maker AstraZeneca has paused all clinical trials of the covid vaccine it is developing with Oxford University.
This was after a participant in the U.K. section of the study suffered an unexpected and serious adverse reaction to the covid vaccine.
This participant in the U.K. covid vaccine trial had been found to have transverse myelitis. This is an inflammatory syndrome that affects the spinal cord and is often sparked by viral infections.
However, it’s unclear whether this adverse reaction was linked to AstraZeneca’s covid vaccine.
A Phase I and II study of the covid vaccine published in July reported that about 60% of 1,000 participants had side effects.
All of the side effects, which included fever, headaches, muscle pain and injection-site reactions, were deemed mild or moderate and subsided during the course of the study.
Here is the key takeaway . . .
When you give a vaccine to just a few hundred people, minor side effects may be all you see.
But when you give it to thousands or tens of thousands of people in a Phase III trial, there may be some people with a more robust immune response.
These types of occurrences are why a majority of vaccines do fail in Phase III trials.
AstraZeneca’s covid vaccine (AZD1222) relies on a chimpanzee adenovirus that has been modified to carry coronavirus genes and deliver them into human cells.
This platform type has not been used yet in an approved vaccine but has been tested in experimental vaccines against other viruses, including the Ebola virus.
The adenovirus itself is generally thought to be harmless. But the coronavirus components of the vaccine are intended to incite a protective immune response that would be roused again should the actual coronavirus try to infect a vaccinated individual.
On occasion though, adenoviruses can trigger their own immune responses. These could harm the patient without generating the intended form of protection.
AstraZeneca had been on track to become one of the first drug makers to deliver results from a large trial of a Covid-19 vaccine.
The Trump administration had considered fast-tracking the company’s vaccine ahead of the U.S. presidential election. This setback points out the folly of emphasizing speed instead of hard science.
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The Big News
COVID School Closures Will Hit Global GDP for Decades
The COVID-19 epidemic’s school disruptions will cause a skill loss that could result in a 1.5% drop in global economic output (GDP) for the rest of this century. That’s according to the Organization for Economic Cooperation and Development. For the U.S., the economic loss will total $15.3 trillion. The OECD warned the bill would rise higher still if disruption to education extends into the next academic year.
A Difficult First Day of School
The first day of the new school year was bedeviled by both website crashes and cyberattacks. Many of the nation’s 1300 school districts were unprepared for virtual learning because they had spent the summer preparing for a “normal” in-class school year. However, the virus has not obliged.
Travel by Air Rebounds
This past Labor Day weekend saw travelers begin to return to the skies. The TSA recorded the highest daily count of travelers passing through security checkpoints since March. On Friday, the TSA screened 968,000 passengers. This was a tenfold increase from the pandemic low of 87,000 people in mid-April.
Oil Prices Slide Again
The oil market’s rally has run out of momentum and gone into reverse over the last two months. The reason: the pickup in fuel demand has been slower than expected as the pandemic has lingered. Most forecasters expected the market to see a sustained draw-down in excess inventory beginning now. But over the last two months, spot oil prices have stopped rising, and even started to ease. That is consistent with a market that remains over-supplied rather than under-supplied. So rather than in a tightening phase of the cycle, the oil market currently appears to be softening.
Coronavirus Is Out of Control in India
India has overtaken Brazil as the country with the second-highest number of coronavirus infections, trailing only the U.S. India’s cases have surged in small towns, rural and poorer areas. These regions are ill-prepared to cope with the onslaught because of their fragile healthcare infrastructure. India now counts for 30% of new coronavirus cases globally.
WSJ reports that Airbnb plans a secret +$18 billion IPO. That means the Silicon Valley giant is keeping details 100% confidential. Get details here: Inside Airbnb’s Confidential IPO.
The Coronavirus Numbers
Here are the numbers from Wednesday at 8 a.m. ET from Johns Hopkins University:
- 27,607,616 Infected Worldwide
- 898,284 Deaths
- 6,328,099 Infected in the U.S.
- 189,699 Deaths in the U.S.
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Yesterday, tech stocks suffered their worst sell-off since the depths of the market turmoil in March.
The Nasdaq Composite dove into correction territory – down 10%+ from its peak.
Two-thirds of the stocks in the Nasdaq Composite headed lower as some investors finally began raising concerns about the valuations of technology companies. These stocks have soared despite the economic fallout from the pandemic.
Market darling Tesla lost more than a fifth of its value – down 21% – in a single day!
However, Tesla’s stock had surged sixfold since the start of the year. It has since fallen back 34% in just the past five trading sessions.
The Big Tech stocks are out of sync with fundamentals. Bubble levels are here again.
Citigroup analysts calculated that once lower corporate tax rates were factored into valuations, the top 10 U.S. tech companies were trading before the sell-off at a trailing 12-month price-to-earnings ratio of 75 times!
The top 10 tech companies traded at 76 times during the peak of the dot-com bubble.
At least part of this is due to what I told you about yesterday . . . the massive buying of calls by Softbank and Masayoshi Son.
I just love the quote from Amir Anvarzadeh, senior markets strategist at equity advisory firm Asymmetric Advisors, in the Nikkei Asian Review: “When there is a tech bubble, Masayoshi Son is usually not too far away from the action.”
It looks like we will get a bounce today. But expect choppy markets over the short term.
But that should not affect your medium-term and long-term investment plans. The market will continue to do well over those time frames. I am especially excited about certain new companies coming to the market.
Yours in Health & Wealth,