Issue

Why Are Stocks at Record Highs?

record highs

As stocks hit record highs, some positive news emerged on the effectiveness of vaccines against the new virus variants.

The Pfizer/BioNTech Covid-19 vaccine appeared to work against a key mutation in the highly transmissible new variant of the coronavirus discovered in the U.K., according to a new study.

Pfizer and scientists from the University of Texas conducted the study.

It found the vaccine was effective in neutralizing virus with the so-called N501Y mutation of the spike protein.

The study was conducted on blood from people who had been given the vaccine. However, its findings are limited. It did not look at the full set of mutations being found, such as those in the South African variant.

Phil Dormitzer is one of Pfizer’s top viral vaccine scientists. He said it was encouraging that the vaccine appears effective against the N501Y mutation and 15 other mutations the company has tested against.

But he had the typical caution of a scientist. He said, “So we’ve now tested 16 different mutations, and none of them have really had any significant impact. That’s the good news. That doesn’t mean that the 17th won’t.”

Next on his agenda I’m sure is this:  Testing the vaccine against the E484K mutation of the South African variant. It has many more extensive changes to the spike protein than the UK variant.

I’m keeping my fingers crossed.

The Big News

Moderna Says Vaccine  Will Protect for Years

Moderna’s Covid-19 vaccine is likely to offer protection of up to a couple of years. So says its CEO, Stephane Bancel, even though more data is needed to confirm that. Bancel added his company was about to prove that its vaccine would also be effective against variants of the coronavirus seen in Britain and South Africa.

CureVac Teaming With Bayer On Vaccine

Germany’s CureVac (CVAC) has teamed up with Bayer to accelerate the development and production of its Covid-19 vaccine. Until now, CureVac said it could produce up to 300 million doses in 2021 and a further 600m doses in 2022. That is far less than BioNTech/Pfizer’s 1.3 billion doses next year.

States Urged to Be Flexible On Vaccines

The Trump administration is urging state governors to be more flexible regarding who is allowed to receive coronavirus vaccines. Alex Azar, US health secretary, said on Wednesday “If for some reason their [states] distribution is struggling and they are having vaccines sit in freezers, then by all means you ought to be opening up to people 70 or over, 65 or over.”

Australia Accelerates Vaccine Plan

Australia is accelerating its Covid-19 vaccine rollout amid growing concerns about  new virus strains. Vaccinations of vulnerable groups would begin in mid-to-late February, rather than in late March as initially planned. Health workers, border security personnel and aged care residents will be at the front of the queue. The plan  cites a target of 4 million people by the end of March and half the adult population by the middle of the year.

UK Variant Stalking Nursing Homes

Sadly, the virus variant killed half the residents at a nursing home in Britain over Christmas. This raised fears that the more contagious variant of the virus is beginning to penetrate nursing homes in the country. Residents in these facilities need to be vaccinated ASAP.

The Coronavirus Numbers

The U.S. has now surpassed 4,000  daily Covid deaths. Here are the numbers from Friday at 8 a.m. ET from Johns Hopkins University:

  • 88,153,661 Infected Worldwide
  • 1,900,669 Deaths
  • 21,585,272 Infected in the U.S.
  • 365,346 Deaths in the U.S.

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What’s Next

The risk-on mood continues to overrun Wall Street.

Yesterday was another day as stocks hit record highs. The Nasdaq Composite rose 2.6% to close above 13,000 for the first time. The Dow added 0.7%, closing above 31,000 for the first time. The S&P 500 also hit record highs. It rallied 1.5% and closed above 3,800 for the first time.

The Dow transports – a good proxy for expected economic activity in the U.S. – also hit record highs.

And the rally remains worldwide.

The Stoxx Europe 600 was up 0.6% by midday Friday. That put the benchmark on track to close the week nearly 3% higher. That’s its best performance since the vaccine-led rally of early November.

The Asia-Pacific region was strong, too. Japanese stocks surged Friday to record highs, a 30-year peak! The Nikkei 225 Index was up about 1.5%.

And let’s not forget the outlook for the tech sector has brightened considerably. This comes after semiconductor makers Samsung Electronics and Micron Technology (MU) forecast robust profits and revenues.

Finally, bitcoin surpassed the $40,000 level and has roughly doubled in price over the past month.

And, a top Tesla engineer just QUIT . . . and is now creating a brand new EV battery. Go here to grab Pre-IPO shares of this new EV stock.

Yours in Health & Wealth,

Tony Daltorio

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