The stakes are high for the results of Moderna Inc.’s upcoming Covid-19 vaccine trial.But when it comes to investors, the impact may already be on the price of financial assets.
The bar was raised for markets to rebound following an announcement by Pfizer Inc. that its vaccine protected 90% of Covid-19 cases in one study, investors and strategists said. Moderna’s version, which uses similar experimental messenger RNA technology, is due to report results imminently.
The success of Pfizer’s trial has “some impact” on Moderna because of their technological similarities, said Feifei Li, chief equity officer at Research Affiliates LLC. “It tells you that the probability of Moderna’s test being successful is very high,” he said. “But it should already have a price.”
Global investors are weighing whether another shake-up could come to the markets from more vaccine news after a collapse in stocks this week following news from Pfizer and German partner BioNTech SE. Stocks that had been lagging jumped and recent winners fell back, in the strongest reversal of momentum over value since 1996, at least by one measure.
The NYSE FANG + index, which tracks a basket of U.S. consumer and technology stocks, fell as much as 7% on Monday and Tuesday, its biggest two-day drop since market turbulence broke out in early September.
Li expects the value growth reversal to emerge again when one of the candidate vaccines under development is finally approved for use.
Although there is a long road ahead for widespread adoption of a vaccine, a successful trial of Moderna would help cement the turnover in value stocks, small caps and cyclicals, said Solomon Tadesse, head of quantitative research for North America equities at Societe Generale.
“If Moderna’s trial is as good as Pfizer’s, it provides confirmation of the current belief that there is a clearer path to ending the health crisis,” he said in an email.
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