(Bloomberg) – US stock index futures rose after published data on a possible Covid-19 vaccine showed an encouraging response in a safety trial.
September contracts with the S&P 500 rose 1% at 9:10 a.m. in Tokyo, while Nasdaq 100 futures rose 0.7%. The results published Tuesday in the New England Journal of Medicine said that the drug from Moderna Inc. produced antibodies against the coronavirus in all patients evaluated in an initial safety trial.
“I think it is very positive,” said Peter Mallouk, president and CEO of wealth management company Creative Planning. “What we have is to reaffirm what the market thought about its overall optimism about a timeline of improvement.”
In the Moderna study, the levels of neutralizing antibodies produced were equivalent to the top half of what is seen in patients who become infected with the virus and recover, according to results published Tuesday. The Modern vaccine is one of the furthest from Covid-19.
The after-hours increase came after two volatile trading days. After briefly reaching the highest levels since the Covid-19 faded in March, the S&P 500 reversed to end Monday with a 1% drop. Then on Tuesday, after a series of swings, the benchmark ended the day with a 1.3% rise.
The Nasdaq 100 closed Tuesday’s cash trading session by 0.8% to mark the first time since March that the heavy tech indicator posted consecutive reversals of at least 2% in opposite directions. Before this week, groups of large contrasting reversals occurred during the bear markets.
The late day surge led SPY, the ETF that follows the S&P 500, to $ 322 per share, near the level reached on June 8 that has acted as solid resistance.
With a healthcare crisis at the center of the financial crisis and recession, investors are analyzing every piece of data about Covid-19 or the high-frequency metrics about recovery. Moderna’s news fits on the bright side of the ledger.
“I would classify the past few days as discounting the bad and amplifying the good,” said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors. “The Moderna news is positive and there is no doubt that a proven vaccine is an important positive catalyst, so according to general sentiment, it makes sense for the markets to recover with the news.”
However, he added: “But let’s also be clear that the news we receive is about positive progress, not definitive proof of feasibility.”
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