As widespread inoculations have begun, the global financial markets have certainly been impacted as a result. The hopefulness of the COVID-19 vaccines has ignited some optimism about the recovery of certain trading sectors, the potential end in sight for the virus, and a return to normality.
As the success of the vaccine roll-out continues, market analysts predict that there will be a shift from stocks related to a pandemic lifestyle, and that originally benefited from a stay-at-home mindset, to the shares of companies that are more adapted to a world in recovery.
The sector which has seen a spark in interest is, of course, the drug firms themselves, who have had these innovative breakthroughs in the research and production of the vaccine. In November 2020, shares for the pharmaceutical company Pfizer rose by 9%, as they were one of the first to announce the 90% effectiveness of their vaccines. Since then, shares of Pfizer surge by 13%, with other top Covid-19 vaccine producers, BioNTech and Moderna, having rocketed by 220% and 720%, respectively, this year. Not only has the vaccine production itself had a huge impact on the stocks market and global recovery, but also the fact the percentage of efficacy was much higher than expected; it exceeded the predicted 60-70% rate, as well as the usual 40-60% efficacy rate for seasonal flu vaccines.
Those involved within the manufacturing process and supply chain of the vaccine have also had a boom of interest. According to the Bank of America, five bioprocessing research firms, including Thermo Fisher Scientific, Merck, and Avantor, are set to rise by 15% each, as they are involved in the vaccine work; whilst Pennsylvania-based West Pharmaceutical, manufacturers of vaccine packaging, should also generate gains in its industry.
The stocks that have suffered during the coronavirus crisis, have seen a turnaround and surge, given by the hope provided by the success of the vaccine. Shares in travel firms, one of the biggest areas to be hit by the pandemic, are now one of the sectors that have experienced a significant rise. Shares in International Airlines Group (IAG), owners of British Airways soared by 25% as a result of the vaccine news, and the expected recovery for the leisure and travel industry. Whilst other companies in the aviation sector including United Airlines, American Airlines, Delta and EasyJet, also all saw a huge rise.
The banking sector, especially shares in the UK’s Lloyds Bank, has also seen an improvement that has continued throughout the pandemic, as traders believe it to be a stable investment, with little to no effect as a result of the virus outbreak itself, or the production of the vaccine.
On the other hand, the American stock exchange Nasdaq, where many of the top tech firms are listed, fell by 1.5% after initially benefiting from the national lockdowns and an accelerated use of technology. This drop in investment in technology companies is evident, as hope is on the horizon for the success of vaccines and a return to normality beyond the screen. Shares in Zoom, the videotelephony software program and a household name for 2020, had fallen more than 17%, with the assumption that there would be a return to a ‘normal’ working environment and human interaction. Netflix shares, the top content streaming service, also saw a decline in trade, as there was the assumption that the public would be seeking entertainment from elsewhere, once national lockdowns were ceased.
The pandemic has caused volatility in the economy of nations as well, with the British pound reaching a record low value. Although, this may well turnaround with the introduction of vaccines. Investors have turned to trading in contracts for difference (CFD), in particular Plus500 forex trading, in order speculate on the price movement of currency pairs and stock values, and hedge their potential losses when owning the underlying asset.
As the year continues, investors and experts expect a sense of certainty when it comes to trading and market movements. With the additional outcome of the US elections and Joe Biden’s official inauguration as the 46th president, and the successful roll-out of the vaccine, with 40 million doses of the Pfizer-BioNTech vaccines approved for use in the UK alone, the markets are expected to see some stability, after such volatile and turbulent times.
