Covid 19 vaccine: Stock markets soar at Pfizer announcement

The announcement of the imminent arrival of an effective vaccine against the Covid triggered an exceptional wave of euphoria in the financial markets of the planet.

It's a bit of the opposite of a crash.

All of a sudden, the financial markets around the world took off.

The CAC 40 gained more than 7.5% in Paris.

In Madrid, Spain being even more affected by the epidemic, the increase even reached 8.5%.

Very strong increases of 5% in Frankfurt and London as well.

While we crossed the 10 million cases of Covid on Monday in the United States, the announcement of an effective vaccine also appears as a release for Wall Street which jumped 5% at the opening.

Wall Street, which was already well oriented, like other world stock markets, since the victory of Joe Biden.

In fact, everyone in finance is adjusting to what could be called a new situation.

Biden + the vaccine, it changes the landscape and it is necessary to expect a few hectic sessions to find a point of balance.

Everything is turned upside down!

Interest rates have risen as investors think central banks won't have to support the economy as much.

Oil jumped 8%.

We are betting on a faster recovery of the economy if we come out of the Covid epidemic.

Gold fell 5%, because as soon as things get better, there is less need for safe havens, etc.

All the parameters of the financial world are adjusting at top speed.

But obviously, it is on the stock market that it is the most spectacular with very big winners and very big losers.

The companies that benefit the most from the lockdown have fallen.

This is the case of Amazon or Zoom, which plunged by more than 13%.

Conversely, the entire aeronautics sector has soared: + 19% for Airbus, + 27.5% for Air France KLM, unprecedented in one day.

The same goes for the banks: BNPParibas gained, for example, 18%.

But is this market euphoria really justified?

What justifies the optimism of investors is the announced efficacy rate of 90% of this vaccine.

That against the flu has an effectiveness rather of the order of 60% according to the years.

Another pneumonia vaccine from Pfizer reduces the risk of hospitalization by about 70%.

There, we therefore have a vaccine which, if this rate of 90% is confirmed, holds the promise of a return to normal economic life more quickly than what was imagined until now.

According to Pfizer, the vaccine protects 28 days after the first injection, although it takes two.

A competing vaccine designed by Moderna, a biotech led by Frenchman Stéphane Bancel, should also be available quickly.

It uses the same technology, so we can hope that it will have a similar efficiency rate.

This is what the stock market euphoria we witnessed on Monday is based on, these are tangible elements.

We cannot say that the euphoria is not justified even if all this remains to be confirmed.