Who goes up and who goes down on the stock market in the race for the anti-coronavirus vaccine

Who goes up and who goes down on the stock market in the race for the anti-coronavirus vaccine

The effect of Pfizer and Moderna announcements: Zoom in slowdown, tech stocks and Netflix streaming drop. As tourism and aeronautics shares pick up

Wall Street in New York City - (Photo by JOHANNES EISELE / AFP via Getty Images) stocks around the world. After Pfizer and Moderna announced they had developed their serum to fight the coronavirus, brokers resumed looking confidently into the future and the lockdown economy stopped pulling on the stock market. Tech stocks, such as Zoom and Netflix, have been inundated with sales over the past ten days, with revenues being diverted to the shares of those most in crisis this year: tourism and aerospace above all have recorded significant leaps forward in the first two weeks of November.

The end of the lockdown economy?

Zoom is the company symbol of a decidedly out of the ordinary 2020. The video conferencing company has been trading in New York since April 2019 and on January 1, each share cost € 76.30, in line with the launch price. The spread of the pandemic has allowed the Californian company to become well known, thanks to the effective teleconferencing platform that has brought together billions of people, eliminating the obligation to distance themselves.

The global success has been reflected on the stock exchange. The price of Zm, the stock's nickname on the Nasdaq, rose by over + 500% over the year. On Friday, November 6, a single share cost exactly $ 500. The following Monday after Pfizer's press announcement, the first downward tear with a -17.4% (to $ 413) with the stock which then settled at around $ 400 in the following week (-20% in total compared to at the last pre-announcement closing).

Zoom on the Nasdaq between October 20 and November 20, 2020 (graph from Investing) Even Netflix, which has had a lot to gain from appeals to stay at home, costs 10% in mid-November less than the previous month. Same story for the video game house Electronic Arts (-9%), eBay (-11%) or Intel (-16%). Even a granite giant like Amazon has taken a hit. At the close of November 6 for a single stock you had to shell out 3,311 dollars, on 10 at the end of the session 3 thousand were enough. Less than ten percent in a couple of sessions, with the stock stabilizing at around $ 3,100 in the days following Moderna's release.

Medical companies that are out of this vaccine race (Novavax, Dexcom and Regeneron in the United States) have also had similar parables. In Italy, Diasorin was the (only) company that was affected by the milestone achieved by Pfizer-Moderna. The multinational company from Saluggia (Vercelli) during the pandemic was very successful thanks to the development of serological tests capable of identifying patients who came into contact with Covid-19. On 6 November, the Diasorin stock was trading at an all-time high at € 201 per share; from the following session onwards the drop to 168 euros (-16.5%) after Pfizer's escape, which gave a desirable turning point to 2020.

Who runs with the anti-Covid vaccine

On the other side of the parterre are all those stocks that have collapsed under the blows of the pandemic, with revenues zeroed by the lockdown and shares depreciated. Low cost per share and high growth margins: the broker's dream.

The Stoxx Europe 600 Travel & Leisure index shows the impact of the announced vaccine on sector stocks: an immediate jump of + 10%, without even the packaging for the vials being ready. In the composite index there are hotel chains, such as the Intercontinental hotel, and carriers, such as Lufthansa and Ryanair, which fell within a few cents of its highs for the year (over 15 euros per share).

Among the airlines that literally took off thanks to the discovery of Pfizer and Moderna was Easjet: the British low-cost travel company listed in London saw its price per share soar by 35% on Monday 9 November, going from 532 pounds per security on the previous Friday to 722 at closing (again at a discount compared to the 1,100 pounds that served in February).

EasyJet's performance in London between 20 October and 20 November 2020 (graph from Investing) Aerospace companies have had the same fate - with Boeing and Airbus improving their performance by about 30 percent in the last ten days - and those of fashion and luxury, sunk by smartworking and evenings at home. The LVMH fashion house has climbed ten percentage points in a couple of weeks; in Italy Salvatore Ferragamo gained 8.8% on the Monday of the announcement and the American Ralph Lauren a tonic + 19% in a single day.

The outlook for 2021 and the new normal

According to UBS analysts, 2021 "will be the year of recovery" thanks to a combination of events that includes fiscal stimuli, consistently low interest rates and the arrival of the vaccine. "The coming months - explained Matteo Ramenghi, chief investment officer of UBS Wealth Management Italy - will be complex, but the progress of vaccines and the habit of living with the virus will allow for a gradual improvement over the next year. For many investors, this phase of volatility represents a chance to review their strategic structure and position themselves on the nascent economic cycle and on the topics that are likely to be winning ”, he added.

For the brokers of the Swiss bank "investors will be able to find long-term opportunities in trends increased by the pandemic and which will help fuel a new and sustainable future, especially in sectors undergoing a technological revolution". Focus on the zero-carbon economy, the digitization of financial services and the need for a more efficient health system. They are expected to grow "above average over the long term".

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