Financial markets swung sharply in intraday trading on Monday on news of a novel coronavirus vaccine. Moderna shares surged more than 30 percent on Monday after a closely watched human trial of a novel coronavirus vaccine produced novel coronavirus antibodies in 45 participants. U.S. stocks rose sharply on the news, with the dow gaining 800 points. As market optimism grew, spot gold was hit by profit-taking, diving about $38 from its peak and falling below the $1,730 / oz level after four losses. Crude oil rose sharply on the day, with U.S. WTI crude jumping 12.5 percent to a high of $33.10 a barrel, boosted by optimistic expectations of production cuts and the lifting of the blockade.
Moderna announced positive progress in early human trials
Moderna’s stock jumped on Monday after the company announced that a closely watched human trial of a novel coronavirus vaccine produced novel coronavirus antibodies in 45 participants.
Each participant received a dose of 25, 100 or 250 micrograms, and there were 15 people in each dose group. The participants were given two vaccines through their upper arm muscles about 28 days apart.
On day 43, two weeks after the second injection, binding antibody levels in the 25-microgram group were the same as those normally seen in blood samples from people recovering from the disease, the Cambridge, mass.-based company said. Those who had 100 micrograms had “significantly higher” levels of antibodies than those who had recovered. The company said it did not have data on the trial group that received 250 micrograms.
The vaccine also produced neutralizing antibodies against novel coronavirus in at least eight participants, the company said. Experts say neutralizing antibodies appear to be important in gaining protection.
Four participants were given a dose of 25 micrograms, while the other four received a dose of 100 micrograms. The company said the levels of the neutralizing antibodies were equal to or higher than those found in blood samples. Moderna said there is no data on antibody neutralization for other participants.
“These phase 1 provisional data, while very early, demonstrate that vaccination with mrna-1273 elicits a significant immune response from natural infections as low as 25 micrograms,” Tal Zaks, PhD, chief medical officer of Moderna, said in a statement.
“If combined with the protective effect of viral replication in a virus-attacked model of the lung virus and the dose to induce neutralizing antibody levels, these data suggest that mrna-1273 may prevent covid-19 disease and improve our ability to select a dose,” Zaks said.
The scientists hope that the antibodies will protect against novel coronavirus to some extent, but they cannot say for sure because the antibodies have not been studied and some patients seem to have recovered from the virus and have been reinfected.
U.S. officials say it could take as long as 12 to 18 months to produce a vaccine against novel coronavirus.
According to the world health organization (WHO), more than 100 vaccines are being developed worldwide. At least eight vaccines are already in human trials.
Moderna has been working with the national institutes of health to rapidly develop a vaccine. The company is the first to release data on human trials of a coronavirus vaccine.
The company said it expects to begin phase iii trials in July.
Earlier this month, Moderna announced that it was working with the U.S. government to complete phase 1 human trials and will begin phase 2 trials with 600 participants. If the vaccine is found to be effective and safe, it could be available by early 2021, the company said.
The company says the vaccine is generally safe and well tolerated. The company said the most significant adverse events to date occurred in the 250-dose group, where three participants developed “tertiary systemic symptoms” after the second dose.
Stocks jumped on positive news from the covid-19 vaccine trial
Us stocks rallied strongly on Monday, rebounding from last week’s losses as news of a novel coronavirus vaccine trial sparked optimism about vaccines.
In early trading, the dow was up 800 points, or 3.4%. The standard & poor’s 500 index rose 3.0% and the nasdaq composite index rose 2.5%.
Moderna jumped nearly 40 percent at one point and 29 percent at the open of the U.S. market after it said the vaccine for covid-19, mrna-1273, was safe and well tolerated. Moderna is developing a covid-19 vaccine that has shown encouraging results in its early clinical trials. The mrna-1273 vaccine, developed using messenger RNA technology, is the most advanced vaccine in the United States. After two injections, all 45 participants developed antibodies to the coronavirus, the company said.
Shares of companies benefiting from the reopening of the economy also rose. Shares in Dsiney rose 6.3 per cent, while MGM Resorts rose 8.7 per cent. Cruise operator Carnival corp. gained 7.4%. Shares in Delta and United and American Airlines both rose more than 10 per cent.
Quincy Krosby, chief market strategist at prudential financial, said: “the focus going forward is going to be on the opening up of the economy, and how fast and how safely. That is why the “treatment and vaccine announcements will be important”.
Bank stocks rose broadly. Wells Fargo jumped more than 6 per cent, while Bank of America and Citigroup both rose nearly 5 per cent. JPMorgan Chase rose 3.9 per cent.
Comments from federal reserve chairman colin Powell also added to the optimism.
Speaking on CBS ’60 minutes, Mr Powell said there was “a lot more we can do” to help the economy. We have done what we can. But my point is that our ammunition is far from exhausted. “No, there is no limit to what we can do with these loan programs.”
Powell also said he has a “high degree of confidence” that the U.S. economy will recover from the current recession, but warned that it may not fully recover until a covid-19 vaccine is developed.
Last week, the nasdaq composite index fell 1.1% and the s&p 500 fell 2.2%, the latter recording its biggest weekly decline since march. The dow ended the week down 2.65 percent, its third weekly decline in four weeks and its worst week since April 3.
Until it becomes clear that the government’s efforts to revive the economy won’t lead to a big increase in covid-19 cases, the stock market is likely to wobble, senior Wall Street investors say. By the end of the week, most states had partially or completely ended their lockdowns.
The latest in a series of economic data, including record unemployment and a 16.4% drop in retail sales in April, shows how severe the government-imposed shutdown has been for the broader U.S. economy.
News of the covid-19 vaccine sparked a surge in U.S. stocks and gold was hit by profit-taking
Gold retreated on Monday, paring gains that had pushed the precious metal to its highest level since 2012, as news of a novel coronavirus vaccine’s tentative positive effects boosted U.S. stocks and sapped safe-haven demand for the precious metal.
In early trading, spot gold was down about $38 an ounce, hitting a fresh low of $1,726.79 an ounce.
“Gold fell on traders’ optimism following the latest news that the novel coronavirus vaccine test had tested positive,” Jim Wyckoff, senior analyst at Kitco.com, told MarketWatch.
Phase I clinical trials of a coronavirus vaccine from biotechnology company Moderna Inc. U.S. stocks jumped immediately on the news, which Wyckoff said “indicates increased risk appetite,” which is usually bad for safe-haven gold.
In early Asian trading, spot gold jumped as federal reserve chairman colin Powell said the U.S. economy could make a solid recovery in the second half of the year without a second wave of covid-19.
Powell says the fed has more ammunition to stimulate the U.S. economy if needed. He added that a vaccine is needed to get the economy fully back on its feet, which could take more than a year.
Japan, the world’s third-largest economy, slipped into recession in the first quarter, with gross domestic product contracting 3.4 percent during the period.
In response to gold’s rally earlier in the day, commerzbank analyst Eugen Weinberg said: “the market continues to speculate about negative interest rates in the United States and very low interest rates and cheap loans around the world. “In addition, concerns about the economic crisis are emerging due to very weak economic data in the United States and elsewhere.”
“The fed’s dovish comments and concerns about equities helped gold,” Carlo Alberto De Casa, chief economist at ActivTrades, said in a note.
“It is clear that investors are continuing to buy gold as insurance against a further correction in equities.”
Crude oil prices surged more than 12 per cent on the back of the cuts and the lifting of the embargo
Us WTI crude for June delivery jumped more than 12 per cent to a two-month high on Monday, a day before the contract expired, as production cuts and the easing of restrictions supported prices.
Paola Rodriguez Masiu, senior oil market analyst at Rystad Energy, said: “producers are slashing production and the market is slowly recovering as demand increases. “In the face of weak demand and unattractive low prices, the pace and extent of production cuts have exceeded initial expectations.”
U.S. WTI crude jumped 12.5 percent, or $3.67, to $33.10 a barrel. Brent crude, the international benchmark, rose 9.2 per cent to $35.49 a barrel.
The more actively traded WTI contract for July jumped 8 percent to $31.89 a barrel after the August contract rose 7.4 percent to $32.33.
Monday’s gains were in sharp contrast to just a month ago, when prices fell below zero the day before the contract for delivery expired in May, the first time in history that prices had fallen into negative territory. With much of the world still locked down, depots were filling up quickly and there were fears there was nowhere to store oil. Contract holders get into a mess and end up doing anything – in which case they are willing to pay someone to take the contract out of their hands.
Since then, demand has recovered and global suppliers have reduced production to support the market. Opec and its oil-producing Allies will cut output by 9.7m b/d from May 1, with Saudi Arabia, Kuwait and the united Arab emirates among those that have said they will voluntarily cut further. From June, Saudi Arabia, Opec’s DE facto leader, said it would cut output by an additional 1m b/d.
In the u.s., data released last week by the U.S. energy information administration showed U.S. oil production fell 1.5 million barrels a day in March from a record 13.1 million barrels a day. As states begin to reopen their economies, gasoline demand is showing signs of recovery.
Oil prices have risen for the third week in a row, but are still well below the peak reached in January, when WTI was trading above $60 a barrel.
Henning Gloystein of Eurasia Group points out that producers must continue to cut supplies until 2021 to maintain the upward trajectory of prices.
Some are less optimistic that the oil market will rebound. Paul Sankey of Mizuho said on Sunday that 2019 could be the peak year for oil demand. “The change in behaviour, in particular the continued decline in aircraft demand, was widely expected,” he said in a note to clients.
Us oil producer Whiting Petroleum was one of the oil companies to file for bankruptcy as producers struggled to make ends meet at depressed oil prices.
“With oil at around $30 and U.S. shale oil still under pressure, more companies are expected to file for bankruptcy as smaller companies struggle to pay down debt,” said Chris Midgley, an analyst at s&p global platts.