Nov 23 2020

Vaccine news again dominated the headlines this week, with updated news from both Pfizer and Moderna, then early on Monday 23rd November from AstraZeneca, too.

The US biotechnology company Moderna reported that its Covid-19 vaccine – known as Mrna-1273 – was 94.5% effective in a preliminary analysis of a large, late-stage clinical trial involving more than 30,000 volunteers. The data showed that the vaccine prevented virtually all symptomatic cases of the virus, with only 5 participants becoming ill after receiving two doses compared with 90 who received a placebo.

The vaccine also appeared to be effective in preventing the most serious Covid infections; there were no severe cases among people who received the vaccine, compared with 11 such cases in volunteers who received the placebo. The UK has subsequently ordered 5 million doses of the Moderna vaccine, on top of the 40 million Pfizer vaccine doses.

Also during last week, Pfizer reported that a final analysis of its trial data showed its vaccine to be 95% effective, improving on last week’s 90% reported efficacy. 170 trial participants contracted Covid overall, 8 of those had received the vaccine, while 162 received a placebo.

Pfizer has now requested emergency authorisation from the US Food and Drug Administration to distribute and administer their vaccine, which could take up to 3 weeks, with Moderna close to requesting the same authorisation, though their vaccine has not yet been manufactured in bulk. In the UK, British regulators started their assessment of the Pfizer vaccine on Friday 20th, with approval expected slightly sooner and the NHS primed to start administering the vaccine from next month.

Finally, early on Monday 23rd, AstraZeneca reported preliminary trial data that showed an overall efficacy rate for its vaccine – known as ChAdOx1 – of 70.4%. This figure was the combined result from two different dosing regimens: administering the vaccine in two full doses resulted in 62% effectiveness, whereas administering a half dose then a full dose resulted in 90% effectiveness. The study involved more than 24,000 volunteers and resulted in no serious cases or hospitalisations among those who received the vaccine.

The UK has ordered 100m doses of the vaccine which could arrive as soon as January and result in everyone being vaccinated by April 2021 according to the health secretary. AstraZeneca had already begun to mass-produce the vaccine before it had been proved effective in an attempt to compress the normally long timeline of production and had also committed to supply the vaccine ‘at cost’ under a no profit pledge to many developing nations.

The AstraZeneca vaccine has advantages over the Pfizer and Moderna alternatives when it comes to distribution; while the latter two must be stored frozen at very low temperatures, the Astra jab can be kept at refrigerator temperature, making it much easier to transport and store globally, particularly in lower and middle income countries. It also comes at a much lower cost due to the relatively simpler science underpinning it, with one dose expected to cost around £2.20 compared to around £15 per dose for the Pfizer vaccine.

As before with the other two vaccine candidates, the final trial data is yet to be released and may result in changes to the figures above, but at first glance is another major step forward.

Also last week, the UK reported another positive month for retail sales, with volumes rising by 1.2% month-on-month in October; the sixth successive month of growth. This left volumes 6.7% above February’s pre-pandemic level and points to resilience particularly in online sales. November will of course see a slowdown due to the 4-week lockdown, but as in March and April some consumer spending will be diverted away from ‘social consumption’ (restaurants and other leisure activities) to increased online spending:


In markets we saw a continuation of last week’s trends as those equity indices that have underperformed this year again rose strongly. Those worst affected areas of emerging markets made gains, particularly Latin America whose regional index rose by nearly 3% in Pound terms, buoyed additionally by stronger currencies, while the UK also performed well, with the FTSE 250 rising by 1.3%.

Asian and European equities rose modestly by 0.9% and 0.5%, but US equities underperformed, with the S&P 500 falling by 1.7% in Pound terms as investors rotated away into other regions more impacted by better growth prospects, and no progress was made on renewed fiscal stimulus. On this latter point, towards the end of the week the US Treasury Secretary demanded that the Federal Reserve return all unspent emergency funds by December 31st, effectively closing various emergency funding facilities as of that date and making it harder for them to restart should they be needed. This demand attracted strong condemnation from commentators and was seen to perhaps be part of the ongoing machinations resulting from the US Presidential election.

Government bonds enjoyed gains, rallying after sharp drops in prior weeks. UK Gilts and inflation-linked Gilts rose by 0.2% and 1.7% respectively, though precious metals dropped again despite another rally late in the week.

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