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Futures Down as Investors Weigh Covid-19 Cases Against Vaccines

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Zacks Equity Research
·3 min read
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Pre-market futures are falling ahead of a new week of regular stock trading, with the Dow -300 points lower than Friday’s close, the Nasdaq -120 and S&P 500 -35. There are no big economic data points released this morning — and, after last week’s big reports on the U.S. labor market, relatively quiet from now through Friday — so we must look elsewhere for reasons why this selling may be happening.

This past Friday brought the U.S. its largest single-day amount of Covid-19 cases since the pandemic began in earnest back in March of last year: 310K in a single 24-hour period. Over the weekend these numbers have come down, but this might have to do with the number of tests given. The 7-day average is a whopping 243K per day — basically a quarter-million new infections each day in this country.

Fatalities from the disease, which are much less affected by weekend traffic figures, have also come down slightly from the all-time single-day high of over 4000 last Thursday, but just to 3177 yesterday. These are devastating numbers, with new mutations of the coronavirus proving to be much more contagious. We’re currently on a fast-track to half a million dead from Covid-19 in the U.S. before widespread vaccinations are finally widely distributed in the next couple months.

Speaking of the vaccines, 22 million doses have been distributed throughout the U.S. at this time, but fewer than a third have thus far been injected. President-elect Biden has advocated a policy whereby, instead of saving half the delivered doses for those who’ve already been injected for the second-half booster, the initial dose gets distributed to a wider array of Americans. This would thus make supply and delivery issues from vaccine producers Pfizer PFE and Moderna MRNA — among others, like AstraZeneca AZN in the UK — the next level of concern.

All Covid-19 vaccine tests thus far have been conducted in a two-injection process; former FDA Commissioner and current Pfizer board member Dr Scott Gottlieb recommends this vaccination policy be strictly followed. However, he is also in favor of the wider-distribution method, which would risk the prompt administration of the second dose while manufacturing and distribution is expected to keep pace. Gottlieb suggested that strict regulations on distribution — in order to eliminate “line-cutting” from those not designated to receive the vaccine first — is a main part of the problem in the current rate of injection.

Vaccine-related stocks are relatively flat a half-hour ahead of today’s opening bell. Pfizer shares are up 11% over the past six months, while Moderna has rocketed +57% over the same time period. AstraZeneca is still down more than 4% in six months, as it has worked through its testing anomalies and other headwinds. Johnson & Johnson JNJ, another major company working on a Covid-19 vaccine, is already up 10% in the past half-year ahead of its phase-3 trial results.


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