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The big unknown on the other side of a successful vaccine: Morning Brief

Sam Ro
·Managing Editor
·4 min read

Monday, October 12, 2020

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Will people take the vaccine when it becomes available?

"The vaccine represents a more important factor than the election result for the recovery in S&P 500 (^GSPC) fundamentals," Goldman Sachs' David Kostin said in a note to clients on Friday.

On Thursday, Goldman Sachs hosted biotech industry leaders for a discussion on COVID-19 vaccines.

“Their assessment of both vaccines and treatments remains optimistic,” Kostin noted. Among the key takeaways from the event: “Multiple vaccines are advancing in late-stage development based on encouraging initial data and one panelist estimated the vaccines have a 90%+ probability of success.”

We have yet to hear news about a successful COVID-19 vaccine. But for economic and financial market forecasters, it’s certainly not too early to consider what happens after a vaccine becomes available. And unfortunately, most agree that the availability of a vaccine is not necessarily an all-clear signal for things to go back to normal (or whatever normal may mean when the fear of getting infected recedes).

“The biggest challenge to vaccine uptake will not necessarily be cold-storage and distribution but rather convincing the broader population to get vaccinated,” Kostin cited as a takeaway from the event.

Vaccine uptake is something experts across Wall Street are struggling to model into their forecasts.

“The big unknown is how many people will be willing to take a successful vaccine,” Deutsche Bank analysts wrote in a research note early September. “Due to the speed at which vaccines are being developed, and the economic damage in the meantime, concern has been amplified. In particular, the political incentives for a vaccine have led many to worry that normal robust processes are being following.“

The matter of the vaccine and its development becoming politicized was on display Wednesday night during the vice presidential debate when candidate Kamala Harris said: “If the public health professionals, if Dr. [Anthony] Fauci, if the doctors tell us that we should take it, I’ll be the first in line to take it. Absolutely. But if Donald Trump tells us that we should take it. I’m not taking it.”

According to a Pew Research Center poll conducted in early September, 49% of U.S. adults said they would “definitely” or “probably” would not take a vaccine if it were available to them “today.”

“Concerns about side effects and uncertainty around the effectiveness of a vaccine are widely cited as reasons by those who would not get a COVID-19 vaccine if one were available today,” said Pew writers summarizing the findings. “Many Americans think it’s likely a vaccine will be used before its safety and effectiveness are fully understood.“

Broad uptake of a vaccine would be one of the ways we could see herd immunity, or as Johns Hopkins epidemiologists explain: "When most of a population is immune to an infectious disease, this provides indirect protection—or herd immunity (also called herd protection)—to those who are not immune to the disease." Herd immunity is a condition many believe will make people comfortable engaging in activity like they did before COVID-19 was a thing.

(The matter of whether the government could or would mandate a vaccine is yet another complicated matter, which my colleague Javier David explored in August.)

“There will remain many unanswered questions for a number of years,” JPMorgan’s John Normand wrote last month, pointing specifically to vaccine uptake and vaccine effectiveness.

And so, we’ll see. But it’s something investors should keep in mind if they plan on making tweaks to their portfolios once a vaccine is announced.

By Sam Ro, managing editor. Follow him at @SamRo

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