Economists expect the vaccine to return the world to normal in the summer of 2021
Yesterday, the American biotechnology company Moderna reported that its vaccine effectiveness is 94%. At the same time, the company has already asked the FDA for emergency approval of the vaccine so that it can distribute the first doses by the end of this year. Two more companies are asking regulators to use the vaccine. In general, the US investment bank Goldman Sachs looked at the distribution and vaccines and the rate at which the vaccines get among the population.
The first doses by the end of the year
The vaccine, which would end the nearly year-long covid-19 pandemic, seems to be approaching fast. The American pharmaceutical giant Pfizer and its German partner BioNTech said today that they had applied to the European Medicines Agency for a conditional decision to register their coronavirus vaccine. If companies do receive confirmation, the vaccine can be used in Europe by the end of the year. Conditional validation is in the best interest of global public health and attention will be paid to the immediate benefits, which outweigh the risk of less complex data that is normally required. The effectiveness of the Pfizer vaccine is 95%, and it appears that the companies have already started supplying themselves so that they can dispense doses immediately after approval. The vaccine is given in two doses and the price should be around $ 20 per dose.
A similar announcement was made yesterday by US company Moderna, which applied for emergency approval of the vaccine from the US FDA and the European Medicines Agency after data has shown that the vaccine was safe and 94% successful in preventing covid-19. But when will the normal world of advanced economies, as we used to know, will really return? When we will hear again about the gradual tightening of monetary and fiscal policy when monitoring the economic data from financial markets?
Normal summer of 2021
According to an analysis by Goldman Sachs, up to 70% of people in developed countries could be vaccinated by the autumn of 2021. The first doses of the vaccine should then be delivered to the most at-risk groups in the United States by the end of that month. The FDA will hold an extraordinary meeting on December 10, when the vaccines could be approved. Even in Europe, vaccines could be approved by the end of this year. Economists from the United Kingdom then expect that 50% of the country's population will be vaccinated by March. The rest of the EU, Japan, and Australia could reach similar levels in May. We can thus expect a gradual return to normal life as early as the summer of 2021, although there are possible risks that can significantly slow down the whole process, or even undo some strict restrictions.
Another pharmaceutical companies need more time
Unlike Pfizer and Moderna, European AstraZeneca or Johnson & Johnson use a weaker version of coronavirus for their vaccines. If their vaccines fail, it can lead to weaker demand for the vaccine and slower immunization of the population. Representatives from Oxford University have already indicated that the AstraZeneca vaccine needs some time to be approved to ensure that the vaccine is safe.
So if we are waiting for some correction in the stock markets from current record values, then the only chance is until the end of this year and possibly during the "flu season", which awaits Europe and part of the United States early next year. After that, the markets will gradually incorporate the main economic data and the Fed, together with other central banks, will look forward to a gradual tightening of monetary policy. At that moment, the markets will start to expect something different than what is happening now and it will be time for a change. However, the results for 4Q 2020 will show very well how companies coped with the second wave of the pandemic which might leave us positively surprised.
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