The knee-jerk optimism from the market on Moderna’s trial results may fade until solid evidence from trials is available. Short S&P 500?

  • Moderna Inc, based in Cambridge, Massachusetts announced encouraging interim results from ongoing phase 1 trial for its experimental coronavirus vaccine.
  • US stock markets added gains on Monday after a press release from Moderna raised optimism of a potential vaccine.
  • However, Moderna stocks stumbled the next day after a report by vaccine experts “poured cold water” on their trials. They questioned Moderna’s trial results which only disclosed 8 out of 45 subjects with the majority results being unknown.
  • Furthermore, Moderna has yet to publish its studies in scientific journals –though they might want to develop the vaccine first and delay disclosure of their findings to the public.
  • Lastly, the National Institute for Allergy and Infectious Disease, Moderna’s partner in developing the vaccine, declined to comment on Moderna’s findings, which is unusual for the institute.
  • Other reasons why US stock futures may start to weaken:
    1) Congress unlikely to pass new stimulus bill worth USD3 trillion that is proposed by the Democrats.
    2) US stocks are still super-expensive relative to earnings forecast according to Bloomberg.
    Breaking News: S&P 500 Stumbles as Moderna’s Trial Results Are Being Questioned3) US-China trade tensions will continue to escalate as Trump try to pin the blame on China for the pandemic.
  • SPX/USD could fall lower in weeks to come towards 2895 price level.

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Fullerton Markets Research Team

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