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.
3) 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.
Fullerton Markets Research Team
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