Pfizer and BioNTech reported that their coronavirus vaccine showed a 90% efficacy rate in preventing infections. The news about a potential vaccine is breaking the internet and creating a massive shift in the global economy. Investors are hopeful that the vaccine will help revive the economy after months of uncertainty surrounding the pandemic. In other terms, the vaccine is giving people hope that there will be no more stay-at-home policies. As a result, the stocks for companies that were facilitating lockdowns are falling.
One such company is Zoom, which became an indispensable tool for people forced to stay home. It helped people adjust to remote work, socialize and feel like part of a greater community. The Verge even called it “the hottest videoconferencing service of the pandemic”, but what happens when the pandemic comes to an end? Zoom’s stocks have fallen by 18% and the company along with other stay-at-home tech appears to be falling out of favor. Peloton’s dropped by 20%, while Amazon’s stock dropped by 5% and, Netflix’s dropped by 8.6%.
Investors are optimistic about the vaccine trial and are betting on businesses that would profit from the end of the pandemic. Shares are soaring for the sectors most linked to growth in the broad economy, like energy and banks, and the companies. These are also the companies that suffered the most as a result of the lockdown.
However, there are reasons to be weary, since even if Pfizer wins approval for its vaccine it will only be available to a tiny fraction of the global population. The New York Times also reminded its readers that while investors are heavily betting on companies that profit from the end of the pandemic, the number of coronavirus infections are still rising. “These are the types of moves that tend to run out of gas if the underlying data doesn’t quickly confirm the enthusiasm,” Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, told The Times.
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