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John Hammond: “How do you find yourself enlightened by a discovery and not act?”

Quote taken from “Jurassic Park”, a 1993 movie directed by Steven Spielberg.

What is the “discovery” that is enlightening the world today? It certainly is the Covid-19 vaccine. Although, perhaps it may be better speaking of “discoveries” since more and more vaccine candidates are heading towards the final validation by the competent health authorities. Such news has been positively welcomed by the markets, which detect the possibility of defeating this virus and, therefore, of halting its harsh economic impact.

On Monday morning, the Anglo-Swedish pharmaceutical group AstraZeneca announced that the most recent analysis showed that its vaccine against the coronavirus, developed together with Oxford and with the Italian company Advent-IRBM, has an average efficacy of 70%, reaching the 90% in efficacy if it is given in two tranches: a half dose is given first and then a full dose later, as a booster.

The announcement came after that American group Pfizer last week illustrated the results of its potential vaccine, which was claimed to be 95% effective. The data presented by the company, which developed the product partnering with BioNTech, showed the ability to prevent both mild and severe forms of Covid-19.

Along with Pfizer and AstraZeneca, we find Modern. The US group recently said that its vaccine candidate, after the third phase of testing on 30,000 volunteers, showed an efficacy of 94.5%.

In short, while not forgetting that final authorizations are still lacking, the discovery of potentially effective vaccines is illuminating the world and the markets. So, as John Hammond says, how do you “not act?” Indeed, governments around the world are taking action, preparing to store and distribute vaccines in their respective countries.

Once the final green light is received “ours will be the world’s vaccine. We will produce and distribute 3 billion doses in the first three months of 2021”, said Pascal Soriot, CEO of AstraZeneca. Moderna instead aims to reach 1 billion, while the pair Pfizer-BioNTech spoke of a 1.3 billion capacity.

Christine Lagarde, president of the European Central Bank, spoke on the subject last week during a summit of the World Economic Forum: “We were on the bank of a river characterized by uncertainty and great difficulties from both health and economic perspectives; we could not even see the other shore. But thanks to the great work done by some companies in Germany, in the US and in other parts of the world, we can now see the other side of the river because we know that the vaccine is on the horizon ». However, she also warned that “there is still a long way to go”, which is why it is of fundamental importance to make the most of the various initiatives to revive the economy, including but not limited to the Recovery Fund.

Moving on to the macro-economic front, in the Eurozone, the composite SME index for November stood at 45.1, down from 50 in October (while forecasts were 47.1). The data relating to manufacturing was 53.6 points (from 54.8 in the previous month, with consensus equal to 53.8), while data relating to services stood at 41.3 (from 46.9 in October and against an estimate of 44).

In November, according to Chris Williamson, the chief business economist of Ihs Markit, “the Eurozone economy is back in sharp decline due to continued efforts to suppress the growing wave of Covid-19 infections”. The latest data, therefore, suggest a greater probability of GDP contraction in the euro area during the fourth quarter, with the services sector particularly affected. Williamson, however, stressed that “good news is coming from the manufacturing sector, with German manufacturing companies which, thanks to the new increase in demand, are continuing to show particularly high resilience”.

Another positive news, again in the macro field, came from the United States. In November, the manufacturing PMI index rose to 56.7 points from 53.0 in the preliminary estimate and from 53.4 in the previous month. This is the highest growth since September 2014, with a result that is consolidating above 50, which denotes the expansion of the business. A comforting increase was also recorded in the services sector, with the relative index rising to 57.7 points from the previous 56.9, exceeding the consensus estimates of 55.

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