Keeping up with COVID

As market narratives go, COVID-19 is huge. It is, in effect, a metanarrative that provides an overarching context for events across asset classes and sectors. We’re all thematic investors now, whether we like it or not. 

Recent announcements from Pfizer and Moderna regarding successful vaccines – and their impending approval and roll out – have changed the conversation around COVID and led to a repricing of risk and continued the positive momentum we have seen in equity markets following Biden’s victory in the US election.

But the fight against COVID is by no means over. In fact, significant challenges persist when it comes to successful rollout of these vaccines. Even if the regulatory environment is sympathetic and solutions are fast tracked, drugmakers and governments the world over face huge logistical challenges in scaling up production and distribution of their products. 

Bumps in the road

Vaccines need to be produced and transported in specific (and often extremely cold) conditions otherwise they can be rendered ineffective. Whilst Moderna's vaccine remains stable for up to 30 days at 36 to 46 degrees Fahrenheit (the same temperature of a standard home refrigerator), Pfizer’s vaccine requires a storage temperature of minus 94 degrees Fahrenheit, or -70 degrees Celsius. This poses a huge problem for governments hoping to vaccinate vast swathes of the population. 

Another challenge is finding enough trained healthcare professionals to administer the vaccines. It’s estimated that each worker performing vaccinations can only perform a maximum of six per hour, and they will also need to be trained to defrost, dilute and administer it. Workers must then return for a second dose of the vaccines at a later date. Many countries have nursing shortages that make this a herculean task.

Then there is the challenge of monitoring the administration of multiple different vaccines and ensuring coverage across relevant segments of the population. Testing for the virus hasn’t exactly been a smooth ride (especially here in the UK), so it seems reasonable to assume that large scale vaccination programmes are by no means a slam dunk. But this is something that governments can’t afford to mess up – the wellbeing of the populous (and the global economy) depend on a successful roll out.

The trust deficit

But perhaps the biggest challenges facing governments seeking to vaccinate their populations is the trust deficit. Many people are tired of the virus and the destructive impact it’s had on their lives, and they are skeptical about government interventions and the relentlessly bleak (and at times confusing) messaging that has come with them. Policymakers will have to work hard to gain the public trust and cooperation.

The anti-vaccine – or "anti-vax” – movement has been around for yonks. But COVID is perhaps the first pandemic to occur in a world that’s fixated by social media. The velocity of information – both true and false – is orders of magnitude higher than it was before the rise of Twitter, Facebook and other social platforms and this is making it much harder for governments and health organisations to control the narrative. 

The latest polling from YouGov suggests that a fifth of Brits are unlikely to take the vaccine – that’s a stunning figure, and one that could have serious implications for the fight against Coronavirus. This unprecedented level of distrust and disillusionment comes at a time when the stakes have never been higher for public health. We should expect an advertising bombardment from governments in the coming weeks, not so much gently “nudging” people into taking the vaccines, but shoulder barging us into the nearest doctor’s surgery.

Signal from noise

Enough doom and gloom. Progress is being made in the fight against Coronavirus, and vaccines are set to play a pivotal role in the resumption of “normal life” (whatever that means). The questions for traders and investors in financial markets is how to distinguish signal from noise when it comes to the COVID narrative? 

The pandemic will continue to drive market sentiment – not to mention price action in individual names – for months and possibly years to come. So it’s critical that practitioners devise robust ways to monitor, interpret and action newsflow and opinion around this theme. For all the great commentators on Twitter, including Helen Branswell, Jeremy Farrar, Kai Kupferschmidt, Ed Yong and Dr. Angela Rasmussen, there are also shocking levels of disinformation and downright lies. And telling truth from fiction isn’t always easy in our “post-truth” world.  

Step outside the bubble 

At EarlyBird, we’re ideally positioned to help. Our MiFID II compliant platform consistently carries market-moving news well in advance of traditional media, and our award winning NLP and Reputational Analysis surfaces critical tweets while filtering out noise. And we have just released a SmartTrack to enable our users to follow vaccine developments and their implications for markets. This includes:

  • New vaccine announcement, trial results, dates, effective rates and other key information.
  • Government orders for various countries and plans to roll out vaccines, including strategies for who gets vaccinated.
  • Impact on markets, on both micro and macro levels. 

By following this SmartTrack, users can look beyond the filter bubble of our friends and competitors – and the conspiracy theorists that hide behind avatars – to create our own way of processing and actioning these vast volumes of information.

Uncertainty and opportunity

COVID is not just a theme that’s driving financial markers. It’s the theme. 

Research teams at the world’s largest banks are spending huge amounts of time and resources seeking to understand the pandemic and how it will affect asset prices going forward. Indeed, JP Morgan, Barclays and Morgan Stanley and Goldman Sachs have all come out with notes in recent weeks.

Here at EarlyBird we believe we can help financial institutions large and small to access and process the vital information they need to make informed decisions – and advise their clients accordingly. It feels like our product is perfectly suited to helping markets professionals navigate the COVID narrative. And we are proud to serve them at a time of unprecedented uncertainty – and opportunity.

Posted on 11/24/2020 11:11:56 AMEarlyBird News