BioNTech (+20%) and Pfizer (+11%) have just announced that their vaccine candidate is over 90% effective (https://www.nytimes.com/2020/11/09/health/covid-vaccine-pfizer.html).
The markets are reacting largely with euphoria and hope for an early end to the pandemic. The Euro Stoxx 500 rises by 4% within half an hour, the S&P 500 by nearly 3%, the American small caps index Russell even rises almost 6% and triggers a trading halt due to excessive movements. An even rarer event when prices are rising. At the same time, the NASDAQ 100 fell by nearly 3% due to massive reallocation from the Corona winners, particularly in the tech sector, to Corona losers such as Lufthansa (+20%).
Such news is often a "sell-the-news" event. Market participants with strong capital particularly need liquidity to build up or reduce positions. Such news, which is surprising to the broad masses, brings massive liquidity into the market, which is then absorbed in the opposite direction by better-informed circles. The prerequisite for this is that the relevant information has already spread in a small circle and price discovery has partially anticipated it. The extent to which this applies in this case can hardly be answered, but will be reflected in the prices.
Ready for Better Investment Decisions?
Start your free trial today - stock analysis with artificial intelligence.
Full Transparency | Full Access | Cancel anytime
Significant weakness in the next 1-2 days and especially a closing price below Friday's close would be very concerning and would probably mark a so-called "blow-off top".
