What a difference a vaccine makes

Vaccine injection

The announcement that a vaccine might be available before the end of the month that works and is safe changed everything – and nothing. 

The optimists in markets decided that the news would be confirmed and get better. They think the vaccine they will complete its trials, it will pass its safety test – and the regulators will wave it through into use many months short of the normal trial periods. It would, they hope, be followed by one or two more vaccines that could similarly be fast tracked, as if one company can find a way to stop the disease so surely must others be able to do the same.

If you think forward to a time when most people who want to be are inoculated, and when Covid-19 has gone away – or is well under control for want of more people to infect – you can sketch a return to normal in a wide range of areas. People will fly on holiday again, tourism and hospitality will flourish, and maybe more business will be done face-to-face after all.

Shares and sectors which have been badly damaged by the current absence of customers, the shortage of turnover and the outright bans on opening should bounce substantially as investors see they will return to better turnover, cashflow and profitability after the crowds return to use them. This is why the shares of wounded companies bounced so much.

In the shorter term, however, nothing has changed. We await the successful completion of trials – and await the difficult decision of the regulators as to whether there has been sufficient proof of the safety and efficacy of this product. All may go well on these fronts, as there is huge establishment pressure for this to work. There remain substantial manufacturing and logistics issues with producing and delivering this vaccine to enough people to allow full relaxation of social-distancing and business controls.

Logistical issues

The vaccine needs to be kept at much lower temperatures than normal surgery fridges and will require special transport and storage. The whole world wants this vaccine so each individual country will be rationed. In the first instance, the vaccine will probably be used for the most vulnerable and for health workers – and will not be available for the majority. This will make governments cautious about sounding the all-clear and will leave us still fighting the virus for the months ahead through the current chosen methods of reducing social contacts and enforcing various lockdowns. The addition of other vaccines on the approved list would help speed the transition.

Nor is it guaranteed that we will pass effortlessly and easily back to the old normal in many areas. Online shopping will keep some of its accelerated gains, and High Street chains weakened by periods of closure for the pandemic will cut stores or go out of business more rapidly. There will be some return to the office, but more homeworking is likely to become entrenched now people have worked out how to do it and see that it brings them welcome flexibilities.

View Full Article – published by Charles Stanley on 11th November 2020