Yesterday's 'rona rally proved that even a pandemic that's basically SARS on steroids and a suspected bioweapon unleashed on an unsuspecting global population can't keep this market down. Markets rallied sharply on Monday after the market's worst week of the year so far, but they rebounded Tuesday, then futures moved even higher on Wednesday thanks to reports in Chinese State Media that researchers had found a vaccine.
But just a few minutes ago, an interesting headline hit the tape that poured some cold water on the market's boundless optimism. A spokesperson for the WHO reportedly replied that there are 'no known effective therapeutics' for the virus after being asked about possible cures.
Researchers across the world are scrambling to develop a vaccine, but some experts and public health officials have cautioned that this could take up to a year to successfully develop and test.
Instead of erasing its gains, the market briefly turned lower, before the intraday dip was promptly bought.
This morning's risk-on sentiment was inspired by two reports earlier suggesting that a coronavirus treatment is near: Chinese media reported that Zhejiang University had found an effective remedy, though analysts noted that there have been similar unsubstantiated reports of late, with each being followed up by clarifications that the drugs had not yet been clinically tested, and it would take months before regulatory approval could be achieved.
Meanwhile in the UK, Sky News reported that the scientists leading the UK's research into a vaccine claimed a significant breakthrough by reducing a part of the normal development time from "two to three years to just 14 days." However, the scientist added that their test vaccine will be in animal models by the beginning of next week, and the next phase will be to move from early animal testing into the first human studies, which will still take "months" and likely be too late to help with the current outbreak. We wonder what time Zhejiang University will deny these reports?
So Dow gains 300 on an experimental vaccine starting tests in London...and loses 50 when WHO says 'there is no remedy'.
Of course, this claim by the WHO spokesperson contradicts media reports that two drugs, a flu treatment and a HIV remedy, are believed to effectively treat the Wuhan coronavirus-inspired pneumonia, but CNBC's Eunice Yoon reports that the WHO is more interested in a vaccine and other remedy made by Gilead.
Once again, trade optimism -> virus optimism. It really doesn't take much.