S&P Futures Surge, Nasdaq Plunges On “Game-Changer” Moderna Covid Vaccine

Last night, when discussing the euphoric surge in Sunday markets, we said that the move is on expectations that the “Moderna covid vaccine may hit as early as tomorrow, and a favorable outcome would have a similar result to last Monday’s Pfizer surprise which sent the S&P as high as 3,668 before fading much of the losses.”

We were right because shortly after 6am, Moderna picked up exactly one week where Pfizer left off last Monday, when it announced that the Moderna’s Covid-19 vaccine was 94.5% effective in a preliminary analysis of a large late-stage clinical trial, or in other words even more effective than Pfizer’s vaccine which had shown 90% efficacy. Analysis from more than 30,000 volunteers showed the vaccine prevented virtually all symptomatic cases of Covid-19, while only five participants who received two doses of the vaccine became sick, compared with 90 coronavirus cases in participants who received a placebo. The vaccine also appeared to be effective in preventing the most serious infections. “That for me is a game-changer,” Moderna CEO Stephane Bancel said, noting in the last piece of good news that the Moderna vaccine was stable at refrigerator temperatures for 30 days, much longer than a previously estimated seven days.

The news sparked a buying frenzy not only in Moderna shares, which jumped over 10% to $100/share…

… but across market, and with the Emini already trading as much as 1% higher, it jumped to a session high of 3,637 on the MRNA news, which however was about 30 points below the intraday all time high hit last Monday in response to the Pfizer news.

And in a carbon copy of last Monday’s market reaction, as value stocks surged, tech and momentum tumbled, with Nasdaq plunging on the Moderna news after rising as much as 1% earlier in the session.

This prompted some – such as us – to ask if we are about to see another 15-sigma crash in momentum stocks, identical to what we observed last week.

And with 10Y yields doing the Pfizer tango one week later, as rates spiked 5bps to 0.93% – which again was a deja vu of what happened one week ago…

… gold and PMs tumbled as the dollar jumped and as markets priced in, however briefly, a return to normalcy.