Fortunately our Messiah ScoMo is copying the Trump style of get it done.
The coming vaccine
20/03/2020.
Thursday was a significant day for the financial markets. Firstly, President Donald Trump addressed the US and revealed that an initiative was underway to fast track not only a vaccine for Covid-19, but also retroviral drugs to treat those infected with chronic conditions.
On Wednesday the Trump Administration enacted law in the Defence Act, which grants Washington “war time” powers to requisition US industry to manufacture what it needs to fight Covid-19. We have collectively listened (and been frightened by) medical professionals telling us that a vaccine is 12 to 18 months away. I think we should be listening to what the US Government has to say about what it’s doing about vaccines and developing retroviral drugs.
Under the Defence Act, the Trump Administration is now empowered to mobilize not just the pharmaceutical industry to develop combative drugs but also telling the FDA (US Food and Drug Administration) to fast track the release of new drugs and a vaccine. Donald Trump specifically mentioned this, and that the US would go through a “v shape recovery” in a press conference at the White House on Thursday.
The second “game changer” was announced by UK Prime Minister Boris Johnson, who confirmed that the Britain would soon have a new “fast test” for the virus, capable of checking hundreds of thousands of people. This will not only allow countries to get on top of Covid-19 faster, but get the global economy up and running sooner.
The S&P500 reacted mildly to Donald Trump’s press conference, and particularly to his comments on the development of a vaccine. I think the confidence is going to return though once markets digest the prospects of a vaccine and “shortening” the down time for the US and global economies.
A vaccine and antiviral drug treatments are close if the Trump Administration is to be believed. I believe the claim for one simple reason. It is an easier and far cheaper option for the US Government to mobilise the considerable resources commanded by the pharmaceutical sector and the FDA to deliver a vaccine and drug treatments quickly, than having the US and global economy shut down and close indefinitely. These initiatives will also ease global fears and panic around the health threats of the virus but also the financial implications to the economy.
The markets have not been comforted by the fiscal and monetary stimulus throughout this crisis, but a fast-tracked cure in the form of retroviral drugs and a vaccine will be hard to ignore.
If the US can put a man on the moon in 1969, create a cocktail of retroviral drugs in the late 1980s that effectively cured HIV (and this was a disease that really scared the world), created the internet in the 1990s that changed the world, then what will stop the world’s largest economy mobilising its pharmaceutical industry and its own FDA authority from producing a cure in a record amount of time?
I don’t think anything can now stop this “freight train” of unilateral effort as outlined by Donald Trump this morning. Trump has behind him now - total bipartisan support from the Democrats, Corporate America, the public, the global medical profession …and now also the FDA! Markets were slow to respond to this initiative, but I believe it is only a matter of time.
This is not just about the Trump Administration trying to secure a second term. This is about US and the world avoiding what some commentators have referenced “as a coming depression”. I’m not discounting the risks, and markets have already done this, but I am also not going to underestimate the determination of governments to avoid this outcome at all costs.
