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The promising vaccine under testing by Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) also highlights some big issues around vaccine distribution.
The vaccine has to be stored at -70 degrees Celsius to remain viable. Most freezers don’t get that cold. So, vaccine distribution in this case presents a big logistical headache.
Larger hospital systems across the U.S. are rushing to buy these ultra-cold freezers for vaccine distribution.
About 20% of the hospitals that work with Vizient (one of the largest group purchasers for U.S. hospitals) have bought -80 C freezers. Vizient works with 60% of hospitals nationwide. That means about 10% of hospitals nationwide have purchased their own freezers.
However, these ultra-cold freezers are also ultra expensive, from $10,000 to $15,000 each. That means most rural hospitals can’t afford these freezers.
Nearly half of U.S. rural hospitals were operating at a loss in April of this year, according to the National Rural Health Association. And the pandemic has only further weakened hospitals’ finances.
This state of affairs risks shutting out large parts of our population from getting the vaccine.
People in those rural regions are precisely those who are most vulnerable to Covid-19. Think about it . . . hundreds of small towns all across the U.S. that have a higher percentage of elderly, low-income residents. A high percentage of these residents have multiple chronic health issues.
This is where the need for a Covid-19 vaccine is the greatest.
The best solution to this problem may lie in the ongoing development of other vaccines. Some of these vaccines can stored at higher temperatures.
That will be good. Because Covid-19 vaccine distribution is enough of a complex feat, even without ultra-cold freezers.
The Big News
New CDC Guidelines On Masks
The CDC has updated its mask guidance. It says that wearing one protects both you and the people around you. Masks block particles you exhale from spreading to others. Masks also help filter the air you’re breathing in. The CDC also says wearing masks can aid the economy. It cites an analysis that found that increasing universal mask wearing by 15% could prevent nationwide economic losses of up to $1 trillion.
Marijuana Stress Relief
Americans have been stressed out by both the pandemic and the election. So, they are looking for something to help relieve the stress. Many have turned to gummy bears, cookies, chocolates and gel capsules, all infused with a dose of cannabis. Exact nationwide sales information is hard to come by. But companies that specialize in edibles said sales soared in the weeks leading up to the election.
Coronavirus Surge Continues
Hospitals around the U.S. are being overwhelmed. On Wednesday, a record 65,368 people were in hospital with Covid-19. This marked the second day in a row and second time ever that the tally passed the 60,000 mark. More than 1,400 died on Wednesday. Cases per day are on the rise in 49 states, and deaths per day are climbing in 39 states.
China’s Shopping Record
The pandemic is changing shopping habits, even in China. Chinese consumers spent $74 billion during Singles’ Day on Alibaba’s online retail platforms. This made for a record-breaking campaign for the world’s biggest shopping festival. Covid-19 has led to “the rules of the game” changing much faster than anticipated. These shifts are having a major impact on shopping behavior. The digital “shelf” is becoming the primary shelf, if not the only shelf, in some Asia-Pacific markets.
New York Reimposes Some Restrictions
New York wants to avoid a repeat of what happened in the spring. So, Governor Andrew Cuomo has reimposed restrictions statewide. Beginning Friday, private indoor gatherings will be limited to 10 people (including in homes). And gyms, bars and restaurants must close nightly at 10 p.m. Restaurants can continue to provide takeout after 10, but only for food.
The Coronavirus Numbers
Here are the numbers from Thursday at 8 a.m. ET from Johns Hopkins University:
- 52,256,150 Infected Worldwide
- 1,286,543 Deaths
- 10,404,354 Infected in the U.S.
- 241,808 Deaths in the U.S.
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What’s Next
Pfizer’s announcement on its Covid-19 vaccine was hailed by Wall Street as a “game changer.”
Following the news on Monday, investors immediately dusted off the “reflation trade.”
Many had this strategy in place before the presidential election. But it had been put on hold after Democrats looked likely to fall short of a Senate majority.
But now, the prospect of a vaccine has once again shifted the outlook.
One key component of this shift will be market interest rates. How far up will traders push the yield on the U.S. 10-year Treasury?
You see, ultra-low bond yields have added to the appeal of growth stocks this year. The lower bond yields are, the more investors will be willing to pay for stocks with strong growth prospects.
Treasury yields will determine how long the rotation from growth stocks to value stocks will last.
In order for the rotation into value to continue, you need interest rates to go higher.
I have my doubts that rates will go much higher. Here’s why . . .
The Fed is unlikely to let Treasury yields rise significantly. The Fed cannot let it go too far because that would derail the economic recovery.
In other words, the rise in yield will only go as far as the Fed is willing to let it go.
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Yours in Health & Wealth,
Tony Daltorio