An effective vaccine has been touted as a magic bullet that will allow the world economy to resume quickly. However, there are reasons why recovery can be slow. The vaccine is usually not 100% effective and has a limited number of doses. Distribution can be an issue between and within countries. Even though these challenges are overcome, some people may choose not to get the vaccine.
Capital Economics’ group chief economist Neil Shearing wrote in a recent study note that if a vaccine is certified, there are a number of potential consequences for the economy. He said it was wrong to assume that the vaccine will change the economic outlook for next year.
“At one end of the spectrum there is a very effective vaccine that is produced and distributed quickly. On the other, there is a less effective vaccine that is facing significant production and distribution problems and is relatively in short supply in 2021,” he said. “In most of the scenarios in between, the containment measures, including social distancing and restrictions on some overseas travel, will remain in the near future.”
The first challenge is the vaccine itself. The World Health Organization (WHO) has said it prefers the vaccine to be at least 70% effective, but has set a minimum threshold for the Covid-19 vaccine at 50%. This means that everyone else who has been vaccinated may still be at risk of infection, preventing them from working or spending money.
Supply is another important factor. According to Shearing, developer figures show that 1 billion capacity will be available this year, and an additional 7 billion units could be deployed by 2021. However, this figure assumes several vaccines have been approved and the supply may be significantly lower. Special needles and syringes are required to administer the vaccine, but preparations are not sufficient in countries, including the United States. There is also a shortage of glass vials worldwide. The WHO does not expect widespread vaccination until mid-year next year, a spokesman said Friday.
Finally, many people are reluctant to get the vaccine. According to a survey commissioned by Deutsche Bank, only 61% of French say they plan to get the vaccine if the vaccine is certified within the next six months, while the same is true of 70-75% of Germans, Italians and Spanish. , British and American. In Europe, only half of the population agreed that “the vaccine is safe,” the bank said in a study note last week.
“From a global economy point of view, this problem is not as simple as with or without vaccines,” Shearing said.
Market Insight: Biotech and pharmaceutical stocks like Moderna soared this year with promises of potential vaccine development, partly out of the enthusiasm of retail investors. Traders who have been buying stock on platforms like Robinhood can be burned if the trial goes unsuccessful or if there is a distribution problem.
‘Mulan’ may have to conquer the world
The studios are hoping that international revenue can help sustain Hollywood, and the United States is struggling to regain its foothold after the chaotic coronavirus response.
With theatrical exhibitions in the United States now alive again, profits from other countries, especially China as well as Europe, are the industry’s most closely watched indicators.
After several delays, the studio unveils a live-action remake of the 1998 animated classic only through the new streaming service Disney + in the US on Friday. It will also open theaters in a handful of international markets.
The idea that blockbusters like “Mulan” will be released in theaters abroad outside the US was unthinkable just a few months ago. Aynne Kokas, associate professor at the University of Virginia and author of “Hollywood Made In China,” says these moves could be a “transformative” moment for Hollywood.
“The US is the world’s largest box office market. If COVID restrictions continue, we won’t be able to hold that title this year,” Cokas said. “If the US can go back to its previous situation, this could be a flickering or an inflection point.”
Chinese cinemas have already had some success after reopening, including the war epic “Eight hundred”. According to Box Office Mojo, the film has earned $275 million in China since its release last month, making it the third best performer this year.
Monday: US market closing
Tuesday: Slack and Lulu Lemon Imports
Wednesday: China inflation data; Canadian Bank Meeting GameStop Earnings
Thursday: First US unemployment claim; Chewy and Peloton revenue; European Central Bank Meeting
Friday: US inflation data; Krger income