What do the vaccines really mean for the markets, the global economy and humanity? Beaumont Capital Management recently crunched the numbers that will make the difference in the way we fight COVID-19 in the new year.
An excerpt of the longer research note follows. It's built for retail investor consumption, so if there's something here that can reassure your clients, I doubt Beaumont would mind the collaborative effort.
You can learn more now by reaching out to Beaumont via our VIP Messenger. And if you'd like to do a little more due diligence first, start the research process on the TAMP Dashboard.
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There remain some cold, hard facts. Even if the vaccine is given Emergency Use Authorization (EUA) shortly:
- According to Pfizer, they could produce up to 30-40 million doses by year end, but the vaccine requires 2 doses so that would mean 15-20 million potential recipients.
- They expect 2021 manufacturing to expand to up to 1.3 billion doses which would serve 650 million people.
- There are about 330 million Americans, so this year’s total capacity would only cover ~5-6% of the country. Assuming first responders get the first doses, the general public will have to wait until 2021.
- There are ~7.8 billion humans on Earth, so this year’s production, at best, would cover less than 1% of humanity. We cannot assume that the first 700 million doses will be reserved solely for the U.S. as Pfizer’s vaccine partner, BioNTech, is based in Germany.
- Making doses and distributing them are two different things. It takes a long time to administer 350 million doses of anything! This of course, assumes safety and the willingness of all to take the vaccine. Last I read, only about 50% of Americans are willing to take the vaccine…
- The Pfizer Vaccine must be transported and stored at -94° Fahrenheit. There are few trucks, hospitals and doctor’s offices that have this cold storage capability. While the vaccine will survive up to five days at warmer temperatures, this will significantly hinder the pace of administering the vaccine.
So what does it all mean? There is a lot of transient noise in the markets, and there appears to be a short-term search for leadership. This is one reason we cherish the rules-based systems we employ to steward our investments: emotion—however welcome—does not belong in the investment decision-making process. Lord willing, the pandemic will be over soon, yet we must be realistic about what soon means.
Perhaps, to quote Winston Churchill: “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
