Bloomberg is making a case for the response to the vaccine euphorias being overdone. The heart of the thinking from Bloomberg was as follows:

  1. Traders are not trained immunologists and have not driven down into the detail of what the vaccine will mean in terms of how it is delivered. Initial results show that protection is achieved 7 days after the second dose. This second dose is needed to come three weeks after the first dose. In total the whole process takes 4 weeks. So, in the case of needing to be effectively vaccinated by year-end you need to start the process by December 03.
  2. On a positive note, a 90% base effectiveness rate is a very good sign for other vaccines which suggests there may be a range of other vaccine options in 2021.
  3. One tricky element is that the vaccine needs to be stored and transported at -70C. Pfizer hopes to apply to the FDA to start distributing later in November. They have around 50 million doses prepared this year (this is enough to treat 25 million because remember that you need two dos11-11-20es per person ). This means that the best-case scenario is for 25 million people vaccinated by year-end.
  4. Now consider that about 3.9 million people got the virus last week. if you then assume that this number of people gets the virus each week it will mean that by year-end there will be 29 million new cases. However, only 25 million people will be vaccinated. This means there will be a net growth of 4 million cases.

It is important to remember that the vaccine process will take time and that therefore a correction lower in US stocks would make sense heading into the end of the year.