Is a Covid-19 silver bullet almost ready to be fired? Judging by the frenzied rally in global stock markets on Monday, one might think so. News that the coronavirus vaccine developed by Pfizer and BioNTech is more than 90 per cent effective sent investors into a buying spree and the S&P 500 to a new high.

A vaccine is the best hope of reviving industries dependent on human contact. Shares in US cruise line Carnival and easyJet, a low-cost European airline, leapt by one-third. United Airlines rose by 18 per cent, while US video conferencing group Zoom fell around 12 per cent.

The excitement surrounding the US-German breakthrough is understandable. Since its outbreak in China late last year, coronavirus has killed more than 1.2m people. Some pundits had not expected an effective vaccine until the middle of next year “if ever”. The US Food and Drug Administration could approve this one before Christmas.

Still, caution is appropriate. Pfizer released few details. It is not known how well the vaccine works for groups such as the elderly. Drug developers are in an arms race with an evolving disease. Denmark has warned that mutated coronavirus found on its mink farms could stop vaccines from working well. There are logistical challenges too — such as the shortage of very cold storage.

Last, any vaccine must overcome public scepticism. Nearly half of American adults surveyed said they might not get a Covid-19 vaccination if one was available today, according to Pew Research Center.

On the plus side, only about 60 per cent of people might need to be vaccinated to reach herd immunity, says Deutsche Bank. That is a lower threshold than required for a less effective jab. The US, the EU, Canada, Japan, the UK, Australia and New Zealand have all pre-ordered enough doses to get at least some way towards herd immunity by early next year.

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If the researchers’ claim proves accurate, this is a victory for science and for economies that can now recover faster. It is also a validation for investors who have poured money into vaccine businesses whose own products may now have a better chance of success. Most of all, it extends the growing ability of humans to understand, counter and reduce the initially unquantifiable risks created by the pandemic.

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Via Financial Times