Tesla CEO Elon Musk has warned you.
In May, when the electric car’s stock was less than half its current value (adjusted for the split), Musk tweeted that his company was overvalued. Investors finally shared that view on Tuesday when the stock fell 21%, the worst drop in history since the S&P Dow Jones indices stopped Tesla TSLA.
-21.06%
to the S&P 500 index.
Since September 2, the worst members of the Nasdaq-100 have been Tesla, the electronic signature provider of DocuSign DOCU.
-4.91%,
semiconductor manufacturing company KLA KLAC,
-9.77%,
Zoom Video Communications ZM,
-5.13%,
and computer games company Nvidia NVDA,
-5.62%
– All, except for the UAC, this year have risen in price at least twice.
While the timing may have been unexpected, the actual drop can be explained as an adjustment for irrational exuberance, particularly for the tech sector.
Read also: Best of luck, stocks have performed well after similar Nasdaq adjustments.
But one of the reasons for the bump in the market, at least until September, was the work of several companies on a coronavirus vaccine. Evercore ISI held a teleconference on this topic and the findings were sobering.
Speaking to the news that AstraZeneca has suspended COVID-19 trials due to illness, analyst Josh Shimmer noted that for most vaccines, pharmaceutical companies agree to lower levels of immunity in exchange for better tolerance. Now, he says, companies are promoting the protective profile for maximum effect, knowing that it could have more side effects. In his opinion, the likelihood that the first vaccines will work well is greater than 50/50, which he defined as a 90% reduction in event rates or a significant benefit in severe cases.
AstraZeneca AZN,
-1.39%,
along with vaccines created by Pfizer PFE,
-1.18%
/ BioNTech BNTX,
+ 2.15%
cooperation with Moderna MRNA,
-13.19%,
were considered the most likely to complete the final stage of the trial by October. Novawax NVAX,
-8.20%
The vaccine, which many investors consider their favorite, is expected to complete phase 3 in December, according to Schimmer.
But the next most likely scenario is that they work, but not very well, as a flu vaccine, in which case the impact on mitigating the pandemic will be limited. “I don’t know if the COVID vaccine will quickly get us out of this mess with a 60% effectiveness,” he said. (Minimum efficiency 50%.). In this scenario, the hope is that the second wave of vaccines will work better, “swap out vaccinated horses halfway if better ones come out.”
He added that the likelihood that vaccines do not work, worsen the infection, or have problematic side effects is less likely.
More positively, analyst Vijay Kumar said the recently approved rapid antigen tests at the point of care will be helpful in rebuilding the economy and alleviating testing restrictions. He said that by the first half of next year, anyone will be able to get tested.
Buzz
AstraZeneca AZN,
+ 2.10%
said it “voluntarily suspend vaccinations to allow an independent committee to review the safety data, “And called the pause” routine. ” The New York Times reported that a volunteer in a UK trial was diagnosed with transverse myelitis, an inflammatory syndrome that affects the spinal cord and is often caused by viral infections.
LVMH Moet Hennessy MC,
-1.10%
said it would not be able to complete the previously announced $ 16.2 billion takeover of Tiffany TIF,
+ 0.01%…
which led to a sharp decline in the US luxury retailer’s premarket inventory and prompted a lawsuit to enforce the deal.
Weak WORK,
+ 0.86%
there may be pressure after office communications software maker exceeded analysts’ expectations in terms of revenue and prospectsbut not as much as Zoom Video Communications.
Sportswear manufacturer Lululemon Athletica LULU,
-3.21%
reported above-forecast profit and loss.
This is a pretty calm day for the economy, as evidenced by the Bank of Canada’s interest rate decision and job vacancies in the US.
Former Vice President Joe Biden has proposed a new tax penalty for offshoring, as well as a proposal to double the minimum tax on foreign income.
Score
After the 4.1% crash for the Nasdaq Composite COMP,
-4.11%
and a 2.8% drop for the S&P 500, ES00 futures share,
+ 0.92%
pointed to a more optimistic start, especially for the Nasdaq-100 NQ00,
+ 1.69%…
Crude oil CL.1,
+ 1.87%
futures rose and gold fell.
Yield on 10-year Treasury bonds TMUBMUSD10Y,
0.691%
rose to 0.69%.
Schedule
Citi reports that the decline in social distancing in the global economy has continued for two weeks since late August. Global mobility improved to -14.4% from -16.5% and to -17.4% in the US after a two-month fluctuation of around -19%.
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