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Summary
- On 09 November 2020, Pfizer and BioNTech provided an update on its vaccine candidate, BNT162b2 citing 90% efficiency on patients with no history of SARS-CoV-2 infection.
- Post the release, NASDAQ Composite Index and Nasdaq-100 Index dropped over 1%.
- Stocks of many big players from the technology sector dropped significantly due to massive sell-off.
- Experts believe that the market participants were optimistic about the encouraging update on COVID-19 vaccine. The vaccine update impacted various tech stocks that supported business during COVID-19 crisis.
The US achieved a significant milestone in the direction of COVID-19 vaccine when on 09 November 2020, Pfizer Inc. (NYSE:PFE) and BioNTech SE (Nasdaq:BNTX) announced that their mRNA-based vaccine candidate, BNT162b2 is 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection. The submission for Emergency Use Authorisation to the US FDA is expected to happen in the third week of November 2020.
Alex Azar, who is the US Secretary of Health and Human Service, cited that if Pfizer submits the positive initial data from its COVID-19 vaccine to health regulators quickly, the US government would start vaccinating the Americans in December 2020.
Why NASDAQ Composite Index dropped post Vaccine update
Post the release of this update, the NASDAQ Composite Index dropped 1.37% and settled at 11553.86 and Nasdaq-100 Index dropped by 1.7421% and settled at 11624.29 on 10 November 2020. On the other hand, indices like Dow Industrial and Russel 2000 have ended in the green zone up by 0.9% and 1.88% respectively.
Experts believe that the update related to COVID-19 vaccine had an adverse impact on various stocks which supported work from home services or companies that provided the facility to operate from any remote location. Many companies from the technology sectors reported massive sell-off of shares on Tuesday, 10 November 2020. The market players were optimistic on the encouraging update on COVID-19 vaccine candidate with Pfizer and BioNTech.
However, on 11 November 2020, NASDAQ Composite Index and Nasdaq-100 Index improved by 2.01% and 2.31% respectively. On the other hand, a marginal drop of 0.08% was seen in Dow Industrials. NASDAQ rebound reflects the attention of the market participants shifting back to the tech sector. Further, the signs of an imminent COVID-19 vaccine have raised hopes of faster economic recovery, which supported indices to bounce back from the initial drop.
Which Tech Giants rebounded post a Vaccine announcement-led drop
Amazon.com (NASDAQ:AMZN) witnessed a 3.46% drop on 10 November 2020 and settled at US$3035.02. On 11 November 2020, AMZN shares bounced back by 3.37% and settled at US$3137.39.
Amazon.com was amongst those companies which recorded significant YTD growth. The share grew massively during the pandemic period because of the online services provided by the Company.
Zoom Video Communications, Inc. (NASDAQ:ZM) experienced a 9.01% decline in its share price and settled at US$376.01. However, on 11 November 2020, Zoom shares surged up by 9.93% and settled at US$413.34.
The company reported massive growth in its share price during the pandemic period as most businesses were operating from a remote location and were using Zoom Video for the conferences or any other meetings. The business witnessed a huge demand for its product.
Teladoc Health, Inc (NASDAQ:TDOC) dropped by 3.11% and settled at US$172.44 on 10 November 2020. However, on 11 November 2020, Teladoc shares soared again by 5.86% to settle at US$182.55.
Headquartered in New York, Teladoc Health is a global leader in virtual care that provides virtual care solution related to telehealth, expert medical, and licensed platform services. The shares of Teladoc Health noted a drop in its share price after releasing its Q3 results on 28 October 2020. Although the Company reported 109% in its revenue to US$288.8 million YoY and total visits by 206%, still the net loss of the Company during Q3 was US$35.9 million, up from US$20.3 million in Q3 FY2019. Gross margin was also impacted during the quarter.
NVIDIA Corporation (NASDAQ:NVDA) was another stock that tumbled following the release of the COVID-19 vaccine update. On 10 November 2020, the shares slipped by 6.31% and settled at US$510.80. However, next day, NVDA shares zoomed up by 5.07% and settled at US$536.72.
Headquartered in Santa Clara, CA, NVIDIA Corporation business belongs to the PC gaming market. During the lockdown period, PC gaming garnered a huge demand with more and more people confined to their homes.
Other big technology companies whose shares plummeted post the vaccine update include:
- Facebook, Inc (NASDAQ:FB)- Shares plunged by 2.27% and settled at US$272.43 on 10 November 2020, but improved the next day on 11 November 2020 by 1.49%.
- Apple Inc (NASDAQ: AAPL)- Shares dipped marginally by 0.3% to US$115.97 on 10 November 2020 and improved by 3.04% on 11 November 2020.
- Microsoft (NASDAQ:MSFT)-Shares tumbled by 3.38% and settled at US$211.01. However, on 11 November, the shares bounced back by 2.63%.
- Tesla, Inc. (NASDAQ:TSLA): Shares dropped by 2.59% and closed at US$410.36 on 10 November 2020. On 11 November 2020, the shares improved by 1.65% and settled at US$417.13.
