The previous market assumption was that nations with high vaccination rates would be able to return to a “normal” a set of regulations and enjoy much higher economic activity.
Israel is a small country with high Pfizer vaccination rates and, accordingly, had strong economic expectations. Several months ago Israeli health officials said the vaccine had 99 per cent efficacy in preventing symptoms of Covid-19 and 91.2 per cent effective rate in preventing infection from the Delta variant. These were wonderful figures.
Then earlier this month the Israeli ministry said the vaccine was 64 per cent effective in preventing infection and 93 per cent effective in preventing serious illness. The ministry did not detail its analysis and there was considerable doubt about whether which estimate was correct. Markets looked to a return to the higher figures.
Then [yesterday], figures presented to the Israeli coronavirus task force indicated that both disappointing numbers were actually too high. The Gertner Institute at Tel Aviv University, which studies epidemiology and health policy, began analysing the ministry’s data soon after its release. Although the researchers haven’t yet finished their final analysis, they say there is real cause for concern because the figures they are seeing are even lower. …
The bond market is not waiting around for the results and was particularly concerned at the call by Pfizer for booster shots, perhaps indicating their research was matching the Israelis. …
The 10-year benchmark yield [fell] to its lowest level in five months closing below 1.2 per cent. … Bond rates at that level indicate a clear fear of a significant US economic slowdown
Accordingly some bond analysts are lowering real GDP estimates again, which is not only driving bond yields lower but hitting economically sensitive stocks led by financials.
This first generation of covid vaccines are not the vaccines we have been waiting for. Word is now getting out that they are much less effective and are much more dangerous than other vaccines. Please, get on with the medical research to make better vaccines!
It would be nice if governments and big pharma were more forthcoming about the potential dangers of the vaccines. Saying little and not admitting the obvious just engenders mistrust.