When I recently wrote about how fear of the unknown can have a negative impact on investors, I was totally unprepared for the fear-turned-panic that the financial markets would be subjected to only a day or two later.
There is no question that the Coronavirus, or COVD-19 as it is referred to, is serious and could have long-lasting effects on the global economy, from which we would not be immune. Nonetheless, Wall Street's unadulterated panic was without reason.
There will be lingering effects on some companies’ earnings. Others like Clorox (CLX), Kimberly Clark (KMB) and Procter & Gamble (PG), all will benefit due to their product offerings.
However, short-term, nothing has occurred in the past couple of days that has affected the day-to-day operations or had an impact on financials. Share prices, yes. Future projections, possibly, but not yet determinable.
Dick Grasso, former chairman and CEO of the New York Stock Exchange, put it well when he said investors should stay focused on their long-term objectives and not get shaken out of their holdings by short-term dislocations.
However, human emotions are often overriding, and fear of the unknown can be a deterrent to logical thinking. The result is an instinctive need to invent a narrative that makes sense out of it all. So we invest time and energy in creating and telling ourselves stories that are probably not entirely true and are often limiting.
You need to keep your faith in your decision-making ability. Find something you can hold onto in the face of uncertainty. Trust your judgment. And above all, do not panic.
Meanwhile, the pharmaceutical company Moderna has shipped the first batch of its rapidly developed coronavirus vaccine to the National Institute of Allergy and Infectious Diseases in Bethesda, Maryland, which will launch the first human tests of whether the experimental shot could help suppress the epidemic originating in China.
The Institute expects by the end of April to start a clinical trial of about 20 to 25 healthy volunteers, testing whether two doses of the shot are safe and induce an immune response likely to protect against infection, NIAID Director Anthony Fauci said in an interview. Initial results could become available in July or August.
Moderna's turnaround time in producing the first batch of the vaccine, co-designed with NIAID after learning the new virus's genetic sequence in January, is a stunningly fast response to an emerging outbreak.
If a trial starts as planned in April, it would be about three months from vaccine design to human testing. In comparison, after an outbreak of an older coronavirus, severe acute respiratory syndrome, in China in 2002, it took about 20 months for NIAID to get a vaccine to the first stage of human testing.
Also, it is possible the spread of coronavirus could lessen during warmer months but then return next winter and become a seasonal virus like the flu, making a vaccine useful even if it isn't ready for widespread distribution until next year.
On a therapeutic front, Gilead Sciences (GILD) saw its shares rise after a senior World Health Organization official said the company's experimental drug may be the best bet to find a treatment for the new coronavirus spreading around the globe.
Gilead's compound, Remdesivir, has been rushed into a clinical trial in China, where the illness has infected tens of thousands of people. WHO officials have said results could be available within weeks. Gilead expects results from two trials in China in April.
Remdesivir is the "one drug right now that we think may have efficacy," Bruce Aylward, an assistant director-general at the World Health Organization, said at a briefing in Beijing. WHO officials and international scientists are in the country assessing the outbreak.
Gilead shares recently closed at $74.70, the highest closing level since October 2018.
The rising price of Gilead's shares in February have added more than $12 billion to the company's market value. However, before you start placing buy orders, that increase in market value far outstrips the sales gains the company is likely to reap from the drug.
Lauren Rudd is a financial writer and columnist.
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March 02, 2020 at 12:25PM
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Streetwise: Despite slide, try not to panic - Business - The Ledger
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