A Shot in the Arm: The Effect of COVID-19 Vaccine News on Financial and Commodity Markets

Abstract

We analyze the impact of vaccine news announcements by leading vaccine companies on the financial and commodity markets from January to December 2020. We show that the vaccine announcements moved stock prices of the leading vaccine companies, stock markets in the U.S. and Europe (but not in Asia and Australia), interest rates, transportation commodities (but not construction commodities), and foreign exchange markets with an especially strong impact on commodity currencies. We also show that important announcements about successful initiation and completion of the research and discovery stage, three phases of clinical development, regulatory approvals, and government funding and supply agreements moved the markets more than other vaccine announcements. The impact was stronger during the bear market (mainly from February through April 2020) than the bull market.