A Vaccine Could Cure Airlines

The most interesting correlation in the stock market right now is the one between (1) the prices of airline stocks and (2) the amount of antibodies produced by coronavirus vaccine candidates in clinical trials. So far the vaccines are experimental and uncertain. If you knew that they’d work really well—protect everyone perfectly, no side effects, easy to produce, etc.—then you’d know with a pretty high degree of certainty that airline stocks (and cruise ships, hotels, casinos, retailers, etc.) would go up. If you knew that they’d be a disaster then you’d probably be short airlines.

Meanwhile let’s say you knew with certainty that one public company’s vaccine candidate would work really well. Let’s say that company was Moderna Inc., the U.S. biotech company that has one of the leading candidates. Would you buy Moderna stock? Having a really good vaccine would probably be profitable for Moderna. But it would be tricky. It’s a high-profile situation and there will be huge pressure—from governments and maybe even shareholders—to distribute the vaccine widely and affordably. If you make a product that lots of people want, you can charge a lot of money for it and get rich; if you make a product that everyone needs, being too greedy with it might get you in trouble. A working vaccine would be good for Moderna, but it would not be an unmixed blessing.