- Wharton professor Jeremy Siegel told CNBC the arrival of a coronavirus vaccine is closer than markets think.
- “We may find ourselves with a workable vaccine for high risk individuals by the end of the fall, early winter,” he said on the news platform’s “Trading Nation.”
- “We’ve had almost no setbacks in the schedule developing the vaccine, and I think that’s where upside surprises can occur,” he added.
- His comments came as Moderna reported progress towards a workable vaccine this week.
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A coronavirus vaccine is closer than markets think, Wharton finance professor Jeremy Siegel told CNBC on Tuesday.
“We’ve had almost no setbacks in the schedule developing the vaccine, and I think that’s where upside surprises can occur,” Siegel said on CNBC’s Trading Nation.
“We may find ourselves with a workable vaccine for high risk individuals by the end of the fall, early winter.”
His comments came as Moderna reported progress towards a workable vaccine this week.
Moderna’s experimental coronavirus vaccine was found to be generally safe and generated immune-system responses with the capacity to protect people from the virus, according to data released from the first study of how the shot works in people.
“We think there is a good probability Moderna’s vaccine will work and get at least emergency use authorization in 2021,” Jefferies equity analyst Michael Yee said in a note.
“We think a viable vaccine can generate billions in sales, which we see as reasonable given there would be high demand over the first 1-2 years.”
Siegel, who regularly comments on the economy, called the market “pretty resilient” amid the pandemic and consequent stringent closing measures.
He said it would be important to observe the spike in new coronavirus cases in the US over the next two weeks and if those rates go down, it would be good for the “reopening stocks” in the market.
Both California and Florida have rolled back the reopening of their economies, driven by huge rises in new cases in recent days.
Siegel said that he predicts that the S&P 500 will be broadly at the same level it is now by the end of 2020.
“We could be at 3,200-3,300 by the end of the year because all of the liquidity the Fed has put in and the money they put in,” he said.
“A lot of it is still going to find its way into stocks, and we’re going to have good news on the vaccine front that I think will push the market higher.”
The S&P closed at 3,197 on Tuesday.
Siegel also noted that a victory for Joe Biden in November’s presidential election could lead to higher taxes, but also more government spending, which would ultimately push stocks higher.
“Democrats are poised to take the Senate and sweep the government,” he said, and suggested that meant “sharply higher taxes.”
“Has that completely been factored in? Probably not. A Democratic sweep does promise more support, more money for many projects. More liquidity. Basically, that’s going to be good for stocks, not good for bonds, not good for inflation. Inflation will be a surprise economic event for 2021.”
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