Wharton Professor Jeremy Siegel Believes Covid-19 Vaccine Will Be Here Soon
Wharton professor Jeremy Siegel believes a coronavirus vaccine is closer than financial markets are pricing in, according to Markets Insider.
"We've had almost no setbacks in the schedule developing the vaccine, and I think that's where upside surprises can occur," Siegel said. "We may find ourselves with a workable vaccine for high risk individuals by the end of the fall, early winter." Today, Moderna reported positive news regarding its coronavirus vaccine, stating that it was generally safe and generated an immune-system response with the potential to block the virus.
"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. "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." Yee believes that if the surge in cases starts to decline, it could bring a rally in reopening stocks.
California and Florida recently rolled back reopening phases as they attempt to curb a massive surge in coronavirus cases. Siegel believes the S&P 500 will be relatively flat for the rest of the year. "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."
Siegel also brought up the upcoming presidential election, stating that a victory for Joe Biden might come with an increase in taxes, but also an increase in government spending which would be good for stocks. "Democrats are poised to take the Senate and sweep the government," he said, which will lead to "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."