Is the market going up or down? Health care is a good choice anyhow
The health care sector has long been characterized by stable and growing demand for its products and services, almost regardless of how the general economy has developed. We believe this trend will continue in the decades to come, and that the sector should be especially attractive for investors in the current environment.
As we pass the midway point for 2020 we can look back at a highly unusual six months for the world economy. Stock markets plummeted more than 30% during February and March, but have since recovered around 3/4 of that. Still, uncertainty remains high and the COVID-19 pandemic continues to spread. How are we doing in the fight against the virus? How close are we to a vaccine? And how can investors protect their investments in the current market? These are questions we will discuss in the following sections.
The number of COVID-19 infections continues to increase
As this is being written, the total number of confirmed COVID-19 infections worldwide has reached more than 10 million, equivalent to almost 1400 cases per million of the population. In certain areas of the world the numbers are even more alarming, take for instance the US where the infection rate is 6 times higher and the daily number of new cases is again increasing rapidly. Several months in to the fight against the virus, we have to conclude that the fight is far from over. Large parts of the global economy remain locked down, and for economies to be able to safely reopen, a vaccine or an effective treatment is needed in the fight against the infection.
Large parts of the global economy remain locked down, and for economies to be able to safely reopen, a vaccine or an effective treatment are needed in the fight against the infection.
So how close are we to having an effective treatment option?
According to the WHO(1), there are currently around 150 vaccines under development. These include candidates being developed by public biotech and pharmaceutical companies like Moderna, Johnson & Johnson, AstraZeneca, Pfizer, Sanofi and GlaxoSmithKline to mention a few of the more promising candidates. Vaccines typically take many years to develop, mainly because they have to be proven to be safe and to have the desired effect. However, with governments around the world pushing companies to develop a vaccine in record time, we can hope to have one ready much sooner. How soon is difficult to say, but many researchers are hopeful that a vaccine can be ready sometime early next year.
