Play Ball!

Welcome sports fans!!!

This is a big week for Major League Baseball. With Opening Day(s) set for Thursday and Friday.  This is four months later than what was to be the earlier-than-ever Opening Day of March 26.  It will be a short season: just 60 games.

The rosters will be short: some players are sitting out the season and others who test COVID positive won’t be able to play.  Vendors will come up short: no fans.  Make sure you don’t come up short!   Be sure to stock up on hot dog rolls, ballpark franks, peanuts, popcorn and candy before the grocery store shelves are emptied!  Stay-at-home benefit?  No lines at the restrooms! 

Vaccine News!  Last week, the American and British teams we’ve been following this year each rounded second base (Phase 2 trials) and are on their way to third!  Moderna (Cambridge, MA / USA) and Oxford University / AstraZeneca (Cambridge / UK) are each moving forward with Phase 3, large scale clinical trials.

The Oxford/Astra shot:  As reported in Bloomberg BusinessWeek on July 15, Sarah Gilbert, the leader of the Oxford team, expects to confirm that the vaccine has an 80% probability of being effective in stopping people who are exposed to the novel coronavirus from developing Covid-19.  Their Phase 3 trials, currently underway, are expected to be complete in September.  According to the report, “It’s the most advanced vaccine anywhere.”

Although this means that the Brits may reach home plate first, it does not mean that we don’t need Moderna to also score a run, as well as many others making their way around the diamond.  As of July 13, there were 23 vaccine candidates in human clinical trials, according to the WHO.  Moderna expects to begin Phase 3 trials on July 27.

The US government has given $1.2 Billion to AstraZeneca to fund a 30,000-person trial in the U.S., starting in August. The money would also be used to ramp-up manufacturing capacity to secure at least 300 million doses for use here. The first doses could be ready in the fall should the vaccine prove effective. Note: The US has given Moderna $483 million and J&J $456 million.

Manufacturing?  Even with multiple teams scoring “runs” over the next several months, it is expected to take more than a year to produce and distribute the 7 billion vials needed to innoculate the world. It may be the biggest challenge in the history of the pharmaceutical industry.  Don’t dispose of your mask or change social distancing until well after you get your shot…2022?


What about football?  Similar news.  Training camps open for rookies tomorrow, and veterans a week later.  Plans for fans in stands remain in flux, and won’t be the same nationwide.

Stocks: Swing for the fences!?  Babe Ruth certainly did.  The “Sultan of Swat” held the all-time home run record for 39 years.  But did you know that he also held the all-time strike-out record for nearly 30 years?  Baseball is a great game, but swinging for the fences with too much of your money can be disastrous.  Keep that in mind as you look at the graph: 

Since our last letter that included a stock market update on June 9, six weeks ago, the S&P 500 has been essentially flat.  The same could be said for Moderna (MRNA) and AstraZeneca (AZN)…. that is until this past week when the Phase 2 data was released for both firms.

For perspective, this is like David and Goliath.  AZN is a giant British-Swedish multinational pharma company with roots dating back more than a hundred years.  They have many successful products currently in the marketplace.  Adolescent MRNA was formed in 2010, and has yet to bring a successful product to market. As of Friday July 17, AZN’s market cap was $155 Billion; MRNA’s was $35 Billion at a price of $94.85 per share.  Two weeks ago it was $23 Billion.  By the way, MRNA’s previous closing high was $80.00 on May 18. Six trading days later, it was $52.18…a loss of 35%. Thirty-six trading days later brings us to last Friday at $94.85…a gain of 82%.  Hello Babe!          

Note: MRNA will be added to the NASDAQ-100 Index today!

MRNA’s volatility is called “company risk”.  Many vaccine candidates historically fail to make it through all phases of trials.  Alternatively, if you had a portfolio of biopharma companies in a mutual fund, you would have “industry risk”.  Finally, if you had the entire S&P 500, you would have “market risk”.  Make sure you keep your perspective when you are up to bat.  Perhaps it’s better to just hit many singles instead of home runs!

Farewell Pat!  It is with mixed emotions that we announce the August retirement of Pat Gibb from our staff.  Pat conscientiously served our clients and staff for 11 years after she previously “retired” from Merck after a long career.  Her retirement is our loss but a well-deserved respite for Pat and her husband Jeff.  We all wish them good health through retirement with time to enjoy their many grandchildren.  

For the near term, newlywed Jordan Shaw will take over Pat’s duties of scheduling client appointments.  Jordan recently celebrated his second year with APS, but more importantly, the beginning of his married life with high-school sweetheart, Bonnie Jean. If you have been accustomed to contacting Pat as the gatekeeper for Dan or Mike, please direct your future contact to your CSR.

WorldWatch:  In a retreat from portions of the Green Phase guidelines, last week Gov. Wolf of Pennsylvania announced new rules again prohibiting indoor gatherings of more than 25 people that applied during the Yellow Phase.  Given the closed-open-closed uncertainties of scheduling our annual WorldWatch program and banquet at a local country club, we have decided to go virtual with some of our WorldWatch content in October and November.  We have rescheduled our banquet and guest speaker, Steve McClatchy for May 6, 2021.  Let’s all pray that we have several “ball teams” scoring safe and effective vaccines by then!

Sincerely,

Richard J. Volpe, CFP®, CLU®, ChFC®, AEP®

Founder and President

The information presented is not a recommendation by APS to buy, sell or hold any security, financial product or instrument discussed herein or to engage in any specific investment strategy. The content and material provided are for educational purposes only and are intended only for existing clients of Asset Planning Services, Ltd.  (APS).