A Shot in the Arm: The Effect of COVID-19 Vaccine News on Financial and Commodity Markets

Kucher, Oleg; Kurov, Alexander; Wolfe, Marketa Halova

doi:10.2139/ssrn.3852364

Cited by 7 publications

(9 citation statements)

References 27 publications

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“…Regarding the impact of COVID-19 vaccinations on the forex market, the results listed in Table 4 exhibit strong correlations for all the studied countries, especially in Europe, where the dynamic correlations are very high. This finding confirms previous conclusions regarding the strong impact of the COVID-19 vaccine's development on most developed and emerging markets (Vierlboeck and Nilchiani, 2021;Hartono, 2021;Kucher et al, 2021;Chan et al, 2021). Our results also corroborate the findings of the few existing articles regarding the study of the COVID-19 vaccination campaign on financial markets.…”

supporting

confidence: 92%

COVID-19 impacts on financial markets: Takeaways from the third wave

Bouhali¹,

Dahbani

Dinar³

2021

RUJEC

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This study provides an updated analysis of the impact of COVID-19 daily contaminations and vaccinations on the financial markets by incorporating the third wave observed in 2021. Our methodology is based on a comparative approach using a multivariate heteroscedasticity model and data from the Eurozone and ten other countries from different economies. Our results show that COVID-19 contaminations and vaccinations strongly affected most of the countries in our sample (except for the UK, Russia and India in the case of COVID-19 contaminations). We also found that optimistic market sentiment concerning the evolution of the pandemic prevailed among the countries forming our sample (except for Switzerland, Russia and India).

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supporting

confidence: 92%

COVID-19 impacts on financial markets: Takeaways from the third wave

Bouhali¹,

Dahbani

Dinar³

2021

RUJEC

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“…The announcement of a successful phase 3 trial of Pfizer vaccine on November 9 marks a major milestone in the fight to control the pandemic. Previous literature on the impact of vaccine development [13][14][15] has focused on the aggregate market level, and not at the sectoral level. In this study, the effect of the Pfizer vaccine announcement on S&P 500 11 sectors and a total of 79 subsectors is analysed.…”

Section: Conclusion and Policy Recommendationsmentioning

confidence: 99%

“…This requires an in-depth analysis at both sector and subsector levels to examine the variation in the impact of the news on share prices. However, the focus of existing literature on the impact of vaccine development [13][14][15] is on the aggregate market level, not on subsector impact.…”

Section: Introductionmentioning

confidence: 99%

Winners and losers from Pfizer and Biontech’s vaccine announcement: Evidence from S&P 500 (Sub)sector indices

2022

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This study explores how the US stock market reacted to the news of a successful development of vaccine by Pfizer and Biontech on November 9, 2020. In particular, the study analyses the effect of the vaccine announcement on 11 sector indices and 79 subsector indices. A key contribution of the present study is to provide a deeper subsector level of analysis lacking in existing literature. An event study approach is applied in identifying abnormal returns due to the November 9th vaccine announcement. Several event periods (-1, 0, 1, 2, 3, 0-1, 0-3) are analysed to provide a more complete picture of the effects. Based on analysis, it is established that there are considerable inter and intra sectoral variations in the impact of the vaccine news. The results show that the impact follows a clear pattern. The sectors that were hit hardest by the pandemic such as energy, financials, as well as subsectors like hotels and casinos, benefited the most from positive vaccine news. Subsectors that gained from the pandemic such as airfreight, household appliances and computers and electronics retail were depressed the most by the news. These findings suggest that while the availability of vaccines is expected to help steer economies gradually to normalcy, the re-adjustment is likely to be asymmetric across subsectors. While some subsectors expect to expand as these industries recover from the contraction inflicted by the COVID-19 environment, other subsectors expect adjustment losses as these industries shed off the above average gains driven by the COVID-19 environment.

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“…The reaction of financial and commodity markets to announcements about vaccine development is explored by Kucher et al (2021). In this regard, the Johnson and Johnson, Moderna, Oxford-AstraZeneca, and Pfizer-BioNTech vaccines (among the approved vaccines in the European Union, United Kingdom, and the United States) are considered.…”

Section: Vaccines and Financial Marketsmentioning

confidence: 99%

“…Second, we contribute to the discussion on the role of vaccinations in financial markets. Earlier studies demonstrated that the arrival of the vaccines (or even successful trials) had benefited stock prices around the world (Kucher et al 2021;Chan et al 2021;Acharya et al 2020) and helped to stabilize the financial markets (Hong et al 2021;Demir et al 2021;Rouatbi et al 2021). Although the pandemic exerted an unprecedented impact on commodities, to the best of our knowledge, the effect of vaccinations on the volatility of commodity companies has not yet been explored.…”

Section: Introductionmentioning

confidence: 99%

COVID-19 Vaccinations and the Volatility of Energy Companies in International Markets

Demir

Kizys

Rouatbi

et al. 2021

JRFM

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The COVID-19 pandemic has elevated both the risk and volatility of energy companies. Can mass vaccinations restore stability within this sector? To answer this question, we investigate stock market data from fifty-eight countries from January 2020 to April 2021. We document that vaccination programs assist in decreasing the volatility of energy stocks around the world. The drop in volatility is statistically and economically significant and robust to many considerations. The observed phenomenon survives a broad battery of control variables; it is also independent of the employed regression model or the volatility measurement approach. Moreover, the effect is not driven by the dynamics of the pandemic itself or the associated government interventions. Finally, we find the influence of vaccinations on energy stock volatility to be more pronounced in developed markets rather than in emerging ones. Our findings bear clear practical implications: policy makers around the world should consider the essential role of vaccinations in the energy sector.

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A Shot in the Arm: The Effect of COVID-19 Vaccine News on Financial and Commodity Markets

Cited by 7 publications

References 27 publications

COVID-19 impacts on financial markets: Takeaways from the third wave

COVID-19 impacts on financial markets: Takeaways from the third wave

Winners and losers from Pfizer and Biontech’s vaccine announcement: Evidence from S&P 500 (Sub)sector indices

COVID-19 Vaccinations and the Volatility of Energy Companies in International Markets

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