Stocks traded higher this morning as yet another drug company debuted its new Covid treatment. This time around, it was Regeneron (NASDAQ: REGN) that stole the show after revealing that its Covid “antibody cocktail” cut infection risk by a whopping 81.6%.
For those keeping score at home, that’s not as good as Pfizer’s (NYSE: PFE) remedy but it’s better than Merck’s (NYSE: MRK). REGN shares traded higher at the open as PFE and MRK both fell slightly.
Regeneron’s treatment solution is essentially the same one that President Trump was given by White House doctors last year when he contracted Covid. At the time, the mainstream media was quick to condemn Trump’s use of it.
Now, though, it seems like the drug cocktail actually works if researchers are to be believed.
“Today’s new data demonstrate how a single dose of REGEN-COV can help protect people from COVID-19 for many months after administration,” explained Myron S. Cohen, M.D., head antibody researcher at the NIH-sponsored COVID Prevention Network and director of the Institute for Global Health & Infectious Diseases at the University of North Carolina at Chapel Hill.
“These results demonstrate that REGEN-COV has the potential to provide long-lasting immunity from SARS-CoV-2 infection, a result particularly important to those who do not respond to COVID-19 vaccines including people who are immunocompromised.”
Major American drugmakers (and government agencies) had a knack for overestimating vaccine efficacy ever since the pandemic began.
But if Regeneron, Merck, and Pfizer are accurate in their treatment efficacy predictions, it could potentially mean big things for pulling back the few remaining Covid-related restrictions.
That may, however, cause an entirely different kind of problem if it accelerates economic activity:
Even hotter inflation.
A critical Consumer Price Index (CPI) release is coming up on Wednesday, November 10th. In September, the CPI remained at a 30-year high (+5.4% annually). If October’s number is worse, the US’s economic outlook could slump in response.
“The old ghost of inflation is re-emerging in everyone’s minds as many consider the next CPI figures to be crucial, especially in the US where investors remain clueless about the pace of the Fed’s upcoming asset purchases,” remarked Pierre Veyret, technical analyst at ActivTrades.
Dow-polled economists believe that headline CPI rose to 5.9% annually in October, up 0.5% from September’s print. If their prediction comes close to the reported number, the US will have spent six months above 5% inflation.
Not many investors would have expected a continued bull run with inflation lingering above 5% for half the year. Yet here we are, and the market sets new high after new high, week after week.
The inflation situation likely contributed to crypto’s impressive rally over the last six months, too. As soon as CPI spiked over +5% year-over-year, Bitcoin rocketed higher, climbing from a summer low of roughly $28,600 to a new high of $67,000.
And today, Bitcoin’s attempting to set another record high as well.
If October’s CPI print meets expectations (or worse, exceeds them), the next “crypto boom” may very well be upon us.
All while the Fed insists, as usual, that high inflation is merely “transitory” despite repeated CPI reports suggesting otherwise.
