Is The U.S. army about to save the world?

Media reports of US army super-vaccine

An interesting story is making the rounds this morning, suggesting that researchers at the Walter Reed Army Institute of Research have made substantive progress in developing a compound that protects against multiple coronaviruses, including Covid-19. The link to the story is here:

https://www.defenseone.com/technology/2021/12/us-army-creates-single-vaccine-effective-against-all-covid-sars-variants/360089/

and here:

https://www.army.mil/article/252890/series_of_preclinical_studies_supports_the_armys_pan_coronavirus_vaccine_development_strategy

with more detail on the preliminary results here:

https://eidresearch.org/news/press-release/series-preclinical-studies-supports-armys-pan-coronavirus-vaccine-development

I have deliberately avoided being an armchair virologist or epidemiologist but having been asked non-stop this week from the world’s media as to whether we will have a “Santa Claus” equity rally this year, this seems to be as good a reason to be less Grinch, and more Santa, as any. Bloomberg ran a story into this line of research recently, including the work of Walter Reed, but this seems to be an evolution of that. Nor have I heard of www.defenseone.com who have released the story. I would be remiss in not letting readers know about this potential, in my mind, major development in the quest for a one-ring to rule them all vaccine. You should, of course, do your own research as to the veracity of the story and the news organisation running it.

If the above story does have legs, the positive momentum seen in US markets overnight could pick up steam substantially. Overnight, the fast-money headline-chasing FOMO gnomes of Wall Street were hard at work as the omicron headline ticker went quiet (relatively), and President Biden made soothing noises about boosters and a potential rerun at the build back better in January. US bond yields rose as hot money moved out of defensive foxholes, US equities powered higher along with oil, but the US dollar continued holding steady.

The buy-the-dip strategy remains irresistible to most and I fully acknowledge that it has had a higher efficacy than any vaccine over the last 18 months. However, with pre-holiday liquidity tumbling, and market direction entirely dominated by headline-derived volatility, it is probably not wise to get too wedded to “the worst is over just yet. I’ll say it again, volatility is the winner in December, not thematic direction. Catching that dip could easily be a falling knife instead.

Asian markets are taking a much more cautious approach to the schizophrenic fast-money histrionics in New York overnight. It appears that the holiday season and book closing has well and truly arrived here judging by the vol I am seeing this morning. In the same vein, the data calendar is equally as empty in the region today, with only Malaysian Inflation of note. Final reads on UK and US Q3 GDP come out this evening, but the words “Q3” and “final” make them old news.

More interesting will be official US weekly Crude Inventories, with a low print potentially extending oil’s comeback. Notably and ominously, natural gas prices hit record highs in Europe overnight as Russian gas stopped flowing through a major pipeline. Ironically, the US has natural gas coming out of its ears, with prices languishing. Europe may yet pay the price for its strategic ineptitude in Q1 if the winter turns brutal, and that’s without omicron.

With that, I am back to watching the news ticker for clues on market direction, along with a continuing search to secure Brussels sprouts here in Jakarta, as strategic a challenge as any facing the international community.

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