Why investors don't expect market meltdown from hantavirus
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Stop us if you've heard this one before, but fears about the global spread of a frightening virus are catching Wall Street's attention.
Why it matters: The hantavirus cruise ship outbreak has reignited concerns about a global health crisis — sparking a brief jump for vaccine stocks, even as experts say it's nothing like the COVID pandemic.
Reality check: Investors aren't anticipating anything like the market meltdown that occurred in early 2020 when the world shut down.
- "The hantavirus outbreak has generated outsized headlines, but the investment implications remain limited as it thus far lacks the ingredients that made COVID-19 a systemic market event," Baird investment strategist Ross Mayfield tells Axios in an email.
- "Unlike COVID, this does not look to be a highly transmissible, economy‑wide threat."
Driving the news: The biotech sector has already seen a flood of trading as some investors sniff around for opportunities to cash in.
- Moderna shares jumped early Monday after it confirmed it's researching hantavirus vaccines, but the stock relinquished those gains by the afternoon.
- "With regards to current headlines, we see no meaningful revenue opportunity," Evercore analyst Cory Kasimov wrote in a research note about Moderna.
Several other biotech firms — including Inovio Pharmaceuticals, Novavax and Emergent BioSolutions — also saw their shares jump in premarket trading before falling back to earth, CNBC noted.
- "Biotech might get a pop on renewed interest in vaccine tech / AI integration, but there likely only a very limited revenue opportunity from this outbreak so it would be more of a narrative-driven trade," Mayfield says.
What we're watching: Whether the cruise industry loses revenue as fearful travelers get cold feet about booking trips.
- Mayfield said cruise lines "might take a reputation hit," but they're facing a much bigger crisis in the form of spiking energy prices from the Iran war.
The bottom line: The market impact of the hantavirus looks contained for now.
