"Immediately we’ve hope" – Cramer says the big holdings of constructive vaccine knowledge are warranted
Stocks are soaring on the news about a 90% effective Covid-19 vaccine, and CNBC's Jim Cramer said investors should be excited to see what the scientific breakthrough will mean for everyday life and the stock market.
"When you think about where we were last week and where we felt there was little chance we could stop this thing, now suddenly we have hope," Cramer said on CNBC's Squawk Box.
He spoke after US pharmaceutical company Pfizer and German biotech company BioNTech announced that their Covid-19 vaccine was more than 90% effective in preventing Covid-19 during studies. This is more effective than most market participants expected, and US stocks were poised to rise on Monday when it opened. The Dow Jones Industrial Average futures fell 1,600 points, or more than 6%. The S&P 500 futures were up 4.3%.
Dr. Scott Gottlieb, a former FDA commissioner, told CNBC that the vaccine could be available in limited quantities by the end of December and in large quantities by the third quarter of 2021.
"I think the rally is justified," said Cramer. "I think we're going to start a new discussion and the discussion is what America will be like after Covid."
The news of the vaccine comes amid an increase in Covid-19 cases in the US and abroad. In the past seven days, the country reported an average of more than 103,800 new cases on Saturday, up over 30% from the previous week, according to Johns Hopkins.
"We got in here thinking the disease was out of control. In some states where we felt we had lost the ability to contain it, we really couldn't do anything," Cramer said. "People were talking about a national or local lockdown under a new president, and that could end that."
Pfizer plans to provide the U.S. Food and Drug Administration with an emergency permit shortly after two months of data currently available for the third week of November.
"This is not a company that never brought anything to market. This is one of the largest companies in the world. I'd like to point out that the cynicism about science has been relentless," added Cramer. "Some people believe that science could never address this. That is also wrong."
Despite the positive vaccine news, Cramer said the struggling Americans still need a second federal government stimulus.
"There are small and medium-sized businesses that are hurt and I think there should be compensation," Cramer said. "What if the trip returns, what if countries everywhere return with all the stimulus? Of course they will be naysayers, these are probably people who missed the rally. This is some reason for real optimism, why not?" Don't we just celebrate it? "
"There are a lot of people who felt that growth was going to drop dramatically and I think this will fall off the table and people will have to radically revise their estimates from next year," added Cramer.
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