Home Stock Market J&J debt trading lower following the suspension of the single-shot COVID-19 vaccine

J&J debt trading lower following the suspension of the single-shot COVID-19 vaccine

Johnson & Johnson’s corporate bond traded lower across the board on Tuesday, after two top US health authorities recommended a halt of their single-shot COVID-19 vaccine after six women were injection. developing blood clotting.

While the sales are more pronounced at JNJ

According to data from BondCliq, a platform that tracks corporate bond trading, the downward pressure is also evident in its shorter 5-year debt.

This chart shows that the JNJ’s most active 2.25% bonds, due in September 2050, have seen the burden of selling, down by about 5.4% in Thursday afternoon trading. Three.

JNJ bonding under pressure


The White House said on Tuesday that the suspension of the JNJ will not have a significant impact on its vaccination plans, partly because the Biden administration has had enough. alternative doses to vaccinate 300 million Americans.

Read: Johnson & Johnson vaccine interruptions: What you need to know if you’ve already had or scheduled an injection

Brian Kloss, portfolio manager at Brandywine Global, said: “I think it is probably too early to draw a solid conclusion, as to whether suspending JNJ could hinder the COVID-19 vaccination process of the United States. “The question we have to ask is, does this mean something similar for Pfizer or Moderna?”

About 37% of the US population has received at least one dose of the COVID-19 vaccine, according to government data. Less than 5% of the White House received the one-shot JNJ vaccine, while the rest received two because Pfizer Inc.
+ 0.51%

and German partners BioNTech SE
+ 6.68%

or from Moderna Inc.
+ 7.40%
received an emergency use license prior to Johnson & Johnson.

The Food and Drug Administration and the Centers for Disease Control and Prevention have recommended stopping JNJ injections on the following Tuesday. six cases of blood clotting has been reported among women, all between the ages of 18 and 48, out of about 6.8 million who received the vaccine.

A major concern on Wall Street is that any delay in U.S. vaccination could hamper a post-pandemic economic recovery.

Inventory Mixed closure Third, with the Dow Jones industrial average

down 0.2%, but the S&P 500 index
+ 0.33%

hit the 21st all-time high Large stock iShares iBoxx $ Investment in Corporate Bond ETF
+ 0.44%

up 0.4%, according to FactSet.

“Solid pricing, on a spread basistrading towards historical tightening, ”said Kloss of US investment-grade corporate bonds, priced at a premium over the risk-free Treasury.

price. “One could call them ‘rich’ and not give a sizable margin.”

On the other hand, any sort of glitch in the so-called reopening of trade is likely to be met with additional support from the Federal Reserve or from Congress in the form of additional stimulus, he said. .

Patrick Leary, Incapital’s head of trading, talking about the JNJ halt, said: “To be honest, I don’t think it will deflect recovery. “To the extent that it causes vaccine indecision in people, that’s a worrying thing.”

Johnson & Johnson and Microsoft Corp.
+ 1.01%

Keeping the rare difference is that the only remaining two US conglomerates have top AAA ratings, suggesting that either firm’s default is low. That also means any divergence is likely to remain fairly silent.

JNJ said in a statement that “is working closely with health professionals and health authorities.” The company also said it will “proactively delay the rollout of our vaccine in Europe,” after being allowed to use it in mid-March in the region. There was no immediate response to this article.

FDA issued J&J emergency approval for single-shot COVID-19 vaccine on February 27.

Nicholas Elfner, co-lead research team at Breckinridge Capital Advisors, said: “It was a turn in the road, but it didn’t change his second quarter. Prospects for corporate bondsThis includes the expectation that net leverage will stabilize and that earnings will grow strongly.

“Certainly, the macro landscape in America looks constructive to us, despite this news today,” he said.

Read: This is why the bond market is against the rise of US inflation



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