Yesterday, the US Treasury did something interesting right before the market open.
It announced that it would double its long-term Treasury buybacks from $2 billion to at least $4 billion per operation, targeting 10 to 30 year bonds.
Everyone with a pinch of understanding about bonds would know this was intended to lower long-term yields, which have been putting pressure on the equities market.
Interestingly, the most rate-sensitive AI names such as AMD, Nvidia and Nebius did not receive a boon, but surprisingly fell.
All while another sector rose as a star…Healthcare.
This came as Moderna and Merck had just announced positive findings from their collaborative cancer vaccine research on melanoma.
Melanoma is often considered the deadliest form of skin cancer. If diagnosed after it has spread to distant organs, the five-year relative survival rate falls to around 35%.
Recent findings have been nothing short of exciting and optimistic.
Cancer is so difficult to treat partly because our immune system can fail to recognise cancer cells as a threat. Tumours can also suppress the immune response against them.
Moderna’s personalised mRNA treatment, intismeran, aims to overcome this by helping a patient’s T-cells recognise the melanoma as a threat. Then, Merck’s Keytruda helps stop the cancer from suppressing that immune response.
Needless to say, this optimism has been reflected in Moderna and Merck share prices.
Moderna rose by around 176% in a single day, gapping up by around 50 points.
And Merck & Co. experienced a rise of around 12% into all-time highs near $152.
