the Pfizer vaccine
There’s concept and reality. The stock market is being driven by concept right now, the idea that in, say, six months a vaccine that will likely prevent the user from contracting covid will be widely available.
At some point, but not now, messy details will surface. We don’t know, for example, the cost (the vaccine was apparently financed by Germany, not the US–as Pence claimed it was yesterday). It needs to be stored in a super-cold refrigerator, not the regular ones in drug stores, so distribution is an issue. And the US, land of conspiracy theories, has larger contingent of anti-vaxxers that most other countries on the planet. So there’s an issue of how many people will take it.
Trump visibly losing it…
…in several senses:
–Late last week, Fox News-owner Rupert Murdoch seems to have decided that the risks of continuing to support Trump’s bizarre alternate version of reality outweigh the benefits. So Fox appears to be ceasing its role as the principal megaphone for Trump’s lies.
–According to Bloomberg, a source I trust, the Pennsylvania voting “fraud” case that Trump/Giuliani are trying to bring to the Supreme Court involves the validity of 7,800 ballots. This is far short of Biden’s 46,000+ vote winning margin, so it won’t change the result in PA. Nor does it address Biden’s wins in NV and AZ, which brought him to the 270 electoral vote finish line. The appeal is being financed by contributions being solicited from supporters online. A vintage Trump touch–a fine-print disclosure reveals that half the money raised goes to repaying campaign debt, not to funding court action.
a decisive shift in market sentiment
I think so, anyway. Typically, these are not one-day affairs. As I’m writing this before the Wall Street open, there’s a 3.6% spread between rising Russell 2000 futures and a falling NASDAQ. That’s not as wide as yesterday’s pre-market spread, but it’s still big and it’s still there.
Yesterday’s market played out more or less in the broad-brush style I’d thought. Stocks whose major attraction is that they benefit from continuation of the pandemic fell especially sharply. Economically-sensitive stocks left for dead over the past three quarters bounced even more emphatically.
I think, however, that between these two poles there are stocks that benefit from the pandemic but are the wave of the future anyway, and businesses for whom sunset is still coming, only much sooner because of it. The first group went down anyway, the second went up. At some point, however–but probably not today–individual investors will begin to look for value in the former; professional short-sellers will comb through the latter.
A secondary point: what may be being lost in the positive vaccine news is that over the weekend it became clear that Trump lost his bid for reelection. Although economics is traditionally not the Democrats’ strong suit, I think this means an end to the large-scale damage Trump’s loony economic policies have inflicted on the country. Because most of these losses were initiated by executive order, healing should start relatively rapidly as Biden uses similar orders to nullify Trump’s. This should be a factor in stock market action this week, but my impression is that it isn’t. The bottom line: the domestic economy should be healthier, sooner under Biden–although there won’t be much evidence of that until mid-2021.