Early Christmas gifts to support year-end rally

Friday 27 November 2020

Global Investment View

The other positive news came from Pfizer/BioNTech and Moderna, regarding the high efficacy of their vaccines, while other trials are also accelerating.

However, both news brings some shadows as well. Markets are underestimating that Biden will have to concede something to the more radical section of his party. On vaccines, we need a confirmation from the scientific community that they work. In addition, development of vaccines for a large portion of the population is challenging.

As we approach year-end, markets can count on two pieces of news to propel some optimism. The first comes from the US, where the Biden victory, without a real Blue Wave, is seen by markets as the best possible outcome. A Republican, or even a 50-50 senate, would make it very hard for the new president to pass any extreme measures in terms of fiscal push, more drastic legislation or tax increases.