By Piotr Matys of Rabobank
Matt Hancock says NHS workers will soon be ready to “inject hope into millions of arms this winter”— Rachel Wearmouth (@REWearmouth) November 10, 2020
For months global stocks have been driven by a very strong cocktail of ultra-accommodative monetary policy and substantial fiscal stimulus packages. More recently the prospects of a relatively calmer relationship between the US and China with Biden in the White House have also provided support to the markets. However, the most potent stimulant to impressive gains is a coronavirus vaccine, as witnessed yesterday. All major stock indices in Europe and in the US soared on the back of the news that the vaccine developed by Pfizer and BioNTech can prevent more than 90% of people from getting Covid-19. While this is undoubtedly great news that gives people around the world much needed hope of a gradual return to normality in 2021, vaccine specialists have warned that there are still unanswered questions regarding production, re-distribution and how long immunity lasts. The precise effectiveness of the vaccine may still change. The data shows that two doses are needed and have to be injected three weeks apart. This means that substantial amount of doses will be required to manufacture and distribute before a sufficient percentage of the global population is vaccinated. Pfizer and BioNTech say they will be able to supply 50 million of doses by the end of this year followed by around 1.3 billion by the end of 2021.
The S&P 500 and the DJIA ended yesterday’s session well below their intraday highs as investors realized that the vaccine developed by Pfizer and...