Stocks surge on vaccine news Monday. It’s no surprise that the stock market is roaring again, fueled by Wall Street’s cheer of the presidential election results, and supercharged by the positive news of a COVID-19 vaccine , with Pfizer announcing that the coronavirus vaccine was 90 % effective this week.
The hope is that a speedy inoculation of our population, coupled with the Biden administration’s tighter anti-COVID measures and promised robust economic stimulus, will get things back to normal quickly. This was big news across the board, for the S&P 500, Dow Jones Industrial Average, oil prices and the NASDAQ composite.
Really COVID-sensitive stocks like airlines and banks bounced this week, and stay-at-home plays like tech suffered somewhat.
Stocks surge on vaccine news
On the surface this is all wonderful news. In respect of it – a possibly far quicker economic recovery than predicted – Camarda’s portfolio board today voted to stand ready to deploy significant cash in a structured fashion to take advantage of the uptrend.
That said, our guard is still up and we intend to be very surgical in this.
We need to remember that stock market values remain stretched by most measures. That means they appear way overprices, and could be due for a hard fall. Some market charts are showing head and shoulders patterns, which may indicate a market top before a big correction or worse.
On the health front, US cases continue to surge to record levels. We are entering the worst season, and coronavirus cases are likely to worsen. While the Pfizer news is GREAT, the small print is the vaccine needs to be stored at about 100 degrees below zero to keep from going bad. That’s a lot colder that your ice cream freezer at CVS, and probably beyond the capacity of most hospitals even. Rolling out the infrastructure will take some time, and some doing. This will be lots harder than flu shots.
On the political front, the presidential election drama still ain’t over, and transition – if Joe Biden results are validated, as seems overwhelmingly likely – could still turn into a real damaging wrestling match. That would be bad for the economy, the market, and lots of other things.
On the tax front, Biden’s hands are somewhat tied without a Democrat Senate. It may still flip that way, but without it we can still look for lots of change via executive order. For one, would be on a really beefed up IRS with lots more investigation and enforcement action. Estate taxes WILL go up soon under existing law, and will go up higher and faster if he gets the Senate. Beyond that, and quoting from the news:
- Mr. Biden could direct the Education secretary to forgive student loans up to a certain amount
- raise the minimum wage for federal contractors to $15 an hour
- Biden administration could act on its own to raise taxes — largely by changing regulations governing how Mr. Trump’s signature 2017 tax law is carried out.
That’s it for this week in wealth.