Week in a Glance: between vaccines and lockdowns

23 Nov 2020

In the last couple of weeks, the markets have been torn between two topics: news from the vaccine race and the epidemiological situation in the world and the United States.

Moderna said its vaccine is 94.5% effective, and final test results for the COVID-19 vaccine developed by Pfizer Inc. showed it is 95% effective. At the same time, the FDA (US regulator) will consider the issue of the Pfizer vaccine for emergency use on December 10. Recall in this light that Pfizer's revenues from vaccine sales in 2021 may grow by $ 10+ billion, so the company's shares are a good candidate for purchases.

Despite such a clear positive, stock markets were unable to continue their growth. The fact is that it will take months before the large-scale vaccination begins. In addition, the current situation with the pandemic in the world and in the United States, in particular, is extremely threatening. Over the past two weeks, the number of hospitalizations due to COVID-19 in the United States jumped by almost 50% and reached a record value of about 80,000. Against this background, local authorities continued to tighten measures to restrict social activity. So, this week we will continue to look for sell opportunities in the US stock market.

An interesting event of the past week was the decision of the Central Bank of Turkey to raise the rate at once by 4.75%. Now it has reached 15%, which can naturally lead to the formation of a carry trade in pairs with the Turkish Lira. It makes sense to think about mid-term purchases of Turkish Lira.

Another news of the week was the information that Tesla will join the S&P 500 on December 21. Quite naturally ($ 11.2 trillion Index funds would have to include Tesla shares in their portfolios) Tesla shares jumped, keep on blowing an already huge price bubble.

Given that at the end of the week the question of stimulus in the US resurrected again, and the UK and the EU were again unable to complete negotiations (this time due to the coronavirus disease of one of the EU negotiating group members), stimulus in the US and Brexit that could become top topics of the current week.