Weekly Market Comment: Friday, November 13th
On Monday morning, the Wall Street Journal’s headline story was “U.S. Stocks Surge on Vaccine Results, Biden Win”, as the Dow jumped over 4.5%.
Early data shows Pfizer’s vaccine to be more than 90% effective in preventing Covid-19 – a “critical milestone”. The historian Anne Applebaum put it well: “The new vaccine is a German-American joint effort. The CEO of the German company, BioNTech, is German-Turkish. Trials were conducted all over the world. Globalization will stop the coronavirus.”
The good news couldn’t have come at a better time, as earlier this week America became the first country to top 100,000 coronavirus cases in a single day. By Wednesday, the daily count crossed 140,000 per day and on Thursday, it crossed 150,000. Deaths have not risen at the same pace but are still at 1,500 per day. Travel, restaurant, hospitality and oil did especially well on the vaccine news, having been some of the worst hit by Covid-19.
While the 90% figure is much higher than Dr. Fauci’s hope for 75% efficacy and higher still than the 50% efficacy the FDA set as a minimum expectation, safety results have not yet been released. There is also the challenge of transporting and stocking a vaccine that requires -70 degrees Celsius temperatures. Pfizer has already made thousands of suitcase sized storage devices that will be ready to ship should the FDA approve the drug. By the way, the location of such storage spots is top secret and shipments will involve dummy delivery trucks with fake vaccines as well as GPS trackers and black-light verification in a bid to make it less appealing for organized crime to attempt to get their hands on it or attempt to make counterfeits.
In the meantime, President-elect Biden promised to make the Covid-19 fight his first and top priority. Having a safe and effective vaccine will be key to such efforts.
Will Biden and McConnell table a large stimulus deal? Let’s not hold our collective breath
Hopes for another large round of U.S. stimulus are fading, as the Senate Majority Leader McConnell said “that’s not a place I think we’re willing to go,” as he correctly surmised that Democrats are “looking at something dramatically larger”. He does still say another package is needed.
The trouble with a really large package is that it means a really large deficit. It is reasonable to expect Republicans to return to their fiscal restraint stance now that a Democrat will soon occupy the Oval office. And that’s not necessarily a bad thing in general. At least not in normal, pandemic-free times when the economy is doing ok.
The Fed Chair Powell reminded everyone this week of his belief that the direction of the economy will be virus dependent. And we know how that’s been trending.
But let’s maintain some long-term perspective. Dr. Fauci points out, Covid-19 won’t be a pandemic for “a lot longer” thanks to the above mentioned vaccine progress and others.
Sacrificing nothing
The Canadian Liberals, having thrown away their Chretien and Martin era playbook of how to enact disciplined balanced budgets, have instead indebted Canada like no other western nation:
The Canadian Emergency Response Benefit (CERB) is a useful covid-era help for those who are truly in need. But their checks and balances are too feeble, as there are cases of millionaires “firing” themselves from their holding companies. While individuals took liberties with the spirit of CERB, the blame rests with the irresponsibly lax implementation of an otherwise useful and vital service. Surely it wasn’t what the government intended, was it?
Noteworthy links:
- Berkshire buys back its own stock
- Pfizer’s early data shows vaccine is more than 90% effective
- TransLink the first in North America to test anti-microbial copper coatings on high-touch surfaces
- Six months into the pandemic, this 128-year old shoe store is still standing
- The Canadian Ariel Posen plays the guitar like few others can
- Alex Trebek’s wife pays tribute with heartfelt message and photo from their wedding day
- Italian man, 81, serenades his sick wife from outside hospital
Musings Beyond The Markets
The imprint of a Japanese kamikaze aircraft on the side of HMS Sussex. Incredibly, the aircraft hit the side of the HMS Sussex and fell into the ocean without damaging the ship. Circa 1944.
Anatoly Golimbievsky, a heavily decorated Soviet veteran who lost both legs in the Second World War, acknowledges the salute of four young sailors from the Nakhimov Navy School on V-Day in Leningrad in 1989.
In 1970, a North Vietnamese soldier lighting a smoke for an elderly man on a graveyard; both of whom have lost a leg. The text on the sign near them reads: “graveyard of 45 students that were killed by an American bomb on March 16, 1965”.
Under the black clouds of burning oil fields during the Gulf War, camels forage desperately for shrubs and water in southern Kuwait, 1991.
*(photos and commentary from historyinpictures on Instagram)
Word of the Week
sacrifice (v.) – the act of giving up something especially for the sake of someone or something else. “Out of the depths of sorrow and sacrifice will be born again the glory of mankind.” – Winston Churchill