Today the markets are settling in after all of the excitement that Monday brought.
There is still a sense of relief among investors due to yesterday’s announcement by German pharmaceutical company Pfizer that its Covid-19 vaccine is safe and effective, based on the results of several rounds of clinical trials. This puts Pfizer in the leading position in the race for a cure to the coronavirus and has boosted both the company’s stock and the S&P 500.
Nevertheless, Pfizer has not shared more details about how long it will take for its vaccine to become widely available. In addition, experts have raised doubts about the vaccine’s supply chain, due to a requirement to store the vaccine under -80 degrees Celsius. If the vials need to stay at such extremely low temperatures at all times, it will make them very difficult to transport and store in large quantities across the globe.
In other news, the markets are also adapting to the post-election reality in the United States. A week after Election Day, Donald Trump has still not conceded and insists that he will fight the election results in court. He has also started firing chief officials that he has deemed to be disloyal. Some analysts fear that Trump might sack crucial agency heads (such as the chiefs of the CIA and the FBI) out of spite and to make Joe Biden’s first months as President as difficult as possible.
Sen. Mitch McConnell, who is the Senate Majority Leader, backed Donald Trump’s allegations of voter fraud, despite a lack of evidence. Many notable Republicans currently in office have also stood by Trump in an attempt to hold onto their jobs. The future of the Senate is still undecided, as there will be two more races in Georgia and so far the seats between Republicans and Democrats are tied.
With next year’s makeup of the Senate far from clear and the President’s refusal to initiate the transfer of power to Joe Biden, analysts expect that we will not see a stimulus bill soon, possibly not until 2021. This in turn is dimming economic sentiment.
The coronavirus remains another chief concern for the financial markets. Both the United States and Europe have continued to see record-high daily increases in the number of infections. With any vaccine months away from becoming available, the situation is likely to get worse before it gets better.
