Daily Market Color November 16, 2020Equities Trade Higher After Vaccine Announcement Equities rise after Moderna’s vaccine announcement This morning, Moderna announced their phase three trial data showed their vaccine to be 94% effecting in preventing COVID-19. Despite virus cases spreading rapidly, President-Elect Joe Biden’s advisers are also advising against a complete lockdown in the US. Without the prospect of a shutdown standing in the way of an economic rebound combined with the vaccine news, global stocks rose to pre-pandemic highs on Friday — the S&P 500 rose 1.4% to hit an all-time high. Treasury yields and swap rates ended rangebound on Friday — the 10-year closing flat on the day. UST yields are trading mixed this morning. COVID-19 cases hit record highs in the US Moderna’s vaccine announcement is a “game changer” according to their CEO Stephane Bancel. Their phase three trial revealed the vaccine prevented COVID-19 in nearly 95% of the trial’s 30,000 participants. US virus infections hit a record high on Friday after daily cases rose past 100,000 for 10 consecutive days. The US surpassed the 11 million mark after states like Illinois and New York report high numbers. Michigan and Wisconsin have rolled out tighter restrictions, with all in-person learning suspended. In Germany, the economy minister warned the country must face “considerable restrictions” for the next five months to curb the virus spread. Global cases have topped 54.5 million with fatalities nearing 1.4 million. Fed Presidents Bullard and Williams disagree on pace of US economic recovery During their speeches on Friday, St. Louis Fed President James Bullard and New York Fed President John Williams both echoed Fed Chair Jerome Powell’s comments from the week before. Though all agree the rising virus cases pose a risk to the economy, Bullard and Williams differed in the predictions of the recovery timeline. Bullard argued that a targeted stimulus package passed by Congress and asking people abide by the guidelines set by health officials is sufficient. He estimates that a $3 trillion bill should be able to address the majority of the fallout. Though Williams agreed that fiscal aid is necessary, he believes the recovery is dependent on a vaccine. Until then, the economy will remain in a “deep hole” and the pace of the recovery will remain a “question mark.”
