Weekly Market Insight

Latest Economic & Market Update 17th November 2020

17th November 2020

Good afternoon, it is November 17th 2020 and here is your economic and market update from BlackBee. 

Today’s focus:

  • Moderna’s 94.5% effective vaccines sends S&P 500 to new heights
  • Banking dividends should be withheld – Basil Committee

For the second consecutive Monday, an encouraging Covid-19 vaccine development was announced. Moderna revealed that the company’s vaccine in late-stage trial is found to be 94.5% effective. 10-year US Treasury yields traded in the 0.89% to 0.915% range. The S&P 500 closed at 3,626, gaining 1.2% for the day, setting an all-time high for the index. Moderna shares rose 9.58% while Pfizer equities dropped by 3.34% yesterday, one week after the announcement of a 90% effective vaccine. A key difference exists between how the vaccines need to be stored. The Pfizer vaccine needs to be kept at around -70C while the Moderna vaccine can be stored at room temperature for up to 12 hours or for up to 30 days at -20C (as a cold as most domestic freezers). The Pfizer vaccine is likely to be the first to reach Ireland as the EU has pre-ordered 300 million doses. EU distribution will be based on population size, so if approved, Ireland will receive 3,030,000 doses (1.01% of total EU order) of the Pfizer vaccine. (Source: Bloomberg, Irish Times)

The global banking regulator has indicated that bank dividend payments should remain on hold until the long term Covid-19 economic impact is uncovered. Carol Rogers, Secretary-general of the Basel committee, told the Financial Times “In a crisis, there is a premium on flexibility. Holding back on discretionary distribution of capital I think makes sense”. This is another example of the issues facing income investors. Last week, new guidelines were issued by the Society of Actuaries in Ireland requiring funds that invest in equities or bonds to revise return projections. Projected returns from bond funds will be capped at 1% while funds that invest in equities cannot project growth of more than 4.5% a year in future. BlackBee provides alternative asset investment opportunities in sectors including healthcare, renewables and real estate. While public equity dividends and bond yields are unable to ensure continuous income stream, alternative assets that can provide stable income should grow in popularity.

Best & Worst Performers of Large Cap US Stocks on Monday
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Global Market Update
(as at close of markets 16/11/2020)