Weekly Market Insight

Latest Economic & Market Update 5th November 2020

05th November 2020

Good afternoon, it is November 5th 2020 and here is your economic and market update from BlackBee. 

Today’s focus:

  • Equity market see through election volatility, Treasury yields tighten
  • UK assess vaccine timelines, Germany prepares location and storage logistics

US and European equities both closed the day higher on Wednesday following early morning volatility caused by US election state vote results. The S&P 500 rose 2.20%, the Nasdaq Composite gained 3.85% and Euro Stoxx 50 climbed 2.01%. At time of writing (@ 08:40) the election race remains close as Joe Biden’s lead in Arizona has narrowed. However, European equities have opened stronger while US equity futures are also in the green. It appears that equity markets, for now, are not overly concerned with President Donald Trump’s potential legal action against Pennsylvania, Michigan, Nevada and Georgia. Interestingly the 10 year US treasury yields have continued to tighten. Trading at 0.73% (@ 08:40) the yield is trading lower than the 50 and 200 day moving averages, 0.76% and 0.83% respectively. This would appear to contradict gains in the equity markets. The tightening of yield in US government debt looks like a “risk off” play. The safe haven asset is strengthening as bond investors can’t see a near term US fiscal package solution. Even if Joe Biden wins the presidential race, the Democrats would need to control the Senate in order to fast track a fiscal stimulus deal, at least in the eyes of the bond market. (Source: Bloomberg, Association Press, New York Times)

AstraZeneca’s chief investigator for a Covid19 vaccine trial is optimistic that late-phase results can be produced by the end of the year. Speaking to a group of British MPs, Andrew Pollard, M.D., Ph.D  provided a measured response when asked for an Oxford Vaccine availability date. He explained that prior to having a vaccine ready for distribution, accurate efficacy results are needed first. Dr. Pollard told MPs that he is optimistic that his team “could reach that point before the end of this year”. In terms of distribution timelines, the Chief Investigator for the vaccine believes that there is a “small chance” for distribution in the UK before Christmas. Meanwhile in Germany, health officials have told Reuters that the country is assessing mass vaccination centres. Possible locations include trade fair halls and airport terminals. Germany’s 16 states have been set a deadline of November 10th to outline 60 possible locations to be used as delivery points for vaccine manufacturers. (sources: Reuters, Fiercebiotech)

Best & Worst Performers of Large Cap US Stocks on Wednesday
Click image to enlarge

Global Market Update
(as at close of markets 4/11/2020)