Developments in potential Covid-19 vaccines and shifting 2020 election probabilities are going to be among the most significant movers of financial markets for the foreseeable future. Both “story-lines” have enormous implications for our future.
With new cases surging, Covid-19 will remain our public health, social, and economic nightmare until we have effective vaccines that immunize a large percentage of the population. Stay on the alert for news about “Operation Warp Speed”, the federal program that funds companies developing Covid-19 vaccines. Little is known about the details of how the billions of Operation Warp Speed dollars are being spent. We do know, however, that at least four companies have been funded to conduct the large-scale phase three clinical trials that must precede the introduction of a vaccine: AstraZeneca; Moderna Therapeutics; Johnson & Johnson; and most recently Novavax. Pfizer and BioNTech are also working together on a vaccine. Might we see a vaccine by the first quarter of 2021? New York Times CNN medicalcountermeasures.gov/ finance.yahoo.com
The coming November elections are already on everyone’s personal radar but shifting outcome probabilities will move financial markets. Betting markets now strongly signal a Biden win but are also suggesting the possibility of a Congressional sweep by Democrats. PredictIt RCP One implication (of many) of such a sweep is the likelihood of higher corporate and personal income taxes, causing investors to recalculate the coming planning landscape. Keep in mind that four months is a long time when it comes to national elections and that the betting markets and polls are not infallible. CNBC Axios New York Times CNBC