Hello, tuna(@miyakojimalife_) (^^)
In this article, I’ve taken a look at Japanese and U.S. stocks, focusing primarily on the COVID-19 pandemic and its aftermath.
In the stock market, where various factors intertwine, there are aspects that cannot be fully gauged based on a single factor alone, but I am examining this as I believe it to be a major factor.
My current view is that the market conditions created by the pandemic may pose temporary risks once the pandemic ends.
Since everyone’s investment style and portfolio are different, I hope you’ll read this as just one perspective.
News Coverage of the Pfizer (PFE) Vaccine
News about the Pfizer vaccine that suddenly caused a stir in the market on November 9
Following the announcement that the product had been confirmed to be more than 90% effective in preventing the disease, sales in the U.S. market skyrocketed.
At first, I thought the Biden administration’s inauguration was a major factor, so I was surprised by the news about the vaccine (ﾟДﾟ;)
(Chart sourced from Rakuten Securities)
The Dow closed atExceeded by 2.9% in a single nightClosed at $29,157.97
The high was $29,933.83, setting a new all-time high at that time.
(Currently, the all-time high is $29,950.44, recorded on November 16.)
On November 16, Moderna also released interim data from a late-stage clinical trial indicating that its vaccine demonstrated 94.5% efficacy.
When will the vaccine be available?
Last winter, when infections were rapidly spreading
What I’m wondering is when the vaccine will be available.
This was reported in today’s Nikkei newspaper.
On the 20th, the major U.S. pharmaceutical company Pfizer submitted an application to the U.S. Food and Drug Administration (FDA) for emergency use authorization of its vaccine. The application is currently pending FDA approval, and the FDA is expected to hold an advisory committee meeting on December 10 to discuss whether to approve the vaccine. Dr. Sloui stated, “Shipments of the vaccine to the states will likely begin within 24 hours of approval,” indicating that vaccinations could start as early as the 11th. (Quoted from the Nikkei)
We are beginning to see a light at the end of the tunnel as we move toward the end of the COVID-19 pandemic.
Developments at the Federal Reserve
On the other hand, it seems that the Fed and the ECB are able to view the current situation objectively.
[Frankfurt/Washington, Sept. 12 (Reuters)] – On the 12th, Federal Reserve Chair Powell and European Central Bank (ECB) President Lagarde welcomed the positive results from clinical trials of the COVID-19 vaccine, while emphasizing that the economic outlook remains uncertain.
In addition, the Federal Reserve announced on the 20th that it would discontinue some of its funding for COVID-19 relief measures at the end of 2020.
This is less a reflection of Chairman Powell’s views and more the result of Treasury Secretary Mnuchin requesting that the Federal Reserve return the necessary funds.
The following four support measures will be discontinued:
- Loans for Small and Medium-Sized Enterprises
- Purchasing Corporate Bonds
- Funding for Asset-Backed Securities
- Purchasing State and Municipal Bonds
In reality, it appears that the use of these support measures has not become widespread due to strict lending conditions and falling market interest rates, but I feel that if the use of the approximately $2 trillion in funds is not determined quickly after they are released, it will become a source of concern for investors.
The risk following the end of the COVID-19 pandemic is monetary tightening.
I think it’s still a long way off, but I believe the biggest risk after the COVID-19 pandemic ends will be monetary tightening.
In the wake of the Lehman Shock, countries around the world have implemented unprecedented monetary easing, and the market is flooded with money.
Although the country has weathered the March crisis thanks to monetary easing, it could also be argued that this is creating a major bubble.
No one can say for certain whether this is a bubble, but I think it’s a situation where we should be prepared for prices to fall following monetary tightening.
I hope this article inspires someone to think, “Stock trading is fun!”
Thank you for watching until the end! ｱﾘ(´･ω･)(´_ _)ｶﾞﾄ♪
