90% Efficacy & an Outside Day
Macro Perspectives: Thu 19 Nov 2020
We now have three vaccines that claim better than 90% efficacy.
For what is considered to be such an insidious disease, it's interesting that the scientists honed in on just the right protein and formulated a nearly flawless vaccine in nine months (or less) - all three happened to complete studies just days after the election.
For perspective, let's take a look at the CDC's chart on annual flu vaccine efficacy.
We have a 90%+ efficacy COVID vaccine, the flu vaccine last year was 29% effective!
As some areas of the U.S. (and globally) continue to ramp up stay-at-home orders, the Republicans have said they would favor a targeted$500 billion relief package. Pelosi, predictably, has no interest. It seems clear the lockdowns are about applying pressure to the Senate to get funding for the Biden agenda - namely, a multi-trillion dollar spend to transform the American economy.Â
My view on the Pelosi mindset -Â the stimulus ($500 billion) would unleash the money that would make irreversible change to the economy. It would not come through deliberate action by elected officials, it would come as a ransom payment to get suffering people relief.
Now, stocks plunged into the close and continued to slide, post-close, in the futures market. Importantly, the Dow put in this outside day - a technical reversal signal.These signals don't always work, but they have a good record of being present at historical tops and bottoms.
In this case, as we discussed yesterday, the markets seem to be underpricing the risk of some chaos surrounding the election. With that, the Trump legal team has been gathering evidence to present a fraud case - a case will have to be made to the American people first - and the question is, will it be of scale and will there be irrefutable (large scale) evidence in the eyes of the American people?
What's likely is that they will become more and more vocal, sooner rather than later, and that alone should raise the specter of risk in markets.