Vaccinated US Equity Market Will Hold

Gregory C. Beier

Macro ESG Strategist & Founder

Sustainability Arbitrage LLC

Thursday, December 17, 2020 8:52 PM EST

“Markets, politics, and technology for a sustainable future.”

US States

The latest developments are quite stark: 

• Southern California officially is out of available ICU beds as of 4:17pm EST today.  

• On Wednesday, California had 51,724 new coronavirus cases – breaking the previous high of 42,088 set on Monday.

• Similarly, Wednesday recorded 393 Covid deaths versus 295 on Tuesday.  

And it is just December 17th. We have just entered the cold weather months. 

Let’s compare the current cases to the earlier peaks: 

• California is at 90 cases per 100k versus a first wave peak of 25 on July 23.

• New York is at 52.5, just surpassing the old high of 49.7 on April 9th. 

The US hospital system appears that it is about to be overwhelmed from both the current rush from Thanksgiving and the subsequent rush from Christmas.

International

And let’s compare the US to the UK and Denmark:

• The US is at 64.3 while Denmark is at 50.2 and the UK is at 31.3 – yet the two European countries are on lockdowns and the US is sailing right along, open for business.

• In fact, the US new infection rate is at three times the high of the summer wave of 20.2. 

While the vaccine is a miracle, the simple fact is that America’s figures are twice as as high as the UK which is on a tight lock-down now.  

Vaccinated Risk

In spite of these dire facts and likely projections, because the Fed has pushed so much money into the system, giving Airbnb a sky-high valuation on day one, and because of the vaccine - nothing is going to come down.

Equites are looking through the winter at the rebound that will come in the summer from economic activity snapping back.

The stock market is quite literally vaccinated from the covid crisis.

I have more to say about this rally, from an international perspective – but I’ll share it in a long post soon.

The lingering question is how vaccine diplomacy will change the world’s global power dynamics