Eq: Total Market

(New York)

Markets were up big yesterday. Most of the reason why seemed to be some great indications from an ongoing COVID vaccine study. Moderna seems to have reached a breakthrough in its COVID vaccine trials, and the promising results ensured a bigger study at the end of this month. All stocks that are considered COVID-sensitive, such as airlines and cruise lines, rose on the news. According to Invesco, “The way it’s looking at the moment, it really looks as though a vaccine is the only hope. This thing is not going away”.

FINSUM: That Invesco quote is sad, but appears entirely accurate. COVID does not seem to be fading whatsoever on its own, so a vaccine is the only thing that is going to return the world, including markets and the economy, to normal.

(Los Angeles)

In what comes as a possibly worrying sign for the nascent economic recovery, California has announced that it is reversing its re-opening process. Note that this is not merely a “pause” to re-opening, but a reversal, with restaurants, bars, and cinemas closing. The renewed rules were probably the most sweeping and decisiveness action taken to re-lockdown a state. COVID cases have been surging across the Sunbelt, but so far California’s measures to contain the second wave are the most stringent. This has investors worried other states may follow suit.

FINSUM: Two thoughts here. The first is that California is a huge state and highly influential, which makes it more likely other states will follow suit. That said, it is a very liberal state, so larger conservative states (e.g. Texas and Florida) are less likely to follow California’s lead.

(New York)

There has been a quite a bit of consternation over the current labor market, and with good reason. Over a million people have applied for unemployment assistance ever week for over 4 months. All told, over 30 million people have lost their jobs. However, there is an encouraging trend: unlike in past recessions, there is still plenty of hiring going on. New job postings have not plunged the way they did in the past. In previous recessions, including after the Crisis, a lot of unemployment had to do with a combination of attrition and a lack of hiring-much more so than outright layoffs. However, that does not appear to be happening now as job postings are still holding strong at their 2015 levels.

FINSUM: This is an encouraging sign for the economy and for individual job seekers. There is still a chance that demand hollows out—especially if we have another full scale lockdown—but for now things look positive.

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