Citi ser mere positivt end mange andre på muligheden af at få Bidens store finanspakke på 1900 mia. dollar vedtaget, og banken hæfter sig ved, at der kommer vacciner fra flere producenter, og at de bliver bedre til også at håndtere mutationer, så de også bliver bedre i de nye økonomier. Det kan styrke aktier, der har været undertrykt under coronakrisen.
More Stimulus and Vaccines Appear on the Way
US President Biden proposed a third, much larger economic support package of US$1.9 trillion, which if passed in the state presented, adds the capacity to address immediate needs with enough aid to address a longer-lasting crisis if needed.
It could extend unemployment benefits, provide US$370 billion in funding assistance for state, local and territorial governments and public transit systems, provide US$170 billion to open and schools open and numerous other subsidies for low income families.
More and better vaccines
- After approvals of vaccines from Pfizer, Moderna and several from China that could find use in emerging markets, regulatory approvals of vaccines from Johnson & Johnson (J&J) and AstraZeneca in the US and Europe are pending.
- These appear positioned to succeed in the developing world given their less stringent storage requirements. J&J’s vaccine approach is a single dose. If effective, this may accelerate the speed of positive impact on restraining the virus and known variants.
- In light of the impressive earlier clinical data, Citi analysts expect J&J’s Phase 3 COVID-19 vaccine trial to illustrate safe and effective results. This could be another catalyst for global recovery as it could add another 1 billion doses in 2021.
Implications for portfolios
- There has been a remarkable recovery in some COVID-19 impacted assets and much less movement in others. For example, US small cap equities (up 28% since end 2019 to mid Jan 2021) and Latin America stocks (-14% since end 2019 to mid Jan 2021).
- Defensive, interest-rate sensitive assets have held their value during the past quarter despite rising long-term US rates. Chinese shares have outpaced their Southeast Asian counterparts by 40% since the start of 2020. In short, Citi analysts see momentum having carried some trades beyond near-term expectations.
- Separately, Citi analysts have previously expected a peak in the USD that is expected to decline. However, such declines rarely take place without interruption. The decline in the dollar is now a consensus trade that is at risk.
- Given these equity market divergences and strong consensus short positioning in the USD, Citi analysts believe there may be counter-trend rebounds in the US exchange rate. This can have negative repercussions for some of the best-valued long-term investments such as Emerging Market equities, post-Brexit UK equities, and global dividend payers including Financials. Nevertheless, Citi analysts view such pullbacks as potential opportunities.