Market response already happened

Right now, globally, the numbers of confirmed cases daily are declining, the 7-day moving average is dropping, as are the new deaths figures – which is a lagging indicator, but nonetheless, a useful back up that the new cases figure is being reported accurately, or at least, that the error of reporting is systematic and not trending. That is almost as good.

However, given what markets have done for months now, I think the prospect that they take any solace from this on top of what they have already done, is limited.

But forgetting markets for a moment, this is also important for daily life, as it suggests that we are entering the phase of this pandemic where we can begin to live with Covid. No, it isn’t fun, and there are still considerable restrictions.

One note of caution though. The news that a Hong Kong man has been proven to be reinfected with Covid-19 means that the assumption of the market that it is only a matter of time before a vaccine comes and brings back the old life again, is more questionable. True, this individual had no symptoms (on either occasion), so a vaccine might still save us from the worst symptoms of an infection.

But perhaps we should be tempering our optimism. In any case, and despite the suggestion that the Astra-Zenecca vaccine may be fast-tracked by the US President ahead of the US elections, the likelihood of widespread rollout of any vaccine before 1Q2021 is still looking quite slim. We’re getting there. but it is a long slog, and I still wonder if markets have the endurance for that given that monetary policy and fiscal policymakers alike are running out of policy-“nandralone”?