Original title: vaccine news cheered investors up! What kind of sector is the best choice to invest in US stocks in 2021?
On Tuesday, November 10th, market analyst Elliot Smith wrote that Pfizer IncThe release of good news about vaccines has made investors more optimistic about financial markets in 2021. Barclays believes that because of Biden's victory and the good news about the vaccine, the two major tail risks facing the market have been greatly reduced, which bodes well for reflation trading. UBSSuggest investors in the future
Focus on cyclical sectors, avoid big technology and benefit from home isolation.
Pfizer Inc released vaccine and good news, S & P reached an all-time high.
On Monday, US pharmaceutical giant Pfizer Inc and German biotechnology company BioNTech announced that their coronavirus vaccine had more than 90 per cent preventive effect in people who had previously been infected without evidence, and hailed the development as a "great day for science and mankind". Global financial markets rebounded after the news.
November ninth
S & P 500
At one point, the index rose to an all-time high of 3645.99 before closing up 1.17% at 3545.53. European technology stocks fell and bank stocks soared on November 10, reinforcing analysts' view that the focus is beginning to shift from growth stocks to value stocks.
Suni Harford, president of UBS Asset Management, said in an interview on Nov. 9 that 2021 would always be a critical year due to the global recovery of the epidemic and uncertainty about the prospects for fiscal stimulus in the United States, but that changed everything after the latest vaccine news came out.
"in the long run, the market has been rising," Harford said. Because of the resurgence of the epidemic, some people question how high the market can go, but the market has taken into account the prospects for the next two to three years. There is good news on the vaccine, and it may actually be launched in 2021, which I think accelerates the anti-epidemic process and makes people's views on the market in 2021 different and more optimistic. "
After the big rise in US stocks, the technical side is still good, and experts suggest paying attention to cyclical sectors.
Harford's sentiment is in line with the view of Mark Haefele, chief investment officer of global wealth management at UBS.
The market reaction so far highlights UBS's recent view that investors need to diversify their investments in the next phase, choosing cyclical sectors, avoiding big technology and benefiting from home isolation, Haefele said.
Haefele added: "We have said that the next rally in US stocks will be driven by two factors: the end of US political uncertainty and sustainable liquidity growth supported by vaccines."
Emmanuel Cau, head of European equity strategy at Barclays, said Biden was expected to win the US election and that good news on vaccines had greatly reduced the two big tail risks facing the market, which boded well for reflation trading.
He hinted that Republicans might retain Senate seats, meaning that the potential fiscal stimulus package might be less large, but that the Biden administration would retain business-friendly policies while reducing confrontational trade policies. and led to a looser stance on the Fed.
Emmanuel Cau also points out that the market has been more bullish since the summer. After the rise in US stocks, the technical side is not so good, but it is relatively OK. The elimination of two main sources of uncertainty could prompt investors to shift from relatively safe havens-bonds, cash and growth assets-to riskier assets.
UBS's Harford did not hint at a possible reflation deal, saying it remains to be seen what Biden's election means for the United States, the dollar and the rest of the world. 'The market expects slow and gradual growth in the global economy, 'she said in an interview.
Tara Raveendran, head of life sciences research at Shore Capital, said the vaccine produced by Pfizer Inc and BioNTech was as effective as 90 per cent, far exceeding the 60 per cent expected by analysts, while the efficacy of the seasonal flu vaccine was about 40 per cent. He stressed that since the recent statements were only news, more details were needed on several factors, including the durability of vaccine protection, long-term safety, effectiveness in various subgroups, including the elderly and vulnerable groups, and its effectiveness in preventing "mild and moderate" cases.
