COVID-19 Vaccine - Where do we stand?

As we enter the final few weeks preceding the US election, President Trump is more committed than ever to deliver a vaccine for Covid-19, or at least convince the public that one is very near. It's no secret that the electorate overwhelmingly disapproves his management of the pandemic, so this focus is part of a campaign effort to improve his standing prior to the election.

Reassessing our return expectations

Equity market developments since the beginning of April have been confounding.  On the one hand, most of the worst predictions for the global economy have been confirmed, and most countries are in the midst of the worst economic contraction in a century.  On the other hand, markets have recovered back to recent highs that were achieved at a time when the outlook was relatively robust, few had heard of Covid-19, and valuations were arguably somewhat high. What accounts for this dissonance?

First thoughts on the shape of the recovery

There are no historical precedents for the type of economic dislocations that we are experiencing. War time economies experience disruptions in some sectors, but they also benefit from the considerable mobilisation of economic resources towards the war effort. Today’s shutdowns are of a different nature: they are a deliberate attempt to arrest the spread of the Covid-19 by minimising all economic activity that involves social interaction.