Vaccine rollout, M&A Monday, stimulus hopes

Vaccine rollout in US as Covid runs rampant

The vaccine rollout and merger Monday stock market rally was faded as investors start to ponder how much higher prices will be able to go next year.  Both the Dow and Russell 2000 index tentatively made record highs before getting faded.  Uncertainty of the trajectory of stocks has the top banks calling for next year for the S&P 500 index to rally between 4% to 20%.  Predicting what stocks will do by the end of the Trump administration is probably just as hard of a question.

As the US approaches over 300,000 deaths, it seems very likely that the Thanksgiving surge and potential Christmas gatherings will lead to more restrictive measures. New York City Mayor de Blasio warned that New Yorkers should prepare for a full shutdown, while Governor Cuomo has stated the shutdown of NYC could happen within a month.  The main uncertainty for Wall Street remains control of the Senate as poll margins are under a couple percentage points and well within the margin of error.  US stocks have firmly priced a Republican controlled Senate to keep checks and balances in place for the Biden administration.  If early voting is strong, this could start to put pressure on Nasdaq.

Alexion M&A as IPO market heats up

The roughly USD39 billion takeover of Alexion by AstraZeneca is a strong move that makes the cancer drug powerhouse even stronger with rare diseases.  M&A in the pharma world is happening at a quick pace.  In September, Gilead Sciences acquired Immunomedics in a USD21 billion deal.  One of the main reasons, everyone is bullish for 2021 is that M&A is likely to continue, and the IPO market is heating up again.

Stimulus impasse continues

US lawmakers are still trying to put together a spending bill and deliver another COVID stimulus bill.  The current virus spread justifies further aid, but Congress is dragging this out.  Today the focus is on a two-part COVID package.  One part will have liability protections and aid for state and local governments, with the other part containing mostly everything Republicans and Democrats can agree upon.  Splitting the bill in two parts raises the chances lawmakers will get the spending bill done with some COVID relief.

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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya