Despite the volatility we’ve seen this year, 2021 could see a major economic boost from the second quarter if the vaccines end up being effective.
Why the Economy Is in for a Boost When Vaccine Takes Effect
The uncertainty over the economy and stock market that began back in February and March with the onset of the first wave of Covid-19 in the United States has returned with the latest wave of the pandemic. While day trading is affected by short-term changes in market dynamics, the current uncertainty and volatility have the potential to affect long-term approaches as well. The pandemic is expected to be eradicated when the vaccine finally gets to the people.
Why Successful Vaccines Would Boost the Economy in 2021
Effective vaccines could give a major boost to the economy in 2021’s second quarter, according to David Rosenberg, a major investment strategist. He, and many other analysts believe that any factor that would take away the Covid danger could only benefit the economy. Anything that grabs people’s attention away from the pandemic could make them engage in their regular activities, such as working, hanging out, investing in products and services, and thereby boosting the economy.
Rosenberg believes that working from home isn’t necessarily bad because people are increasingly finding the arrangement productive.
- It therefore doesn’t affect performance. More and more employers would therefore allow this.
- So, even if the work-from-home arrangement continues, which, in all likelihood, it would for some time, businesses and organizations would maintain or increase their productivity.
- While that would cut short on travel, an impression of normalcy and the pandemic threat passing away would lead people to spend more since businesses aren’t losing productivity despite the work-from-home arrangement.
- A successful vaccine also takes away the fear factor for people.
The Success Factor of the Vaccines
With the number of cases rising, nearly a billion doses need to be manufactured. That’s a lot more than the initial samples made. The challenge lies not just in the manufacture, but also the supply, delivery and storage. That poses a huge logistical challenge. And there’s also the danger of whether the virus could mutate into something else, in which case the current vaccine wouldn’t be effective. As of now, though, the efficacy level is high and in the current state of the virus, the vaccine may succeed in sparking an economic boom in 2021.
The experimental Covid-19 vaccine candidate jointly developed by Astrazeneca and the University of Oxford has reportedly delivered 90% efficacy in late-stage trials. Pfizer ($PFE) and partner BioNTech ($BNTX) have reported potential cures too with their vaccine, while Moderna ($MRNA) has also reported high efficacy levels. The markets have reacted positively to the news, starting the week from November 23 — 26 with a rally. Rosenberg expects inoculations to begin in 2021’s first quarter. If so, he expects the second quarter to witness a massive boom.
These are aspects you need to consider while trading stocks online, when you are strategizing for 2021 and beyond.