Vaccines Give Stocks A Shot In The Arm

In this edition of Chart Talk, Tony Ogorek and Jeff Viksjo discuss the historic rise in the stock market over the past year and how the COVID-19 vaccine may be affecting its behavior going forward.

Posted: 4/19/21

TRANSCRIPT:

Tony:

Welcome to this edition of Chart Talk.  I’m Tony Ogorek, I’m here with Jeff Viksjo today, and we are going to be talking about the historic rise in the market over the past year.  Jeff, our first chart here takes a look really from March 23, which was the bottom of this COVID bear market, and where we are today.

Jeff:

The blue line is the NASDAQ, that’s tech stocks mostly, up 95% since the lows hit in March.  The orange and green are the S&P 500 and the Dow.  They have some more value; some banks, energy firms in there.  They are up about 75%.  There’s really two stories here; the first part of the bounce was about the Fed pushing liquidity in the market and the stimulus spent by Congress.  The second chart, we didn’t even know the vaccines were effective until November, so most of the spike came before that and everything really since then has been about those vaccines. 

Tony:

Jeff what I think is really instructive here, is when you look at things going down, there is no protection when there is no buying support.  So, everything goes down exactly the same amount.  As it begins to move out, you’ll see that those tech companies which benefitted from people doing remote computing, really pulled away.

Now let’s take a look at our second chart, which is really sort of interesting.  This takes a look at the vaccine roll out and you’ll see that the EU’s rollout is significantly behind what we have in the U.S. and UK.  What implications, Jeff, do you think that has for the future of markets in those areas?

Jeff:

So the U.S. stock market continues to outperform and this is one big reason that we’ve made a lot more progress in the vaccine.  We’re nearing 40% which have been administered the vaccine, you compare that to the European Union at about 12%, that’s a big difference.  Of course, what does going back to normal mean?  That’s what the stock market is looking for.  Is 40% enough?  We have a long way to go still.

Tony:

I mean it’s great that we’re doing better in the U.S., but the bottom line is until everyone is doing better it’s going to be tough for the Global economy to return to where it was pre-pandemic. 

Thank you for visiting with us on this edition of Chart Talk, and we look forward to seeing you again.

 

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Comments:

Sister Emily Bloom April 21 2021

Mr. O and Jeff, To use the old saying, "You tell it like it is." How long will the vaccine's quite successful trend continue? And what will "going back to normal" mean in the continued future? As always -- thank you for your "words of wisdom."

Ogorek Team April 23 2021

Two challenges to continued progress with eradicating the coronavirus are, the resistance of anti-VAXor‘s to becoming vaccinated and the shortage of vaccines globally. Due to the proliferation of virus variances, none of us will be safe until everyone is safe. Back to normal will undoubtedly be a new normal. We would expect that the life most of us knew pre-pandemic will begin to return to normal as summer approaches. International travel will not be normal for at least another year and it remains to be seen what the impact of the virus will be on the movement to work from home, commercial real estate prices, and the survival of businesses that serve commuters. As they say in the TV business, stay tuned!