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U.S. stock market indices surged to new highs Monday . . .
Led by the Dow Jones Industrial Average posting a 4.6% gain.
Major news outlets including the Associated Press, The Wall Street Journal, Fox News and CNN declared Joe Biden the president-elect. Even more important for stocks is positive news regarding a Covid-19 vaccine.
The major indices are now trading at all-time highs.
This means we’ll continue to see a flood of new IPOs before 2021. In fact, 146 private companies are waiting to go public.
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So, let’s dig into the major news today.
Pfizer Vaccine Is 90% Effective
This morning we got big news from Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX). The vaccine is developed in partnership between the two companies. It uses a new technology known as mRNA.
The companies have enrolled 44,000 people in a clinical trial.
The initial results show the Pfizer vaccine is over 90% effective, based upon use by 94 infected individuals. The FDA requires that the study have 164 people who become infected.
The companies expect to request FDA approval by late November.
At that point the Pfizer vaccine will have over two months of safety data from its drug trial. Initial indications suggest the Pfizer vaccine is both safe and effective.
Pfizer plans to manufacture vaccines for 15 million – 20 million people by the end of the year. It appears that a vaccine will be widely available in the U.S. by mid-2021.
Both Pfizer and BioNTech shares were up 9% on Monday morning.
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Election 2020
Last week I explained that the stock market rally could continue. And that the stock market didn’t really care WHO was in the White House.
Trump wins? Stocks go up. Biden wins? Stocks go up.
The reason is that the stock market is focused on the economic recovery. And how that translates into corporate earnings in 2021 and 2022.
Trump would’ve been positive for stocks. The Trump tax cuts certainly helped corporate earnings. And he’s been viewed as very positive for corporate America.
Meanwhile, Biden is widely viewed to be better on the coronavirus. And many investors think that getting the pandemic under control is crucial for a solid economic recovery.
On Saturday, the major news outlets declared Biden as the president-elect. Today, the market seems to be embracing this as a credible outcome. And it appears that the U.S. will not face political unrest and prolonged uncertainty.
The fact is that stocks typically DO go up. The market has delivered strong gains with either a Democrat or a Republican in the White House.
It appears that the U.S. Senate will remain controlled by Republicans. That suggests that Biden will be unable to dismantle the Trump tax cuts – which has been very positive for the stock market.
The combination of political stability and a coming Pfizer vaccine is good news for the stock market. And that’s why we’re seeing the market rally today.
The strong market will spark a rush of IPOs in November and December. In fact, we’re expecting Airbnb to release its confidential IPO filing this week.
Go here to grab your Pre-IPO shares ASAP.
Yours in Wealth,
Ian Wyatt