Firstly, a study from China’s public health authorities has concluded that almost half a million residents in Wuhan have been infected with COVID-19, which is ten times higher than the 50,000 originally reported back in April. That’s more than just a slight error or oversight in the data, but it should really be no big surprise to anyone. Everyone expected China was downplaying the surge of the virus. This just confirms the fact that China always lacks transparency when it comes to data, including economic data too.
An international team of scientists is visiting Wuhan in January to investigate the origins of the virus. This is something Beijing was against happening, but it has been agreed after long-term negotiations. You’d think if China was so certain it didn’t originate there, they’d be wanting investigations to happen to confirm it.
Since this isn’t big news, it isn’t really moving things much. On the other hand, something that’s a bit more concerning is that the new COVID-19 variant has made its way to the US with the first case being reported in Colorado. This was the one that was first reported in the UK and caused countries to stop allowing travel from the UK before Christmas. Experts suggest that the new strain of the virus is probably much more widespread already and there will be many cases in the US as well as other countries around the world.
Despite this, the markets don’t seem too concerned. US stocks are at highs and I think the focus in the markets is mainly going to be on the recovery for now.
For example, just today the UK has become the first country to approve the AstraZeneca and Oxford University vaccine. That is a big step for recovery, because this vaccine is a better alternative to the other one that was approved, since it only needs to be stored in refrigerators and doesn’t need to be frozen, which means storage and distribution is quicker and easier.
UK stocks and the pound were moving higher this morning. This may also be partly to do with the fact that Brexit is about to be voted on and likely to be approved in the House of Commons at 2.30 today.
But there is a downside to the vaccines. Yesterday Joe Biden was complaining that the rollout of the vaccine in the US, is behind the curve and taking too long. He has promised he will help speed things up.
I don’t think this is of much consequence to the markets. After he is sworn in, the rhetoric will change and it’ll all be about how swiftly they’re getting the vaccine distributed and so on. That’s just politics. So that means, all the language we can expect will be about recovery and that should be good for the markets. Along with that, Americans are starting to get their stimulus checks today and there’s a slight chance it may even be increased to $2000. Either way, that will affect markets positively.
So I think right now, in terms of the markets at least, the good news is outweighing the bad and we’re heading into the new year on a positive note