This past month has seen global equity markets deliver strong returns resulting from a combination of markets reacting positively to Joe Biden potentially becoming the president elect, although Donald Trump has made various allegations with regards to voter irregularity and voter fraud, vaccination news, and the prospect of large financial stimulus packages.

US political affairs

There is never a dull moment in US politics.

As the state results rolled in it became evident Joe Biden was triumphant and many people rejoiced, it did not take long before Donald Trump made claims and took legal action with voter irregularity and voter fraud.

While unlikely to overturn the result, it is important to note that democracy is not under threat and the avenues Donald Trump is pursuing are legitimate and ultimately, in the interests of transparency and openness along with what I imagine is his primary concern, his own personal interest.

Regardless of political affinity and the outcome, what is imperative is the truth is uncovered and it is determined whether Donald Trump had any basis for his concerns or if he will concede the presidential seat to Joe Biden.

Vaccination hopes

As with almost everything in life, you wait an eon for something and three come at once. This is no different to the coronavirus pandemic. We have been patiently awaiting a solution to the virus and the pharmaceutical industry looks to have delivered.

In a short space of time both Pfizer, working with NBiotech, and Moderna released optimistic results for a vaccine.

There are several key differences between Pfizer, Moderna & AstraZeneca, these differences could lead to a better outcome, globally and help move the Global restart push forward.

Pfizer – NBiotechModernaAstraZeneca
Efficacy Rate95%94.5%70%
Long-term storage-80C (research lab / hospital freezer)-20C (standard kitchen freezer)2 – 8C (standard refrigerator)
Short-term storageRefrigerated up to 5 daysRefrigerated up to 30 daysRefrigerated for at least six months
ShippingOn dry ice up to 15 daysStandard freezer trucksRefrigerated for at least six months
ProductionExpects 1.3B doses in 2021Expects 500M – 1B doses in 2021Expects 3B doses in 2021
Pricing$20 (c. £15) per dose$37 (c. £27) per dose$3 (c. £2.25) per dose

Source: (Daintree Wealth Management, 2020)

As suggested above, AstraZeneca have priced their COVID vaccine substantially lower than both Pfizer and Moderna, but why?

AstraZeneca’s vaccine is a part of Covax, a global initiative hoping to support low and middle-income countries. (World Health Organisation, 2020)

AstraZeneca confirmed in a statement, lower income countries would receive the vaccine on a non-profit basis. (AstraZeneca, 2020)

With a significant portion of the developed countries arranging agreements with Moderna & Pfizer in a clammer to be the first to restart their respective economies and AstraZeneca committed towards vaccinating lower- and middle-income countries, 2021 may be the year we can turn the page on COVID and move forward.

US large financial stimulus packages

This month sees the US making progress with their financial stimulus package.

A bipartisan group of US senators plan to unveil legislation this month for a financial stimulus package worth around $900 Billion to help restart the US economy.

Which falls between both the original proposals made by the Republican party and the Democratic party.

While full details have not been released at the time of writing, the proposal is expected to include:

R.C.E.P agreement

On November 15th, 15 countries came together to sign the Regional Comprehensive Economic Partnership (RCEP) agreement, those countries were:

BruneiLaosPhilippinesVietnamSouth Korea
IndonesiaMyanmarThailandJapanNew Zealand

As the agreement suggests, it is comprehensive in both coverage and depth of commitments, spanning 20 subjects and covering many rising sectors, including electronic commerce (e-commerce), SMEs, the deepening regional value chain.

The Peterson Institute for International Economics (PIIE) found that RCEP looks to significantly strengthen East Asia for several reasons including offsetting the negative effects of the US-China trade war and for unifying East Asian interdependence, raising trade among members by $428 Billion.

As one leading power (USA) stumbles to recover another ambition country (China) strengthens, it will be interesting to see how the power struggle continues over the coming years.

Side note: The full working paper from PIIE is interesting and covers many aspects of the benefits and downsides of the agreement, for those interested please feel free to contact me and I will send it across.

Reasons to be optimistic for 2021

2020 has been a testing year for many and we should all be proud of the resilience shown to push through. With one month left to go, it is important to look ahead and look for reasons to be hopeful in 2021.

As of the 8th December the U.K. has begun to distribute a COVID-19 vaccination, many developed countries are also on track to distribute a COVID-19 vaccination.

East Asia bolsters their position with a hopeful RCEP agreement, and the US looks to provide an expansive financial stimulus package with the hopes of recovering from coronavirus.

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Kindest regards,

Aidan Briggs
Head of Operations