Every Friday, Brian Jacobsen provides perspective on key events and topics of the current week and his thoughts about what the week ahead may hold. Here’s his report for the week of November 14–20, 2020.
The week that was
Once again, the week started with a pop higher for equities on the news of the efficacy of a vaccine treatment.
- Moderna Inc. said its COVID-19 vaccine candidate is 94.5% effective. Pfizer Inc. and BioNTech SE said their vaccine is 90% effective, but it requires being stored at -94 degrees Fahrenheit, which isn’t something a lot of hospitals or clinics could currently support. Moderna’s vaccine can be stored at standard refrigerator temperatures for 30 days. On Friday, Pfizer applied for an emergency-use authorization so that its vaccine can get rolled out possibly by mid-December.
- The University of Oxford and AstraZeneca plc should be releasing their vaccine’s trial results in the next few weeks. Their preliminary results indicate elderly recipients had a strong and favorable immune response to the shot.
- Also allaying some fears about what happens between now and when the vaccines become available: Two of President-Elect Biden’s COVID-19 advisors said the incoming Biden administration is not considering a nationwide lockdown to deal with the spread of COVID-19. They said a more targeted and localized approach is viewed as better because dealing with the spread requires balancing many risks, including the economic impacts of lockdowns and the public’s growing fatigue of dealing with the pandemic.
- More states and localities announced COVID-19 restrictions. California imposed a 10 p.m. curfew. New York City moved schools to online-only as of Thursday.
- Treasury Secretary Mnuchin said he will not renew a few emergency lending programs set up in conjunction with the Federal Reserve (Fed). He said he hopes the $455 billion allocated for these programs that hasn’t yet been spent can be reallocated by Congress to extend unemployment insurance, provide more grant money to small businesses, and support households. The money was originally appropriated by Congress as part of the CARES Act, but much of the money hasn’t been spent. The Fed protested Mnuchin’s move, saying the programs are important backstops.
- Fed Chair Powell spoke at a conference. He didn’t say much that was new, but he did mention the latest vaccine news. Throughout this whole pandemic crisis, he has been saying that the path of the recovery will depend on containing the virus. Even with the vaccine news, Powell said there’s still a long and winding road to full recovery.
- For the week ending November 14, U.S. initial jobless claims under traditional state programs rose, but it looks like it was due to a big increase in filings from Louisiana. For the week ending November 7, continuing claims (those who received benefits for more than just one week) fell 429,000, to 6.372 million. At the end of October, there were 20,319,615 people collecting benefits under the various state and federal programs. A year prior, there were 1,476,521 people collecting benefits.
- The U.S. Senate went into recess for Thanksgiving, making no progress on two important issues that remain for this session of Congress: funding the government past the expiration of the continuing resolution that ends December 11 and stimulus talks to figure out what happens on December 26 when extended unemployment benefits expire.
- Brexit talks seemed to be going well with hopes of a deal forthcoming within the next few weeks, but the talks were canceled after one of the negotiators tested positive for COVID-19.
- Judy Shelton’s nomination to the Fed was put on ice after she failed to gather enough support in the Senate.
- The U.S., Australia, New Zealand, Canada, and the U.K. sent a letter to China asking officials to let the prodemocracy lawmakers from Hong Kong serve in Parliament.
The week to come
- Thursday is Thanksgiving. Even in 2020 we have plenty to be thankful for.
- On Monday, we get a flood of purchasing manager index readings. These will help gauge the effect of renewed restrictions on economic activity.
- On Wednesday, we get U.S. durable goods orders for October, initial jobless claims, new-home sales for October, and personal income/spending data for October. It should be plenty of data to chew on over the holiday.
Thanks for reading, stay informed!
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