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Good Morning. It's V-Day in the UK: the first national rollout of a clinically-tested COVID-19 vaccine is underway. The reaction of the markets? A big yawn.
Pfizer, one of the manufacturers of the vaccine, is flat in pre-market trading. Elsewhere, European and Asian exchanges are mostly lower, as are US futures.
Let's see what's going on right now.
- The mayor Asia indices are slightly lower in afternoon trading with Japan Nikkei Low 0.3%.
- Investors are optimistic Asian assets go to the last weeks of 2020. According to Bloomberg, the MSCI Asia Pacific Index hit record territory last week and bonds are also approaching their multi-year high.
- On Monday the US House of RepresentativesA bill was passed that would give Hong Kong residents special refugee status Live and work in the United States as Beijing-Hong Kong tensions become a bigger geopolitical problem. Meanwhile more US sanctions Loom for Chinese officials.
- Brexit jitter is a burden European stock exchanges again this morning. The Stoxx Europe 600 is down 0.2% Hours in the trading session.
- This morning a 90-year-old woman received the first Pfizer BioNTech in Coventry, England COVID vaccine shot in Great Britain a rollout that is being followed worldwide. It's hardly a shot in the arm for the markets. The Pound Sterling is down and the FTSE is flat.
- COVID, schm-OVID. 2020 was a banner year for the European tech startup scene, and all venture investing is imminent $ 41 billion until the end of the year.
- US futures are lower after the Dow and S&P 500 started the week in the red; the Nasdaq pushed higher on Monday.
- About Technologies fell 1.9% yesterday after announcing it had sold its self-driving car Unity to Aurora Innovation, effectively get out of business. It did, however, require an investment in the company that included Aurora rated $ 10 billion.
- waterCalifornia water, in particular, is the newest tradable asset. The precious good made its own Wall Street debut on Monday so investors can bet on the ups and downs of this life-giving essence. Can clean air futures be that far behind?
- gold is on, trade is close $ 1,870 / ounce.
- The dollar is flat.
- Raw is down with Brent Futures trade around $ 48 / barrel.
- Bitcoin is down, trade around $ 19,100.
The almighty consumer
Would you prefer to live in a country with high national debt but low household debt? Or the other way around – a place with low national debt but highly indebted households?
From the 1980s to about a decade ago, US household debt reached insane extremes. Just as the housing bubble peaked, US household debt reached 130% of disposable income. The bubble burst and the Americans became more economical.
Something similar happened after COVID: Household debt has plummeted, as today's graph courtesy of Morgan Stanley shows.
"A unique feature of the current recession," writes Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, "is that consumers have not bugged their credit cards but have paid off debts, particularly in relation to disposable income and net worth." In fact, current readings are the lowest since the late 1980s and nearly 50 percentage points lower than at the worst of the global financial crisis. "
"This suggests that the introduction of vaccines could easily drive demand for consumer services," she continues.
That would be a good sign for some of the worst-hit investment sectors in the coming year. This includes travel and leisure as well as energy and finances when people book trips, eat out and get moving again.
This explains a lot of the reasoning behind why value stocks (banking and energy in particular) have been booming in recent weeks.
To borrow a phrase from the world of VC and private equity, American households have plenty of dry powder on their way into 2021.
I wish everyone a pleasant day. I'll see you here tomorrow.
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