US covid cases show tentative signs of flattening, could help investors see glass half-full

0
  • US COVID-19 cases are showing tentative signs of flattening in the current winter wave. 
  • Markets are torn between promising vaccine news and grim reality. 
  • Signs of stability could help focus investors on the upbeat scenario.

Light at the end of the tunnel – Pfizer and BioNTech reported 95% efficacy in their coronavirus candidate, better than 90% initially reporting and topping rivals Moderna. The joint venture is set to ask authorization to begin inoculating the public shortly.

The cavalry – from these two efforts and others such as AstraZeneca and Johnson & Johnson – is on its way. However, production, storage, and distribution challenges mean a long road to the end of that tunnel. After the initial shot in the arm, markets looked back at grim reality.

COVID-19 cases continue rising in the northern hemisphere, hitting Europe, the US, and even Japan. Governors in various American states have begun introducing restrictions, following governments and regions in the old continent. The potential damage to economic activity – both from lockdowns and from consumer caution – is of concern.

Fear of “scarring” – long-term damage to the economy, are in play. In the US, lawmakers have yet to agree on a new fiscal relief package, leaving investors at the mercy of the virus development. Finally, there are some tentative signs that the surge seen from mid-October is hitting a standstill.

IFrame

A daily average of around 160,000 cases is still worrisome and implies hospitals and mortalities – which lag infections – are set to rise. Moreover, as every technical trader knows, this may be a mere consolidation of the uptrend rather than a change of course.

Nevertheless, a pause is better than an extension of an uptrend. Also, measures already implemented by various states could still push the curve down.

Seeing the chart above could encourage investors to see the glass as half full than half empty.

See What you need to know about the dollar in the post-vaccine announcement world

Get the 5 most predictable currency pairs

About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.