The first and strongest reaction is observed in the stock markets
Investors have begun to move their flows towards cyclical growth stocks, the most affected by the pandemic crisis.
This movement was already expected in the market for different reasons, the victory of Biden and the greater probability that a fiscal stimulus package approved in the United States would have been the catalyst for this movement, but the cause has been another and not expected, the imminent announcement of a vaccine against the disease.
There are still many points to solve in terms of logistics and distribution of the vaccine in the world. The effectiveness of the vaccine needs to be confirmed in a smaller number of participants in the Phase III trial. Still, everything points to the fact that we are facing better news that could be expected for the market and the population in general.
The most benefited indices have been the Dowjones30 in the United States and peripheral countries in Europe, such as Ibex35.
They are the indices with the greatest composition of cyclical stocks and have suffered the most from the negative consequences of social distancing and lockdown measures.
The Spanish index rose between yesterday and today over a spectacular 10%, with particular relevance in the stocks of banks that, like Santander, have risen from yesterday an impressive 25%.
If the good news about the vaccine is confirmed and with the excellent outlook represented by the package of financial aid from the European Commission of which Spain is one of its greatest beneficiaries, this phenomenal upward recovery movement could be just the beginning of a return towards levels close to the beginning of the crisis.
In the case of banks, we must also consider the more than possible monetary policy measures that the ECB will take at the beginning of the next month and that if they focus on the expansion of the TLTRO's would be an additional boost to these stocks.
In the case of Banco Santander, the level to watch is at 2.59, above which it makes its way to pre-crisis levels without any intermediate resistance.
Another critical movement has been the outflows of the North American treasuries positioned in search of refuge. This has caused the yields of these assets to rise, reaching 0.95 in the case of the 10-year American bond, a movement that has precipitated a fall in the price of Gold, which, as we all know, benefits from low real interest rates.
However, despite the enormous volatility in this asset, the sudden sell movement has not managed to go below its main support level at $1,850. The fundamentals in favor of the precious metal remain accurate and technical analysis confirms this as long as it does not go below these levels.