Article Hero

Markets look for a cure, pharma companies postpone it – Market Overview

1602596736.jpg
Miguel A. Rodriguez
Miguel A. Rodriguez
05 November 2022
The only negative aspect that could lead to a reversal of this positive sentiment, would come from a lack of progress in the vaccine against the epidemic, and it has happened.

As we pointed out in yesterday's analysis, the market has chosen to contribute to a scenario of optimistic risk sentiment.

After accepting a discounted Democratic victory in the American elections, the markets will probably receive a fiscal stimulus package of relevant size, ignoring the tug of war in the negotiations on Brexit, despite the enormous danger that the British economy would run in the event of a hard Brexit. Now, the lockdown in European capitals has been positively valued, considering that they anticipate a quick exit from the pandemic.

Postponing the cure 

Johnson & Johnson has surprised the market by announcing a pause in its vaccine testing process because there have been side effects that they cannot identify.

Now, only this information is known, but the market will be very attentive to both this news and other similarities that may be announced. If the existence of problems in this race is confirmed and all the originally foreseen terms are delayed, the market could begin to shift risk sentiment towards risk-off.

The market reaction has been negative in both the main European and North American stock indices, although today's movement only represents a correction of yesterday's gains. In the case of Germany30, the falls have been accentuated with a bad data from the German ZEW Economic Sentiment that fell to $56.1 in the month of October from 73 the previous month.

US Dollar takes cautious steps

The US dollar has returned to its status as a safe haven currency and has strengthened in general terms – especially against the Australian dollar, which, as we know, is a currency linked to commodities and therefore more sensitive to market risk sentiment.

AUD/USD started a downward corrective movement from mid-September but has yet to confirm a change in trend. It would need to pierce the 0.7050- 0.7100 zone in the first term, for the bearish momentum to intensify. If it occurs, it would be the consequence of an increase in risk aversion in the market or of greater uncertainty about the creation of a vaccine in the short term.

This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

Share this article

How did you find this article?

Awful
Ok
Great
Awesome

Read More

Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.