An interesting situation is observed in the financial markets. Investors seem to ignore the continued negative impact of the COVID-19 pandemic. They are entirely focused on what they consider to be positive news. The first is the belief that Joe Biden won the presidential election, which means the economy will go back to before Trump’s state. The second news is the success of vaccine testing from Pfizer and BioNTech, which was announced a week ago.
But despite the desire to see Biden as the new president and his support from major media, there is a possibility of long-term problems.
In my opinion, the most crucial factor is the constitutional crisis in America. Even though the democratic media trumpets Biden’s victory at every corner, neither Trump nor his supporters are ready to give up and admit the loss. Litigation between presidential candidates is likely to drag on until early next year and perhaps even spill over into acts of civil disobedience, which could lead to another collapse in stock markets.
The next problem is that despite the new COVID-19 vaccine showed good trial results, it still has transportation issues and is far from mass production.
Despite the news described above, there is still a lot of negative on the market. The continuation of the frantic growth of COVID-19 cases forces countries to close businesses and introduce new quarantine measures that restrain economic activity in America and Europe.
In general, all that optimism that is still glimmering in the market can at any time be replaced by sales of company shares, and then everything will go round again.
What to expect soon:
I believe that the general picture of the markets will remain in the near future. High volatility will force stock indices to move sideways and only positive news will push the markets up again.