All Things Market Related

 

By Shruti Yadav

 

The Australian Economy

Off to a slow start, the Australian economy contracted 0.3 per cent in 2019-20, according to figures released by the Australian Bureau of Statistics (ABS). Head of National Accounts at the ABS, Michael Smedes said: “Australia’s annual economic activity fell for the first time since 1990-91, the onset of the COVID-19 pandemic ended 28 years of consecutive growth”.

A fall in household consumption detracted 1.6 percentage points from GDP, recording the first annual fall since 1959-60. Private investment detracted 0.8 percentage points with reduced investment on dwellings and machinery and equipment. Public demand contributed 1.4 percentage points to growth, with ongoing spending on health and social services.

On the bright side, Victoria’s reopening roadmap is underway with now only one step away from Covid Normal. The last step is expected on 22nd November 2020. For more information on this click here.

Biden’s win surges the global markets

The Financial Markets have rallied up since Joe Biden’s victory in the U.S Presidential Elections. The FTSE 100 jumped 4.4% back to it’s 6000 mean in a long time since the pandemic.

The Nikkei rose by 2.12% reaching it’s highest since 1991, the HK shares rose 1.2% and the ASX 200 1.75%

The Biden Administration has proposed the following in their Stimulus plan:

  1. The Emergency Action Plan, which includes a number of steps to lift the economy from the COVID crisis.
  2. CARES Act that focuses on stimulus payments for eligible Americans and more unemployment benefits
  3. Heroes Act 2.0, which is like the CARES Act with slight differences

For more information on these refer to the below:

Joe Biden: The Biden Emergency Action Plan to Save The Economy

Stimulus package: How the new Heroes Act compares to the CARES Act from March

 

Talks around COVID Vaccination

Hopes rise as Pfizer and BioNTech create a vaccine that is 90% effective. Their vaccine has been tested on 43,500 people in six countries and no safety concerns have been raised.

The companies plan to apply for emergency approval to use the vaccine by the end of the month.

No vaccine has gone from the drawing board to being proven highly effective in such a short period of time.

This is part of the reason the stock markets skyrocketed on the 10th of November post the positive news.

The vaccine rally into Banks and Airline stocks is capturing the ‘back to normal life’ imaginations into the future stock prices. Companies like Walt Disney and Carnival Corp rocketed too as investors bet a vaccine may allow more vacationers to attend many amusement parks.

Manufacturing is already under way. Pfizer said they expect to supply globally up to 50m vaccine doses in 2020 and up to 1.3bn doses in 2021.

 

References:

ABS: Australian Economy contracted 0.3% in 2019/20

Hopes rise for end of pandemic as Pfizer says vaccine is 90% effective

Dow surges more than 800 points in biggest rally in 5 months after positive Pfizer vaccine news

This is everyone who can still claim a stimulus check from the IRS by Nov. 21