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BlackRock strategists have improved on U.S. stocks, expecting an accelerated economic recovery in 2021.
Angela Weiss / Agence France-Presse / Getty Images
Positive vaccine developments give stocks a boost for the third Monday in a row.
This time it’s the AstraZeneca AZN,
and the Oxford University vaccine candidate, which has been shown to be up to 90% effective in preventing COVID-19 infections, according to late-stage trial data. The vaccine was 70% effective overall, but 90% effective when people first received a half dose and then a full dose, as opposed to two full doses, the university said.
With a lower efficiency rate than Pfizer PFE,
and Moderna mRNA,
Rival efforts, the British drugmaker’s shares fell on Monday. But the more practical requirements for temperature storage of the experimental vaccine and mass manufacture in several countries have produced widespread positive sentiment in the markets.
Lily: Pfizer’s COVID-19 vaccine 95% effective in end results
The shortened Thanksgiving holiday week appears to be off to a good start, but investors will be closely following a wave of U.S. economic data on Wednesday, as well as the surge in COVID-19 cases.
In our call of the day, BlackRock took US stocks overweight, but called for a “nuanced approach,” given the difficult winter ahead before the vaccine rollout potentially comes to the rescue in 2021.
The fund manager’s strategists recommended a ‘dumbbell’ strategy, favoring quality large-cap stocks over structural growth trends, such as technological dominance and sustainable assets, as well as smaller companies geared towards a possible cyclical recovery. .
The difficult months ahead in the United States and Europe have supported the case for the outperformance of large-cap tech and healthcare companies, they said. However, the prospects of an accelerated economic recovery in 2021 – amid positive vaccine developments – have favored more cyclical exposures, the strategists added.
“Should investors stick to quality – a recent and perennial winner – or look to reduced cyclical exposures?” asked Mike Pyle, chief investment strategist at BlackRock.
“We believe this is not an ‘one or the other’ issue – and advocate a more nuanced approach… quality companies that should outperform even if budget support disappoints; and some cyclical exposures that are likely to thrive as the schedule for widespread vaccine deployment advances, ”he added.
This balanced approach would give investors greater portfolio resilience, strategists said, as uncertainty around vaccine deployment and continued pandemic control remains high. The upgrade to U.S. equities and its higher share of quality companies was how strategists chose to gain exposure to structural growth, they noted.
BlackRock strategists have been more selective when it comes to cyclical exposures, favoring mid- and small-cap US companies, emerging market equities and Asian non-Japan equities. But they demoted European stocks to underweight, given Europe’s heavy exposure to financials, which are likely to come under pressure from low rates.
The steps
After posting a 0.7% loss last week, the Dow Jones Industrial Average DJIA,
was scheduled to open higher on Monday. Dow YM00 Futures,
were up 0.6%, up 170 points at the opening, while the S&P 500 ES00,
and Nasdaq NQ00 futures contracts,
also pointed out above. European stocks rose early in the session, as vaccine optimism continued to sweep the continent, with the Stoxx 600 SXXP index,
0.1% up and the German DAX DAX,
0.5% higher.
The buzz
The head of the US effort to produce a vaccine against the coronavirus said the first immunizations could take place on December 12. A Food and Drug Administration advisory committee is set to meet on December 10 to discuss Pfizer’s request for emergency use authorization for its development. Vaccine against covid19.
U.S. health officials on Saturday agreed to authorize the emergency use of a second antibody drug to help the immune system fight COVID-19, the REGN from biotech Regeneron,
cocktail of antibodies that President Donald Trump received last month.
Schrödinger SDGR,
shares jumped 6.5% in pre-market trading Monday as it announced a drug discovery deal with Bristol Myers Squibb BMY,
it could earn him up to $ 2.7 billion in milestone payments and royalties.
U.S. drug maker Merck has announced a deal to buy COVID-19 treatment developer Oncolmmune for an upfront payment of $ 425 million in cash.
President-elect Joe Biden is expected to nominate Antony Blinken as his candidate for secretary of state, Bloomberg News reported on Sunday evening.
British Prime Minister Boris Johnson has said England will revert to strict regional measures after the national lockdown ends on December 2. The four UK countries are also working on a plan to allow a number of households to come together over Christmas.
Random readings
ZM false zoom,
Invite crippled Australian hedge fund with a hit of $ 8 million.
Drone footage shows a hammerhead shark stalking a distraught swimmer.
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