Week in a Glance: AstraZeneca, risky assets and NPP ahead

30 Nov 2020

Last week has traditionally started with the vaccine news. This time, AstraZeneca reported effectiveness of 70%, but for a half dose, that is, potentially by increasing the dose, it is possible to bring the effectiveness to 90% +. Why is AstraZeneca important? The fact is that this particular vaccine claims to be the most massive in the world. With a price of $ 4-5 per dose, as well as ease of distribution (you can store in an ordinary refrigerator), the AstraZeneca vaccine has the largest market capacity - about 4 billion doses worldwide.

That is why the financial markets perceived the information from AstraZeneca very positively. As a result, a massive exodus from safe haven assets to risky assets began. Bitcoin almost reached 20K, Musk became the richest person on the planet after Bezos, stock markets rushed to new all-time highs, greed level reached 92 out of 100 (CNN's Fear and Greed Index).

In our opinion, markets have traditionally passed off wishful thinking and tomorrow (which may not exist) as today. After some skepticism about the results from AstraZeneca surfaced, the company announced additional global testing. In general, it is worth recalling that the massive use of vaccines will not begin until the third quarter of 2021, which means that, given the planned seasonality of the pandemic, you should not expect a radical solution to the problem before summer.

So, the last week's gain is extremely unstable. Actually, losses in the cryptocurrency market on Thursday from 15% to 30% for various tokens confirm this. That is why our position is unchanged: we sell risky assets, as well as oil, and buy gold.

The coming week may be decisive for the oil market. OPEC + meets on Monday-Tuesday. Markets have already fully incorporated into the current price the fact that from January the voluntary production cuts will not change and instead of the planned 5.8 mln b/d it will remain at 7.7 mln b/d. The point is that the fact is not yet there.

In addition, statistics on the US labor market will be published at the end of the week. Given that November turned out to be an exceptionally pandemic month, there is every reason to expect weak data, which may remind financial markets that the present is not as cloudless as it seems to them.