A Look Into the Markets-Thanksgiving 2020

Dated: November 23 2020

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A Look Into the Markets-Thanksgiving 2020

Stocks, bonds and rates are responding to the tug-of-war playing out between vaccine hopes and the rise in COVID-19 cases, along with additional lockdowns. 

Pfizer was out this past week saying its vaccine has a 95% effectiveness rate.  Moreover, the firm says they will have 50 million doses available before year-end and as much as 1.3 billion doses available in 2021.  On top of this, Moderna has a very effective vaccine and there are dozens of firms ready to deliver additional doses and therapeutics.

Stocks and rates have moved higher because both are forward-looking.  Yes, the rise in cases and hospitalizations is a concern, but at the moment the markets are looking four to six months down the road and there is hope that with a high vaccination rate we can return back to normal sometime in 2021. 

Home Builders—Very Bullish

Single-family housing stats showed the highest reading since 2007!  Historically low interest rates and shifting demand to move to the suburbs are the drivers.  The main challenge for builders is keeping up with the demand.  Available lots and decreased availability of supplies are headwinds for builders.  One thing is for sure:  If land and materials are scarce, expect new home prices, currently averaging $326,000, to continue to climb. 

Bottom line:  Rates hit historic lows this past week, as reported by Freddie Mac.  With a vaccine and the possibility of more stimulus on the way, it may be difficult to see rates improve much, if at all.  If you or someone you know would like to talk about the incredible opportunity, please contact us. 

Looking Ahead

In addition to tracking the aforementioned tug-of-war, Thanksgiving’s shortened week brings durable goods, GDP, PCE and another huge round of treasury supply (which has been pressuring treasury yields higher).  In a holiday week, we sometimes see extraordinary market turbulence-stay tuned.  

 

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John Lick

John Lick--brings his vast experience in contracts and negotiations to the Maurice & Lick team. Prior to becoming a full-time Realtor, he worked for a multi-billion dollar government agency and with ....

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