Investors woke up to the news that Eli Lilly’s drug to treat Covid-19 had been officially approved by the FDA. This headline comes on the heels of Monday’s promising results from a Phase 3 trial of a Pfizer vaccine, which could begin distribution later this month.
These are GAME CHANGERS and the market welcomed their arrival.
The question now — how long will the newfound optimism last?
At present, there are also significant political headwinds to consider. This election was not the immediate answer the markets would prefer. Senate Majority Leader Mitch McConnell is quoted saying that the President was, “100% within his rights” to legally challenge the results. This, as Attorney General William Barr authorizes prosecutors to pursue allegations of voting irregularities.
Meanwhile, what might a Biden presidency even look like come late January? Small business owners are growing increasingly worried that Biden, like Bill deBlasio in New York City, will have a heavy hand and force businesses to shut down this winter until the virus can be better mitigated. Biden has already tweeted out the need for a mask mandate, and though it’s not constitutionally viable, has indicated that he will pressure local leaders to make it the law in their respective communities.
If the economy shuts down, again?
All bets are off. Any recent market gains would falter considerably. Meanwhile, I am not confident that Biden and his team have the economic policy chops to see us through an additional downturn. Part of the economy’s recent success, emerging from the coronavirus slump with 33.1% annualized growth in the second quarter, was the result of sound policy: lower taxes, less regulation.
Biden and co., however, are promising the antithesis of the policies that have worked so brilliantly for our economy. Instead, they want higher taxation and more regulation.
It’s a recipe for disaster and this is NOT the time for any additional disasters.
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