Only one thing can explain this month’s broad market movement
If you start with the assumption that a pandemic is not important to the markets – and this has not been the case for a year – then a comprehensive price measure and a macro picture do not make sense.
The talk of Fed’s policy error, bottlenecks, or anything else I’ve heard doesn’t go together. They are certainly unknown, but they are increasingly valued as bad results are more likely.
On the back, I was probably worried about the virus for too long. By that time last year, the market was increasingly averse to the virus. I grabbed it, but took some time to realize that the twin books of fiscal and monetary policy could eliminate covid-19 so completely.
I hope the Moderna chart above and its recent competition above only reflects the incredible power of MRNA technology. I hope that this will ultimately save many more lives than have been lost in a pandemic. I hope that this does not mean that other types of vaccines will be rendered virtually useless due to a combination of ineffectiveness, side effects and hesitation.
What worries me is that the message on this chart is ominous and fits like a hand in a market glove elsewhere – especially in bonds.
I hope – and I still believe – that economies will gain power through what is left of covid-19. That by vaccinating vulnerable people we become normal.
Maybe, however, it would be time to look a little deeper to be open to what the graphs said. For me, the only plausible answer, or at least the only thing to worry about, is that the feed is endemic. The fact that evolving variants will keep most of the world away from the virus forever by one step, leaving the world shriveled and fearful.
At the moment, this is still only a concern, but charts such as the delta variant that exploded in the Netherlands two weeks after its reopening can no longer be completely ignored.