March 2021 / VIDEO
U.S. Vaccine News Driving The Stock Market Rally
Optimism about the rollout of vaccines in the US explains, in part, why the market has continued to rally.
A lot of investors these days are asking themselves, why has the stock market continued to rally over the last few months?
It’s almost human nature to focus on the negative side of the news. But the reality is we’ve had USD 25 trillion in global stimulus across monetary and fiscal measures.
Also, the news on the vaccines have been really, really good. We track a probability that’s published by a group called the Superforecasters.1 They estimate the probability that we will get enough doses to inoculate 200 million people in the U.S. by July of this year. That probability back in November before the Pfizer announcement was about 10%. If you track it over time, you’ll see even as recently as January it dipped below 20%.
Right now, that probability is at 99%. So the news on the vaccines has been really good. And that explains, in part, why the market has continued to rally.
It is a race between vaccinations and new strains of the virus. At this point, our base case is that vaccinations will win the race.
And we remain positioned for the recovery trade. We have added to value stocks, we have added to small cap stocks, and we have added for example within fixed income to our bank loans position.
This material is being furnished for general informational and/or marketing purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, nor is it intended to serve as the primary basis for an investment decision. Prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.
The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.
Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.
The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request.
It is not intended for distribution to retail investors in any jurisdiction.