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Mark O' Donnell
 · 
Research Analyst
December 8, 2020
 · 

S&P 500 – Vaccine pushing it to 4,000?

S&P 500 – Vaccine pushing it to 4,000?

Margaret Keenan. At 90 years old, she was the first patient in the United Kingdom to receive the Pfizer-BioNTech. The CEO of England’s NHS, Simon Stevens, stated that “I think there’s every chance that we will look back on [Tuesday] as marking a decisive point in the battle against the Coronavirus” You would have thought we should have seen a massive spike in the markets.

However, the market was relatively calm today, even though the S&P 500 broke all-time highs. Interestingly enough, the second person to get the Vaccine in the UK was an 81-year-old man called William Shakespeare.

S&P 500 at all time highs

Is the Vaccine going to push the S&P 500 over 4000?

Depends. Considering the muted response from the FTSE 100, only up around 0.052% on a catalyst that was said to bring a boost to asset prices, there’s a chance that the effects of a vaccine have already been priced in, and the market is looking for more. Turning to the currency markets, we can see some wobbles in the GBP/EUR pair, with the needs waiting on further confirmation on the Brexit negotiations.

Given that it is almost a given that the United States will be granted the Vaccine, there is a high chance that the effects of the Vaccine on the United States population would be priced in, given that the S&P 500 has reached all-time highs before the United States has even received the Vaccine. The markets may be looking for the United States to go back to a relatively normal before pushing the S&P 500 further past 4,000.

Retail traders may push S&P 500 past 4,000

Given the lockdowns worldwide, alongside easy access to trading environments such as Robinhood and Interactive Brokers, there has been a massive spike in the number of young retail traders on these platforms. Thomas Peterffy, the founder of Interactive Brokers, stated that the current environment is unlike anything he has ever seen before and that “Money is so easy, why not borrow what you can and put that it into stocks?” With this influx in retail, traders along may see the S&P 500 past 4,000.

Put the Vaccine catalyst, alongside American retail traders together, and we may see the S&P 500 breach 4,000 before 2021.

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