Vaccine--Coming, Elections--Wait and See

In what may be the most important news of the past week--and that's saying something--the stock market averages increased sharply this morning after the announcement that a vaccine with greater than 90% effectiveness has been developed and that it could be distributed as early as this month.

A vaccine developed by Pfizer Inc. PFE +11.87% and partner BioNTech SE proved better than expected at protecting people from Covid-19 in a pivotal study, a milestone in the hunt for shots that can stop the global pandemic.

The vaccine proved to be more than 90% effective in the first 94 subjects who were infected by the new coronavirus and developed at least one symptom, the companies said Monday.

As of 10 a.m. EST the indexes are up 8% over the past week. The travel and leisure cohort, especially the airlines, are seeing 20% pops. Meanwhile, the stay-at-home winners (Zoom, Netflix) fell back this morning.

Some commentators (WSJ, Yahoo News) also attribute today's bounce to the consensus forming around a Biden victory. IMHO, that's only a small factor because the recounts and legal battles have another month to go. While Mr. Biden is likely to prevail, some reports of fraud from cities in battleground states do seem worthy of investigation, so we'll wait and see.