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Wall Street hedges against possible bumps in US vaccine deployment by Reuters

© Reuters. File Photo: A man walking on Wall Street during a coronavirus outbreak in New York wears a protective mask.


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New York (Reuters)-Wall Street’s “Fear Gauge” futures contract hits surprise glitches on US deployment of COVID-19 vaccine as US stocks hit record highs It indicates that you are purchasing insurance against the market turmoil that may occur if given.

This hedge can be seen on the Cboe Volatility Index futures, which expires after March, and is trading well above the current level of the index.

Even though Nasdaq and small caps hit record highs this week, deployment uncertainty also helped keep the “fear gauge” above the long-term average by nearly 20.

Investors said he would watch how President Joe Biden could approach his goal of giving 100 million doses of vaccine during the first 100 days of his term. On Thursday, he signed an executive order aimed at expanding testing and vaccination.

Stacy Gilbert, Derivatives Portfolio Manager at Glenmede Investment Management, said: “For the next 100 days or so, the focus will be on vaccine deployment and employment.” If it fails, it can potentially have a negative impact on the market. “

The breakthroughs in the COVID-19 vaccine and the assumption that life will return to normal by the summer boosted the S & P 500, rising more than 70% from its March lows.

Equities of banks, small caps and other companies have been repulsed to benefit most from the resumption of the economy.

Turn has fallen since March, when US stocks surged to a record high of 82.69 after years of modest volatility. Large-scale monetary and fiscal stimulus measures have helped to curb the gauge of fear, as well as optimism for economic recovery.

However, failure to meet vaccination goals could increase investor claims to make a profit and increase market volatility. A fund manager in a recent BofA Global Research study cited potential vaccine distribution issues as the market’s largest “tail risk.” This is an event that can cause serious disruption to asset prices.

“I don’t think we can put off virus-related risks,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management. “There is a lot of good news that has been priced on the market this year.”

Some investors are trying to take advantage of high volatility expectations while preparing for possible future turmoil.

Arnim Holzer, Macro and Correlation Defense Strategist at EAB Investment Group, offers February call options Barclays (LON :) iPath Series B Short Term Futures ETN, a note traded on the exchange associated with VIX while purchasing a March call option with the same ETN. VXX call options are often used to prevent increased volatility.

Bio will need to complete vaccination of the highest priority groups by the beginning of the second quarter and establish access to the general public by the end of June for a major resumption this summer. Technology analyst Matthew Harrison said. Morgan Stanley (NYSE :).

“Most of the questions that came in were about the pace of deployment,” he said. “It’s clear that investors are trying to understand what the impact is.”

In the United States, approximately 15.1 million people receive at least one COVID-19 vaccine. This is below the goal of former President Donald Trump to vaccinate 20 million Americans by the end of 2020.

According to the Centers for Disease Control and Prevention, the total number of deaths from COVID-19 in the United States exceeds 400,000.

Brad McMillan, Chief Investment Officer of the Commonwealth Financial Network, has been patient for now.

“It’s a rockier road than I expected, but I thought it would be difficult for anyone who really thinks about it,” he said. Still, he added, “if the vaccine doesn’t really work by the end of the month … the market may start to worry.”

Wall Street hedges against possible bumps in US vaccine deployment by Reuters Wall Street hedges against possible bumps in US vaccine deployment by Reuters

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