LOUISVILLE, Ky. — America is becoming closer to getting a vaccine for the coronavirus with four U.S, companies now in Phase 3 clinical trials.
The creation of a vaccine will have a big impact on the financial market in the fourth quarter.
Since the low points in the equity markets back in March, Kelly Buckley, the managing principal at Spectrum Financial Alliance said the economy has been on the comeback trail.
“It has been extraordinary to see the economy reawakening as quickly as it has especially with the impediments that have been put in the way,” he said.
Buckley says the economy is in a V-shaped recovery. It’s a type of economic recession and recovery that resembles a “V” shape in charting. It involves a sharp rise back to a previous peak after a sharp decline.
Buckley said a large part of the recovery will hinge on a vaccine. Economic analysts are following the progress five vaccines have made in clinical trials.
He says a vaccine will bolster consumer confidence and that will in turn propel the equity markets and economy.
“The vaccine is key to getting economy back on track because it lowers the fear,” said Buckley. "But during times of high fear in pretty much any market environment we’ve seen in the history of our country, that’s where your biggest next quarter or year of returns tend to come,” he added.
He said projections from both the Atlanta Fed and statistics from the Bureau of Labor Statistics provide promising numbers.
“If you look at the bureau of labor statistics numbers, every month since unemployment peaked in April at 14.7 percent, the unemployment fall has exceeded expectations,” he said.
He said that the strong state of the U.S. economy before the pandemic allowed it to act as a buffer. Buckley said that analysts are projecting a strong 4th quarter depending on what happens with the last stage of stimulus and the status of a vaccine.
“We could easily end up with gross domestic product at the end of this year in the positive range and unemployment close to the all-time low, just depends what happens with this last stage of stimulus and what happens with vaccine this month or November.”
Buckley encourages people who can reenter the market. He says he expects portfolios that were hardest hit like the hospitality, airlines, and restaurant to provide some of the best rates of return.
Spectrum Financial Alliance is not affiliated with Spectrum News 1.