Key Points

  • A COVID-19 vaccine could start being administered globally this week.

  • The planned rollout is good news that has lifted the stock markets around the world. But the reality of the rollout faces risks that could extend the time frame for mass immunizations.

  • We expect markets to be volatile in coming months while the threat of new lockdowns weighs against the hope of recovery, although we believe we may be on the verge of a period of international stock market outperformance.

U.K. Prime Minister Johnson said the Pfizer/BioNTech vaccine should start being administered this week now that it’s been approved for emergency use and the first doses from Europe have arrived. The U.S. isn’t far behind with the Food and Drug Administration set to meet on December 10 to discuss the vaccine. Canada’s regulators have also indicated that they are close to approval. Submissions for approval of Pfizer’s vaccine have taken place in Europe, Australia, and Japan, with plans to submit applications to other regulatory agencies around the world. Moderna’s vaccine is expected to be reviewed in the U.S. this month and AstraZeneca’s vaccine could be reviewed late December/early January in the U.K. Russia said more than 2 million doses of its Sputnik V vaccine will be ready for use this week. A vaccination could be the best holiday gift imaginable for many people – even though relatively few will be able to get the first shot before the end of the year.

Hopes of a vaccine-led economic recovery in 2021 have propelled global stocks to new records. Let’s take a look at what the rollout may mean for investors.

Who gets it and when

The U.K. and U.S. are likely the first developed market economies to have access to the COVID-19 vaccine. Initial supplies are limited, so guidelines prioritizing who may have access have been issued. Guidelines for priority vary by country (and by state in the U.S.), but in general, the initial doses will be given to health care workers, the elderly living in health care facilities and their caregivers. Subsequent doses will go to high-risk individuals, followed by essential workers. Only after these categories of people have been vaccinated will the vaccine begin to be administered to the general population. Availability of vaccine supplies will initially be a limiting factor.