Goldman Sachs says that the approval of the coronavirus vaccine could upend markets

Goldman Sachs says that the approval of the coronavirus vaccine could upend markets

According to Goldman Sachs Group Inc.’s (GS) analysts, investors should consider the risk of a successful coronavirus vaccine that could upend markets by using different strategies including sell-off in bonds and rotation out of technology stocks into growth-linked cyclical stocks.

“This kind of timeline could see a substantial boost to GDP [gross domestic product] relative to a ‘no-vaccine’ case, particularly for the U.S., which is likely to lead the vaccine race and is likely to experience worse outcomes than in Europe without a vaccine,” Goldman Sachs’s strategists said on Thursday.

Shares of Apple Inc. (AAPL.O), Facebook Inc. (FB.O), (AMZN.O), and Alphabet Inc. (GOOGL.O) surged this year and reached a 5% stock market value of the S&P 500’s (.SPX).

“On these estimates, options markets may be underpricing the fatness of both ‘tails,’ especially the upside case. Out-of-the-money call options on the S&P 500 (and some other indices) still look attractively priced, given our view of the vaccine timeline outcomes,” they added.

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