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), Amazon.com (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.