Stock markets are “overthinking the positive vaccine news,” with stock markets soaring after drug firms Pfizer and BioNTech announced that their Covid-19 vaccine was 90% effective in tests, a leading financial advisor has warned.
Londons’ FTSE 100 soared 5.5% on Monday and Wall Street benchmark S&P 500 index was set to climb surge 3.9% when trading started Tuesday.
“The news is fuelling hope that economies around the world can soon return to normal and this is driving stock markets,” said Nigel Green, CEO of the financial advisory deVere Group.
“The vaccine development reports are, obviously, an important step in the right direction. However, I suspect the markets – which are already in a bullish mood due to the incoming Biden administration – are overthinking the positive vaccine news.
“They are being premature in their buoyancy,” warned deVere’s chief executive, adding that, “there’s a long road ahead still. We will find out on the third week of November then as we wait to see if the vaccine can be approved or not.”
Green cautioned that stocks, including beleaguered travel sector stocks amongst others, are soaring on the back of the news.
“But I would urge investors to remain optimistically cautious and avoid the ‘buy everything’ mindset,” he said.
“The world is still readjusting and many of the changes that have come about from the pandemic are unlikely to be reversed, including the workplace revolution in which more and more people are working from home.”
“An experienced fund manager will help investors seek those stocks most likely to generate and build their wealth sustainably over the long-term.”
The deVere CEO concluded that “investing over the long-term on stock markets remains, as ever, one of the best and proven ways to accumulate wealth.
“However, investors must remember not to be complacent, over-optimistic or premature when an upbeat mood takes over the markets.”