Looking for a vaccination booster

The mediocre performance of the NZX50 index has been well canvassed in mid-year reports, but what about the rest of the world?

“The two regions that have performed well are Europe . . . and the US,” says Pie Funds chief executive Mike Taylor. In the year to July 5, Wall Street’s S&P500 index returned an impressive 17.6 per cent. In Europe, France’s CAC40 wasn’t far behind, up 17.5 per cent.

That compares with Japan’s Nikkei 225, up just 4.9 per cent; the NZX50, down 4.2 per cent; and China’s CSI300, down 3.5 per cent.

One trend that seemed to be emerging was that countries which locked down harder and had more initial success eliminating the Covid19 vitus were seeing markets lag this year, Taylor said.

“Perhaps it’s coincidence. But certainly there is quite a difference between those that closed off their economies versus those that are open.” It was possible the more Covid-hit economies had received relatively more stimulus and continued to do so, he said.

“If you look at the US, there are people who are still getting stimulus cheques at the moment.”

But markets “don’t keep rising forever in a straight line,” Taylor warned. “A correction is due at some point.”

The best place to look for data right now was Britain, which had seen cases rise as a result of the new variant. So far, though, it had been younger unvaccinated people getting infected, meaning lower rates of hospital admissions and deaths.

“What that effectively means is that the vaccine does work,” Taylor said.

That suggested that, from a market view at least, Covid should fade as a concern when about 70 to 80 per cent of the population was vaccinated.

The Market Watch video show is produced in association with Pie Funds.