Will the Covid-19 vaccine change the long-term trends?

The market reaction over the past 48 hours beg the question whether many of the assumptions among investors are wrong and whether many “obvious” trades will reverse over a longer period. If one zooms out the Covid-19 and the vaccine news could suddenly give the impression that technology stocks are not worth owning any longer. But looking at it from a longer time perspective US technology stocks have had explosive earnings growth since 2009 while also being more immune to crises such as the euro area crisis in 2011-2012, emerging markets and USD in 2015, and lately Covid-19. This long-term trend will not change because of a vaccine and thus investors will likely revert to the same conclusion which is that this is the fastest growing segment of the market and where the future lies. We remain positive and overweight the technology segment and still sceptical of European equities still dominated by financials. The key risk to our positive view on technology stocks over the next year is rising interest rates which will have larger negative impact on growth stocks than value stocks.

In the short-term a lot views will LAO be updated for the travel and leisure segment across the world. The table below shows the general positive price action today in Europe across this hard-hit segment. Due to the vaccine uncertainty in terms of safety and delivery this segment will likely experience a lot of volatility in the coming months providing excellent trading opportunities.

The chart below is for regulatory purposes