While the two-hit combo of a Joe Biden election win and news of a potential COVID-19 vaccine have given the markets a shot in the arm, an expert is warning there's still plenty of pain ahead for workers.
Biden has promised to take the pandemic more seriously than his predecessor Donald Trump, which leading economist Jeffrey Sachs told The AM Show on Wednesday was a "prerequisite for an economic recovery".
That, and reports a vaccine developed by pharma giants Pfizer and BioNTech has 90 percent efficacy, sent the Dow Jones and our own NZX skyrocketing.
"These two issues are two things that have really plagued investors' minds over the last six months," Milford Asset Management portfolio manager Mark Riggall told The AM Show on Thursday.
"US election we've got certainty - we think - on the outcome; but the vaccine, now we know there's an effective vaccine out there... That certainty gives a green light to investors and we can really think about, at what point might the world look a little bit like where we were last year?"
While the markets reacted in unison to Biden's win, the vaccine news wasn't good news for the tech-heavy NASDAQ index.
"We know the pandemic created lots of winners and losers - that's been upended to a certain extent by the vaccine news," said Riggall. "Take a company like Zoom - does video conferencing, a beneficiary from working at home - well that stock was down 17 percent on the vaccine announcement."
Since Wednesday's peak, the Dow Jones has regressed a little, while the NASDAQ has recovered some - but not all - of its losses. Riggall says after the initial "euphoria", reality might have set in.
"It's very exciting news obviously, but there's a long way to go before we get through this still. There's lots of questions we still need answers to - how long will it take to deploy this vaccine? Will people get vaccinated if their governments recommends them to? How long will immunity be provided for by any vaccine - are you going to need top-ups?"
And while 2021 might not be looking so gloomy as it did a month or two back, it's still not going to be easy - particularly for workers whose jobs are at risk, with governments perhaps less willing to dump the kinds of money spent on wage subsidies in 2020.
"Unemployment is going to remain high. Even though we've got a vaccine now and will start to be deployed in the next few months, it's going to take a long time for the vaccine to be deployed to the whole world and we can get back to behaving like we were last year.
"Economies are going to struggle, there is still going to be unemployment and we don't know how willing governments around the world are going to be to plug the gap in the same way they've done it this year - that fiscal support. They know the vaccine's coming, they've already spent a lot of money - how much more money are they going to spend if they know, in six months' time, they don't have to do that anymore."
Pfizer's vaccine isn't an easy one to deploy, requiring temperatures of -70C. Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases, says it will be a challenge even in wealthy countries like the US and UK - let alone the developing world.
Despite the struggles for employees, he expects investors to do OK, with Trump's Republican Party maintaining control of the Senate.
"It wasn't a blue sweep - it doesn't look like [Biden's] going to get all three branches of government in the US so he's not going to enact his market-unfriendly policies of raising corporation tax and raising minimum wages... It's the certainty investors like, plus the fact gridlock is a good outcome for companies. "
