(Drivebycuriosity) - It`s Easter again. The world is still struggling with the Covid-19 pandemic and a third wave is rolling in Europe, India & Latin America. But the situation is much better than at Easter 2020. A bunch of biotech and pharma companies created independently a set of vaccines. Today exist vaccines by Moderna, Pfizer-BioNTech, AstraZenneca, Johnson & Johnson, China`s Sinvac and the Russian Sputnik V. Some are traditional, based on castrated viruses, other are based on the revolutionary mRNA technology, created by Biotechnology. The mRNA vaccines by Moderna & Pifzer, which are used in the US, are highly effective.
The vaccine roll out goes surprisingly fast. Great Britain already vaccinated 46% of their population with the first dose, the US 30%, the European Union lags with about 13%. It looks like that by summer the majorities in Europe, US & Asia & will be vaccinated and the pandemic will come to an end.
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The
US stock market anticipated the nearing return to normality. On Thursday the S&P 500, the gauge for the US stock
market, rallied to a new record level and closed above 4, 000 points,
the first time in history. The rally is fueled by a massive pent up demand,
extremely low interest rates and giant government spending. Many are sitting
on huge savings, enforced by the stay-at-home situation, and can`t wait to travel, to shop and to party again. The freed consumer spending will happen like a breach in a dike.
(source )
But much more important - and sustainable - are the tailwinds from the accelerating technological revolution which got boosted by the Covid-19 crisis. Maybe the pandemic started a new Roaring Twenties, comparable to the boom phase which happened during the 1920s years after the Spanish Flu.
The current pandemic accelerated the fundamental trends that have been shaping economy & society in the recent decade. In the recent months the rise of the Internet gained even more speed and turned into a great leap. Covid-19 reduced the resistance against technological progress (faz.net ). The pandemic forced many people to work, learn, shop, educate & entertain themselves from home which is fostering digitization and raising efficiency & productivity of the economy.
The virus boosts the digitization process, which is fostering productivity across all industries, leading to more economic growth. Microsoft`s CEO Satya Nadella said "the pandemic has proven the PC’s central role in keeping people connected, productive, and secure ...What we are witnessing is the dawn of a second wave of digital transformation sweeping every company and every industry" (transcript ). Last year Nadella noticed that “two years of digital transformation took place in two months” ( microsoft ).
Online sales worldwide are surging, more people are working from home, they are binge watching Netflix & Amazon Prime, listening via Spotify, reading Kindle books, surfing Facebook & Twitter and businesses are running more & more on cloud computing. Home office & remote learning are raising productivity of the whole economy because many people spend less time with commuting.
Not
only consumers changed their behavior, companies were forced to adapt as well. We are
witnessing an accelerated shift toward digital technologies that are
faster, less expensive, more productive and raise creativity. Companies
are compelled to streamline operations and they are using more &
more Internet & and other software applications to get more
efficient, creative & productive. The pandemic forced them to get
faster and make their products & services cheaper and more
convenient. These changes are accelerating the ongoing digitization
process, using Internet and other software applications more intensely.
The CEO of Bill.com, an online service, said: "We believe the ongoing
pandemic has accelerated the need for businesses to focus on digital
transformation” (seekingalpha).
Covid-19 made the companies much fitter and more efficient than before which translate into climbing profits. I believe that this learning process will continue and will fuel a long term trend of rising company profits & stock markets.
Happy Easter!
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