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Stock Market towards Vaccines


U.S. stocks gained after positive news on a COVID-19 vaccine, sending shares tied to an economic reopening higher while stay-at-home tech companies lagged behind. Oil jumped.

The Dow Jones Industrial Average and the S&P 500 Index were poised for record highs after Moderna Inc.'s vaccine was shown to be 94.5% effective in a preliminary analysis of a large late-stage clinical trial. Shares of the drugmaker surged as much as 15%.

Lockdown favorite Zoom Video Communications Inc. slumped along with some of the biggest tech names, weighing on the Nasdaq 100, while Delta Air Lines Inc. and Carnival Corp. gained.

The vaccine news adds yet another driver to a global stocks rotation into value and cyclical sectors that have been hardest hit by the pandemic, and out of more defensive industries like technology. U.S. equity futures were up earlier after advisers to President-elect Joe Biden said they opposed a nationwide shutdown despite surging virus cases.

“Today’s vaccine news should make investors more tolerant of the surging virus cases, permitting them to look through to the strong dynamics that seem to be taking shape for 2021,” said Seema Shah, chief strategist at Principal Global Investors. “Easy monetary policy, fiscal stimulus, recovering economic growth — there are many reasons for investors to be optimistic as we move closer to the end of this awful year.”

Covid 19 vaccine


Still, concerns about a sustainable economic recovery persist amid a flare-up in virus cases around the world. The pandemic continues to escalate in Europe and the U.S. American coronavirus cases have topped 11 million. Germany must live with “considerable restrictions” against the spread of Covid-19 for at least the next four to five months, its economy minister said.
Treasury yields held steady and the dollar slipped. Crude pushed higher as the vaccine news boosted the outlook for demand. China’s oil processing rebounded in October to match a record, as consumption in Asia continues to vastly outpace that of regions still afflicted with the virus.

Elsewhere, European equities rose, following Asian shares higher after a slew of countries Sunday signed the world’s largest regional free-trade agreement, encompassing nearly a third of the globe’s population and gross domestic product. Australia’s stock exchange was hit by a software issue that forced it to close for most of Monday’s session.

In the U.S., the stock rotation continued following the best week for S&P value stocks versus S&P growth shares since 2008. The Russell 2000 Index of small-caps rallied as much as 2.2% to a record, while the tech-heavy Nasdaq 100 rose half as much.

“It’s the same trend we’ve been seeing over the past several weeks which is a move toward value, toward companies that will rebound when COVID goes away,” said Christopher Grisanti, chief equity strategist at MAI Capital Management. “We have facts on the ground which can truly change the environment in a three- to six-month period.”

Source: https://www.dallasnews.com/business/economy/2020/11/16/stock-markets-surge-toward-record-highs-on-moderna-vaccine-success-news/

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