Pfizer vaccine hopes lift world stocks; dollar, gold on the defensive

In this news, we discuss the Pfizer vaccine hopes lift world stocks; dollar, gold on the defensive.

NEW YORK (Reuters) – Global stocks rose on Friday, as safe-haven stocks such as the dollar eased as investors welcomed news that drugmaker Pfizer Inc PFE.N may have a vaccine against the coronavirus ready in the United States by the end of this year.

But fears that a faltering global economic recovery could be scuttled by a resurgence of the COVID-19 pandemic in parts of Europe and the United States have kept oil prices under pressure and German bond yields. at 10 years near their seven-month lows.

The S&P 500 .SPX rose 20 points, or 0.6%, to 3,503.63, while the Dow Jones Industrial Average .DJI jumped 253 points, or 0.9%, to 28,744.49. The Nasdaq Composite .IXIC climbed 43 points, or 0.3%, to 11,753.53.

Pfizer shares rose 3.1%. The US drug maker said on Friday it could file a US authorization request for the COVID-19 vaccine it is developing with its German partner BioNTech 22UAy.F as early as late November.

As the global race to develop a coronavirus vaccine heats up, financial markets have followed every turn, hoping that a successful deployment would send the global economy into a sustained rebound from a heartbreaking shutdown in the spring.

Some analysts say investors are now trying to move past the short-term ups and downs that come with vaccine development to focus on a more likely turnaround in 2021.

“There is a general consensus that things will get better next year,” said Rick Meckler, partner at Cherry Lane Investments, a New Jersey family investment office. “We go back and forth, but people have a little hope.”

Cautious optimism also benefited European equities. The pan-European STOXX 600 .STOXX index jumped 1.3%, while stocks of London .FTSE, Frankfurt .GDAXI and Paris .FCHI climbed 1.5% to 2%.

For the year, however, European equities have lagged behind the performance of US and Asian equities.

The pan-European STOXX 600 is down 11.6% so far this year, compared to an 8.3% gain in the S&P 500 and a 5.2% rise in the largest MSCI index of Asia- Pacific outside of Japan.

Asian stocks also managed to post modest gains on Friday, although stocks in China and Japan posted slight declines. The MSCI Asia-Pacific stock index .MIAPJ0000PUS rose 0.4%, while Japan’s Nikkei .N225 lost 0.4%.

Chinese stocks .CSI300 fell 0.2%, but the main stock index rose for the week for the third week in a row.

The improving mood on the floors weakened the US dollar, which is generally seen as a safe haven. The dollar = USD slipped 0.1% to 93.714 against a basket of six major currencies. [USD/]

A weaker dollar helped the euro EUR = EBS regain some ground, with the common currency rising 0.1% to $ 1.1717.

The pound was on the defensive after British Prime Minister Boris Johnson told companies to prepare for a no-deal Brexit in case negotiations with the European Union failed to result in a free trade deal.

But assurances that Britain would continue talking to European Union officials early next week raised hopes that a deal could be reached. This gave the British pound GBP = D3 some breathing space and cut past losses to rise 0.1% to $ 1.2906.

Still, a sign that the global economy is not out of the woods and investors are not unanimously optimistic about the outlook, oil prices have fallen amid fears that the surge in COVID-19 cases in Europe and states United is reducing demand in two of the following countries: the world’s largest fuel-consuming regions.

“It is a showdown between well-signaled risks, the pandemic, the US elections, Brexit, and at the same time the hope that these same risks can be resolved in a few weeks or a few months,” said Emmanuel Cau , Head of European Equity Strategy at Barclays.

Brent crude futures for December LCOc1 fell 0.6% to $ 42.91 per barrel and US West Texas Intermediate crude futures for November delivery CLc1 slipped 0.4 % to $ 40.8. [O/R]

Also exposing market angst, the German 10-year bond yield DE10YT = RR posted its biggest weekly decline since August and was near a seven-month low of -0.63%.

Indeed, the demand for safe haven government bonds is so strong that around 69% of the euro government bond market – valued at just over € 6 trillion – has had returns. negative in September, according to data from Tradeweb, a financial services company.

The 10-year US Treasury yield US10YT = RR edged up to 0.7406% on Friday as investors took comfort in data that showed US retail sales rose more than expected in September, ignoring a prospect that analysts believe threatened by widespread unemployment looming fiscal stimulus. [US/]

Many investors now expect the US government to unveil additional fiscal stimulus only after the November 3 election.

The outlook for a short-term US stimulus and the slight decline in safe-haven stocks weighed on gold. Gold is seen as a hedge against inflation and has benefited from loosening global monetary and fiscal policies.

The XAU = spot gold price fell 0.3% to $ 1,901.61 per ounce. [GOL/]

Report by Koh Gui Qing in New York and Julien Ponthus in London; Editing by Matthew Lewis and Nick Zieminski

Original © Thomson Reuters

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