Vaccine progress and Biden win power stocks to record peak

In this news, we discuss the Vaccine progress and Biden win power stocks to record peak.

MILAN (Reuters) – Global stocks hit new record highs on Monday as promising vaccine development from Pfizer PFE.N and expectations that global trade relations will improve under US President-elect Joe Biden have boosted the appetite for risk.

Markets began trading over the prospect of a Biden presidency last week, but the Democratic candidate’s projected victory on Saturday gave more fuel to the move.

Data showing that Pfizer’s experimental vaccine was over 90% effective in preventing COVID-19, potentially a big step forward in the fight against the pandemic, also heightened sentiment.

The MSCI .MIWD00000PUS global stock index, which tracks shares of 49 countries, rallied after the news broke to a new high, rising more than 1% on the day. On Friday, he posted his biggest win in a week in nearly seven months.

“The resumption of relief actions seems very strong. It also seems to have caught people off guard, ”said Arne Petimezas, analyst at AFS in Amsterdam.

The pan-European STOXX 600 .STOXX climbed nearly 4% at 12:03 a.m. GMT, to return to February levels and fueled by stocks in sectors like airlines and travel. Among other risky assets, oil climbed nearly 8%, while safe haven bonds and gold sold off.

E-mini futures for the S&P 500 ESc1 also received a boost, climbing nearly 4% to an all-time high, although Nasdaq NQc1 futures remained just below their all-time high, in 1.7% increase.

Monday’s vaccination progress heightened expectations that the economic damage from the pandemic would be temporary, even if conditions could weaken further.

“With Europe on hold and the risk of foreclosure in the United States, short-term data may look poor,” said strategists at French bank Exane, headed by Dennis Jose.

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“However, if a vaccine is approved, it opens up a scenario where consumers release their oversized savings, allowing investors to look through short-term weaknesses.”

FAVORABLE SCENARIO

Previously, the largest MSCI Asia-Pacific equity index outside of Japan .MIAPJ0000PUS jumped 1.4% after hitting its highest level since January 2018 amid expectations of easing trade tensions after the American elections.

US President Donald Trump has not conceded defeat and disputes the outcome of the vote, but many current and past world leaders have already praised Biden.

“The die is cast,” said Andrea Delitala, portfolio manager and head of euro multi-asset strategy at Pictet Asset Management in Milan.

“The American elections have returned a favorable scenario (for) to investors, freeing them from the unpredictability of the leader of the world’s largest economy … a return of multilateralism is at stake,” he added.

Investors expect Republicans to maintain control of the Senate, which will make it harder for a Biden administration to push through major policy changes from a planned tax hike to a big fiscal stimulus package.

That would mean better earnings prospects for companies exposed to the world’s largest economy, but also that the US Federal Reserve may have to step in to provide any additional support the pandemic-hit economy may need.

Oil prices surged as investors hailed the news of vaccines and the prospect of Biden’s victory, ignoring concerns over lackluster demand. Brent LCOc1 prices rose 8% to $ 42.6.

Spot gold XAU = fell 1.8% to $ 1,914.96 an ounce.

The dollar has remained weak given expectations that monetary policy in the United States will remain easy and global trade relations will improve.

After posting its biggest weekly loss in more than seven months on Friday, the dollar index USD = rose 0.2% to just over 10 weeks, while growth and trade indicators such as the dollar Australian and Chinese yuan remained in demand.

The euro EUR =, which climbed 1.9% last week, advanced 0.1%. Sterling GBP = added 0.2% as attention turned to Brexit trade talks that could culminate with the EU summit on November 15th.

Reporting by Danilo Masoni in Milan, additional reporting by Swati Pandey in Sydney, editing by Larry King and Catherine Evans

Original © Thomson Reuters

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