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The minute of the Monday market
- Global stocks have hit an all-time high as markets continue to rally following informal statements of a presidential victory for Joe Biden.
- Pfizer says its vaccine against the developing coronavirus has achieved a 90% efficacy rate in late-stage trials, a much stronger result than expected in the race for a viable treatment.
- World leaders are reaching out to congratulate Biden after all major U.S. TV network plans the former vice president will win the 2020 election once the results are officially certified.
- Outgoing President Donald Trump promises to challenge these results, while repeating his unsubstantiated allegations of electoral fraud.
- The US dollar is gaining ground in trade overnight, but remains within reach of a ten-week low, with investors betting on Federal Reserve stimulus in the absence of a deal with the current lame Congress.
- COVID infections in the United States exceed 10 million, with new cases increasing by 120,000 a day as the third wave of the pandemic accelerates in major economies around the world.
- The S&P 500 is expected to open at an all-time high, as the Dow Jones is on the verge of making its fourth largest points gain on record. Nasdaq futures contracts turn red.
U.S. equity futures soared on Monday after Pfizer Inc. (PFE) – Get the report said its developing coronavirus vaccine achieved a 90% efficacy rate in late-stage trials, a much higher than expected result that added to the gains after Democrat Joe Biden’s likely presidential victory.
Pfizer has said it will have 1.3 billion doses of the vaccine next year, while adding that it will seek emergency use authorization from the Food & Drug Administration later this month.
U.S. stock futures are expected to extend the best post-election week of gains since 1932 when trading began on Monday, with futures contracts linked to the Dow Jones Industrial Average valued at a staggering 1,500-point opening bell gain after Pfizer News.
Contracts linked to the S&P 500 point to a 121-point lead that would take the benchmark to a new high, while those linked to the tech-focused Nasdaq, which is up 38.5% for the year, are set for a modest drop as investors dumped the household shares on the Pfizer news.
Pfizer shares rose 14% to $ 41.45 each.
Several U.S. TV stations called for the election of Biden, 77, at midday on Saturday after the vote count in major swing states, including Pennsylvania, showed insurmountable leads for the former vice-president.
Outgoing President Donald Trump, however, has vowed to challenge the results, mobilizing the small legal team to pursue allegations of electoral fraud while demanding recounts in Georgia and Wisconsin. However, Trump has not been seen in public since Thursday, and despite several volleys of allegations on his Twitter feed, little credible evidence of large-scale electoral fraud has emerged.
This brought investors back to a victory for Biden and the implications for his elected government, whose spending ambitions will likely be tamed by the Senate, which could remain under Republican control after the second round for two seats in the state of Georgia in the start. January.
While Biden’s goal of repealing corporate tax cuts and pumping more money into the COVID-hit economy is unlikely to pass through the upper house, investors hope his leadership measured will improve foreign and trade relations while allowing U.S. businesses to benefit from low taxes. context and extensive support from the Federal Reserve.
The US dollar index, which tracks the greenback against a basket of six global currencies, was 0.05% higher at 92.285, but was just a few pips above a 10-week low, as investors begin to consider the prospect of a Fed increase in stimulus in the absence of a deal from the current lame Congress.
Market enthusiasm for a Biden victory, however, can be matched by the growing reality that the acceleration of coronavirus infections in the United States has reached worrying levels as the colder months of the United States approached. year.
New cases have passed the 10 million mark, according to data from Johns Hopkins University, with daily infections increasing at a rate of 120,000 and reaching record levels in various states across the country.
Pfizer has said it will have 50 million doses this year, but full deployment of the vaccine will take months, if not years.
Equally gloomy readings in Europe, however, failed to stop a rally in global equities that took the MSCI World Index to an all-time high at the start of Monday, while taking the Nikkei 225 in Japan to its highest. high level since 1991.
European stocks posted strong early gains on Pfizer news, with the Stoxx 600 up 4%, and after a one-month high, the trade-sensitive DAX index rising 5% in hopes of a new detente between Washington and Beijing – and indeed Brussels – under a Biden administration.
This optimism was also evident in the oil markets, where global crude prices exceeded the $ 40 mark despite concerns about energy demand in the context of the current European lockdowns and the prospect of a more global supply if the United States eased sanctions against Iran under Biden early on. part of next year.
WTI contracts for December delivery, the U.S. benchmark, traded $ 3.44 higher from their Friday close in New York and changed hands at $ 40.58 a barrel at the start of European trading , while Brent contracts for January, the new global benchmark, were $ 3.38 higher at $ 42.83 per. barrel.
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