Vaccine news gives market sentiment shot in the arm

Stocks pushed higher yesterday following more encouraging news on the vaccine front.
Pfizer and BioNTech said a completed analysis of their experimental Covid-19 vaccine found it protected 95% of people against the disease – up from early data showing 90% effective, and announced they were applying for US emergency approval “within days”.
“News of an improvement in the effectiveness of the Pfizer vaccine helped markets to find their footing on what was otherwise an uneventful day,” said Chris Beauchamp, chief market analyst at online trading firm IG.
The gains were nowhere the surges seen on the initial announcements by Pfizer and BioNTech and rival Moderna.
The Dow climbed 0.5% in late morning trading.
Across Europe, London’s FTSE 100 closed 0.3% up at 6,385.24 points; Frankfurt’s DAX 30 gained 0.5% at 13,201.89, while Paris’ CAC 40 rose 0.5% at 5,511.45.
Beauchamp noted that the vaccine news is “shifting away from blockbuster news that electrifies markets to a more measured response to what is still good news for markets, the global economy and of course the human race.”
The gains were bigger for the vaccine makers, however, which shares in Pfizer climbing 1.9% and those of BioNTech jumping 4.7%.
While the mood on trading floors remains broadly optimistic about the long-term outlook, analysts said the coronavirus will continue to cause worry, especially in the short term as surging infections around the world threaten an already stuttering economic recovery.
Joe Biden’s US election win and the news of two successful trials of vaccine candidates have proved to be hugely successful helping global stock markets bounce back strongly from a painful October.
The successful vaccine trials have fanned hopes that life can begin to return to normal from the start of next year, particularly giving a boost to travel and tourism stocks.
Shares in Boeing rose 2.8% after US regulators cleared the 737 MAX to return to the skies, ending its 20-month grounding after two fatal crashes that plunged the company into crisis.
Crude prices jumped over 1% – a day after the Opec+ club of oil producers agreed they had to be ready to act on output cuts to prevent another slump in prices.
The pound rose waiting to see if Britain and the EU can strike a post-Brexit trade agreement ahead of a December 31 deadline.
In Asian trading, raging Covid-19 cases across the US and Europe – and a pick up elsewhere including Japan and South Korea – are of immediate concern, analysts said.
Traders are also growing worried that US lawmakers are not doing enough to agree on a new, much-needed stimulus for the world’s top economy as it shows signs of slowing in the face of the new wave of infections.
Months of talks ahead of the November 3 election failed to reach a breakthrough, and Republicans who are likely to keep power in the Senate show no signs of backing down to Democrat demands for a multi-trillion-dollar package.
“With the election uncertainty out of the way it’s about Covid; we’ve seen this exponential growth in cases,” David Kudla, CEO of Mainstay Capital Management CEO. “It’s also about fiscal stimulus, when that finally comes, how much we get. We know we have good news on the vaccines, but those are out in the future.”