More positive news on a Covid-19 vaccine delivered a jolt to US equity futures, sending stocks tied to an economic reopening higher, while erasing a rally in tech companies where investors had parked money during the lockdown. Treasuries slumped.
S&P 500 contracts jumped alongside those on the Russell 2000 Index after Moderna’s vaccine was shown to be 94.5 per cent effective in a preliminary analysis of a large, late-stage clinical trial. The shares surged more than 10 per cent in pre-market trading. Stay-at-home favorites Peloton Interactive and Zoom Video Communications tumbled, while Delta Air Lines and Carnival Corporation gained more than 6 per cent.
The vaccine news adds yet another driver to global stocks after optimism last week spurred a rotation into value and cyclical sectors, and out of more defensive industries. US equity futures were up earlier after advisers to President-elect Joe Biden said they opposed a nationwide shutdown despite surging virus cases.
“We really do want to rotate into those cyclicals, those smaller caps, those higher-beta Covid plays,” Christopher Harvey, head of equity strategy at Wells Fargo Securities, told Bloomberg TV. “Those two catalysts – yield curve steepening and vaccines in the marketplace – these are really high Covid beta plays and we think now is the time to do it.”
Still, concerns about a sustainable economic recovery persist amid a flare-up in virus cases around the world. The pandemic continues to escalate in regions such as Europe and the US. 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.
Elsewhere, European equities rose, following Asian shares higher after a slew of countries on 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. Oil prices pushed higher.
Here are how the main markets moved.
- Futures on the S&P 500 Index climbed 1 per cent as of 5.21pm UAE time.
- The Stoxx Europe 600 Index rose 1.5 per cent.
- The MSCI Asia Pacific Index surged 1.4 per cent.
- The MSCI Emerging Market Index rose 1.3 per cent.
- The Bloomberg Dollar Spot Index decreased 0.1 per cent.
- The euro dipped 0.1 per cent to $1.1825.
- The British pound declined 0.1 per cent to $1.3172.
- The onshore yuan strengthened 0.3 per cent to 6.589 per dollar.
- The Japanese yen weakened 0.3 per cent to 104.98 per dollar.
- The yield on 10-year Treasuries rose two basis points to 0.92 per cent.
- The yield on two-year Treasuries climbed less than one basis point to 0.18 per cent.
- Germany's 10-year yield gained two basis points to -0.53 per cent.
- Britain's 10-year yield gained four basis points to 0.373 per cent.
- Japan's 10-year yield dipped less than one basis point to 0.021 per cent.
- West Texas Intermediate crude rose 4 per cent to $41.74 a barrel.
- Brent crude rose 3.5 per cent to $44.27 a barrel.
- Gold weakened 0.8 per cent to $1,873.53 an ounce.