Monday November 23rd

23-11-2020

Dow futures rise 200 points to kick off the week amid more positive vaccine news

U.S. stock index futures were higher Monday after AstraZeneca and the University of Oxford said their coronavirus vaccine was up to 90% effective, becoming the third inoculation this month that was revealed to be effective in trial data. Futures contracts tied to the Dow Jones Industrial average advanced 203 points, or 0.7%. S&P 500 futures gained 0.6%. Nasdaq 100 futures added 0.4%. AstraZeneca said interim analysis showed its vaccine has an average efficacy of 70% with one dosing regimen showing effectiveness of 90%, while the other demonstrating 62% efficacy. This follows late-stage trial data from Pfizer-BioNTech and Moderna showing that their respective Covid-19 vaccines were around 95% effective. Shares of cruise lines and airlines jumped in premarket trading on hope distributing these vaccines would reopen the economy and boost travel early next year. Shares of Carnival Corp. added 4% while United Airlines rose 2.6% in premarket trading Monday. The positive vaccine data this month has jolted stocks higher to record highs, despite concern about rising cases. Despite stalling out a bit last week, the Dow is up 10% in November. The S&P 500 is up 8%. All three major averages finished Friday’s session lower, while the Dow and S&P 500 also posted a loss for the week, falling 0.73% and 0.77%, respectively, for their first negative week in three. The Nasdaq Composite managed to eke out a 0.22% gain for the week, marking its second straight week of gains. The move lower came as Covid-19 cases continue to rise, with the U.S. reporting a record-high spike of more than 195,500 new cases on Friday. Public health officials have warned that Thanksgiving celebrations on Thursday could further exacerbate the outbreak. Friday’s jump brings the seven-day average of new cases to over 167,600, an increase of nearly 20% compared with a week ago, according to a CNBC analysis of data compiled by Johns Hopkins University. The seven-day average of new cases are up by at least 5% week over week in 43 states and the District of Columbia, Hopkins data shows. The spike has led to coronavirus-related restrictions in some places. On Thursday California Gov. Gavin Newsom instituted a “limited Stay at Home Order” on a majority of the state’s residents, requiring nonessential work and gatherings to cease between 10 p.m. and 5 a.m. The move followed New York City Mayor Bill de Blasio’s decision to close the nation’s largest school system amid a jump in cases. “Stocks this week will trade on lockdown concerns and rising cases, but could see a boost into early December as the optimism around a near term, stopgap stimulus package grows,” said Shannon Saccocia, Chief Investment Officer at Boston Private. “Overall, the push and pull between tech stocks and cyclicals will likely continue through the next couple of weeks, and we could see some tough days as economic data is released that reflects the deterioration in consumer spending we are currently experiencing.” Such measures will “likely deliver negative growth” in the first quarter, JPMorgan economists said Friday. The firm downgraded its first-quarter GDP outlook to a 1% contraction, the first on Wall Street to forecast negative GDP for the first quarter of 2021. Stocks in Asia-Pacific rose on Monday as investors continued to watch for coronavirus developments. South Korea’s Kospi led gains among the region’s major markets as it gained 1.92% to close at 2,602.59. Mainland Chinese stocks were higher on the day: The Shanghai composite rose 1.09% to about 3,414.49 while the Shenzhen component gained 0.743% to around 13,955.28. Hong Kong’s Hang Seng index closed 0.13% higher at 26,486.20. Markets in Japan were closed on Monday for a holiday. Oil prices extended gains on Monday as traders eyed a recovery in crude demand thanks to successful coronavirus vaccine trials, although prices were contained by renewed lockdowns in several countries. Sentiment was also bolstered by hopes that the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, a group known as OPEC+, will keep crude output in check. Brent crude futures rose 21 cents, or 0.5%, to $45.17 a barrel by 0436 GMT while U.S. West Texas Intermediate crude gained 10 cents, or 0.2%, to $42.52 a barrel. Both benchmarks jumped 5% last week. Gold prices eased on Monday as drugmaker AstraZeneca injected fresh optimism into the race for a COVID-19 vaccine, bolstering appetite for riskier assets and overshadowing support for bullion from a weaker dollar. Spot gold fell 0.3% to $1,865 per ounce and U.S. gold futures fell 0.4% to $1,864.30.