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World stocks head for record high on recovery, vaccine hopes

Published 11/15/2020, 07:19 PM
Updated 11/16/2020, 08:05 AM
© Reuters. Passersby wearing protective face masks walk past a screen displaying Nikkei share average and world stock indexes, amid the coronavirus disease (COVID-19) outbreak, in Tokyo

© Reuters. Passersby wearing protective face masks walk past a screen displaying Nikkei share average and world stock indexes, amid the coronavirus disease (COVID-19) outbreak, in Tokyo

By Simon Jessop

LONDON (Reuters) - Global stocks eyed a fresh record high on Monday as signs of economic recovery in Asia, strong corporate earnings and additional positive data about a COVID-19 vaccine boosted investor sentiment.

U.S. stock futures pointed to a stronger open on Wall Street, up 1.2%, extending gains after pharma company Moderna (NASDAQ:MRNA) said its prospective vaccine was 94.5% effective in preventing the illness which has ravaged economies across the globe.

That news helped the MSCI World Index of global shares to extend gains, rising by 0.6% to just shy of a record high hit briefly this month, building on strong overnight gains in Asia's leading markets and a stronger open for most European bourses.

MSCI's broadest index of Asia-Pacific shares outside Japan had hit its highest level since launching in 1987 as Japan pulled out of recession, China posted better-than-expected industrial output data and the region signed the largest ever trade deal.

Taking their lead, European indices also set daily highs after the Moderna news, with Britain's FTSE 100 (FTSE) up 1.7% and the pan-Europe STOXX Europe 600 (STOXX) up 1.4%.

"The markets get the new trading week off to a solid start, which is encouraging given all the excitement generated in the last seven days by news of vaccine breakthroughs," said AJ Bell investment director Russ Mould.

"Solid and steady gains are arguably just what investors need after a very volatile period."

The announcement by Moderna followed similarly positive news a week ago from rival Pfizer (N:PFE).

The prospect of an end to economy-sapping COVID lockdowns also helped oil prices strengthen, with Brent and West Texas Intermediate crude prices up around 3%, while gold turned negative to trade down 0.7%.

European government bond yields rose on the Moderna news, with Germany's benchmark 10-year yields up 2 basis points on the day, while the gap between Italy and Germany's yields fell to the lowest since the second quarter of 2018.

After languishing for much of the day, the dollar perked up to trade marginally stronger against a basket of currencies, albeit kept in check by fresh data over the weekend showing a rise in the number of COVID-19 cases.

Looking ahead, a slew of U.S. Federal Reserve speakers are set to comment this week, beginning with Vice Chair Richard Clarida at 1900 GMT.

While rising cases of the coronavirus were a risk, Morgan Stanley (NYSE:MS) strategists urged investors to "keep the faith" in their 2021 outlook note.

"We think this global recovery is sustainable, synchronous and supported by policy, following much of the 'normal' post-recession playbook. Overweight equities and credit against cash and government bonds, and sell dollars."

For stocks, the analysts see earnings-per-share growth of between 25% and 30% across regions, with double-digit total returns through the end of 2021 that should helped power the S&P 500 to 3,900 points from its current 3,585 points.

BREXIT

Besides the virus, Brexit trade talks were chief among European investors' concerns on Monday, with hopes for a breakthrough ebbing slightly to leave sterling weaker against the dollar and the euro.

The British pound gave up early gains to edge lower against the dollar , changing hands at 1.3180 per dollar, and against the euro as well. The pound last stood at 89.78 pence per euro (EURGBP=D3).

While the departure of hardline adviser Dominic Cummings from Downing Street is seen as a positive, perhaps allowing more British concessions, Britain's chief Brexit negotiator David Frost said on Twitter that talks "may not succeed".

© Reuters. Passersby wearing protective face masks walk past a screen displaying Nikkei share average and world stock indexes, amid the coronavirus disease (COVID-19) outbreak, in Tokyo

Latest comments

Totally laughable! What good is a vaccine if everyone refuses to get it? Trumpers believe Covid19 doesn’t exist, because Donny tells them that, so what’s the vaccine for?” And all the others don’t trust a single thing Donny does, so they don’t think anything that comes out of “Warped” Speed is safe. Meanwhile, Donny is throwing billions of taxpayer dollars at somerhing that he says is a hoax. No wonder he blew election.
There is no recovery whatsoever.
Global “revovery”? What is the market recovering from again? Its at all time highs.
so hilarious & absurd 500 pts on opening !! based on what !!!!!!
Watch VIX as Tech future gave up its early gain and turned red
More vaccine news from Moderna. Last week was like 1500+ open on vaccine news from Pfeizer.Its getting comical the FOMO until the music stops!
sorry that happen last weak, still uncertain ahead will rise but will be a low rise
these guys will find positiveness in nuclear war.
Ohhh nice vaccine hopes was on my bingo card
market rotating into hope stocks today before rotating into fear stocks later this week
Frankly, this election is no mandate and has yet a lot to go through.. the violence aftermath is discomforting and alarming!
Preferably to avoid the record peak: Buy lows ; sell highs
Market is up because all hope big stimuluses from all countries. All of those fresh print monies have nowhere to go except the market.
more vaccine hope since 6 months ago, still ongoing, equity market will head higher as long as there is no vaccine and more higher when a real vaccine is out. lmao.
Dallas Headline: “North Texas Food Bank (NTFB) distributed more than 600,000 pounds of food for about 25,000 people in Dallas on Saturday as Covid19 swept through the area unabated.” Republican Governor Abbott has totally failed his people!
If so many people in one of the richest nations do not have enough to eat, the condition all over ghe world is anybody's guess.. And some ********says there's loads of money to enter the market.. bussllit!!
I told guys ... Reuters will continue to use same stock photo, no matter what is happening in the market ... always Asia up US down
Even with convid 19 vaccine. The world economy will not turn around very fast. US Stimulus payment is still in a deadlock. Convid 19 spiralling, imminent riots of Pro Trump supporters. The sp 500 and Dow Jones will likely to trend downwards. Analysts predicted that plenty of cash is waiting to buy into the markets. I am sorry to say I don't agree. I was reduced to a pauper because I treated analyst predictions as the bible. So please exercise caution
trump supporters riots? as an observer what I saw on non MSM news videos was supporters were harrassed by blm and antifa supporters... fyi: non American here.
Actually they are oblivious of why market is rising hence since last six months they are leveraging the vaccine news despite no vaccine is there till now.This is a scam operated by fed.
(Reuters) - Australia's bourse operator ASX Ltd (AX:ASX) on Monday paused trading in its equity market citing "data issues". Does this give a clue to oncoming market data fraud? get ready!!!
I prefer a mask to this so-called vaccine!
What vaccine?? Maybe comes in April 21!!? Washington state lock down for a month at least
Haven't seen anything remotely ordinary as this kinda rally. Even if there's no pandemic, it's trading at such high valuations. Something got to give n it can be this week. 7-12% fall in a day coming soon
In pandemic stocks rally like freak.. For real? How come they manage to manipulate the market so easily. Technical out hope comes first.. What a joke.
The THIRD WAVE will come from these vaccine-infected people!!! Lets wait n watch
Hope after another.. Sooo lame.
This whole house of cards is about to collapse. Highest valuations of all time in the worst economy since World War 2.
Vaccine hopesStimulus hopesRecovery fearsVirus worriesFinancial news reporting in a nutshell for the last 9 months.
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