Dow, S&P 500 update record highs as moderna has better COVID vaccine

Wall Street extended gains on Monday, driven by reinforced vaccine optimism. After Pfizer caused the stock market to switch to value stocks and return close to its record high, now it’s time for biotech firm Moderna to give its contribution. Moderna said its COVID vaccine candidate was almost 95% effective in preventing the disease, citing internal late-stage data. For comparison, Pfizer’s effectiveness was estimated at about 90%. Also, another important aspect is that Moderna’s vaccine doesn’t need to be stored at -70 degree Celsius. This is one of the reasons why Pfizer’s share price fell by about 4% while Moderna’s stock surged nearly 10%.

As for the stock indexes, the S&P 500 and Dow Jones updated the record highs on Monday, gaining 1.16% and 1.60%, respectively. Nasdaq added 0.80%.

Of the S&P’s 11 major sectors, all but healthcare declined, with energy being the best performer.

Moderna said that it would release more data on its detailed study later this month. It revealed that it plans to apply for emergency use of its vaccine by the beginning of December. The US might get 60 million doses by the end of the year. Elsewhere, Reuters reported that the European Commission wants to get millions of doses for a price below $25 per dose.

Meanwhile, the number of coronavirus cases continues to surge in the US and globally. About 40 US states saw a record number of infections, prompting many of them to tighten the restrictive measures.

In individual corporate news, S&P Dow Jones Indices announced that Tesla would finally join the S&P 500 index at the end of December. The electric car maker will become one of the top 10 most valuable companies among the index’s constituents. Tesla stock surged over 13% following the news.

In Asia, stocks are mixed in early trading on Tuesday, as the optimism over Moderna’s vaccine is fading. The stock market has departed from session highs.

At the time of writing, China’s Shanghai Composite is down 0.25%, and the Shenzhen Component has dropped by 1.25%. Yesterday, China released its industrial production data that beat expectations and positive retail sales. The US is about to release similar reports later today.

Japan’s Nikkei 225 closed 0.42% higher, and Australia’s ASX 200 rose 0.21%.

South Korea’s KOSPI is down 0.02% after initial gains. Prime Minister Sye Kyun Chung introduced tighter lockdown rules for the greater Seoul area earlier on Tuesday. The country saw 230 coronavirus cases as of Monday, the highest figure since early September. Thus, public gatherings of 100 people or more have been banned.

Hong Kong’s Hang Seng Index is down 0.4%.

In the commodity market, oil prices continue the bullish stance amid vaccine hopes and expectations that OPEC+ will maintain the production cuts after January. Both Brent and WTI increased by more than half of a percent, trading at $41.57 and $44.11, respectively. Oil prices have gained about 23% since the beginning of last week, driven by hopes that the efficient vaccines would support economic recovery and thus a rise in demand for crude.

Gold is down on Tuesday morning, as investors focus on equities amid the vaccine euphoria. The metal has declined by 0.11% to $1,885.

In FX, the US dollar has declined as investors are not interested in safe-havens right now given the vaccine optimism. Also, the greenback is reacting to the acceleration of COVID cases in the US, which lead to more restrictive measures. Besides this, worries about a peaceful transfer of power from President Donald Trump to Joe Biden don’t bode well for the American currency. The USD Index fell 0.12% to 92.523. EUR/USD is up 0.03% to 1.1856.

The British pound is bullish against both majors as Brexit talks have reached their decisive week.

---

Stay on top of the markets with Swissquote’s News & Analysis

---