Equities boosted by vaccine optimism

US stocks are set to open the week higher as futures on the three benchmark indexes are rebounding after a bearish week. Investor sentiment was boosted after the US had officially green-lighted the COVID vaccine produced by Pfizer and BioNTech. Market participants are also waiting for another stimulus package, which has been debated for months.

At the time of writing, Dow futures are up 0.55%, and futures on the S&P 500 and Nasdaq rose 0.43% and 0.24%, respectively.

Last week ended in the negative territory as lawmakers couldn’t find consensus on the next stimulus package. The S&P 500 lost over 1%, for its first bearish week in three, while Nasdaq lost 0.7% for its first negative week in a month.

Equities are expected to bounce back this week on optimism surrounding Pfizer’s vaccine that was approved by the FDA on Friday. Also, the volatility will increase as the Fed will meet to update the monetary policy, while Tesla will officially join the S&P 500 index on Friday.

The Pfizer vaccine is rolled out in a moment when the US is experiencing a rapid surge in the number of cases and deaths. On Friday, over 3,300 people died with COVID, with more than 2,300 deaths being recorded on Saturday.

In the weekend, FedEx and UPS started to ship 2.9 million doses of Pfizer’s vaccine to hospitals, clinics, and other facilities across the US.

In Asia, stocks are mostly bullish in early trading on Monday, recovering some earlier losses that came despite vaccine optimism.

At the time of writing, China’s Shanghai Composite is up 0.50%, and the Shenzhen Component has gained 0.48%. Investors are waiting for Chinese industrial production and retail sales data for November, due tomorrow.

Japan’s Nikkei 225 closed 0.30% higher. South Korea’s KOSPI is down 0.28%

In Australia, the ASX 200 closed 0.26% higher. The Reserve Bank of Australia is about to publish the minutes from its latest policy meeting tomorrow.

Hong Kong’s Hang Seng Index has lost 0.58%

The vaccines news is in the spotlight. US President Donald Trump, along with VP Mike Pence and other US officials will be offered the vaccine starting from today.

In Europe, stocks will likely open higher on the vaccine news, as futures on Euro Stoxx and German DAX are in the green.

On Saturday, British AstraZeneca, which is also producing a COVID vaccine, agreed to acquire US drugmaker Alexion Pharmaceuticals for $39 billion. This will be the largest ever deal for the British company, which is seeking to diversify away from fast-growing cancer business to immunology drugs.

In the commodity market, oil prices are bullish on Monday, with Brent returning above the $50 mark. Prices are maintaining at their highest levels since the beginning of March. Both the WTI and Brent have gained over 1.1% so far. The prices have gained traction amid Pfizer’s vaccine approval in the US and a tanker explosion in Saudi Arabia.

Elsewhere, gold is declining amid increasing interest in risk assets driven by the COVID vaccine news. Investors also expect that the US will pass another stimulus package soon. Gold futures are down 0.40% to $1,836.
In FX, the US dollar is bearish as interest in the safe-haven is fading amid the rollout of Pfizer’s vaccine, while the Fed is expected to ramp up the bond-buying programme. The USD Index has dropped 0.26% to fresh year-to-date lows at 90.688. EUR/USD is up 0.24% to 1.2142.

The British pound is rebounding from monthly lows as the UK and the European agreed to extend Brexit talks after a deadline that came and went on Sunday. However, officials from both sides admitted that a no-deal Brexit is more likely.

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