Global stocks made a new record high as signs of Asian economic recovery, strong corporate profits, and additional positive information about the COVID-19 vaccine gave investors hope.
The U.S stocks
The U.S. stock futures rose 1.2%, highlighting a stronger Wall Street opening. The per cent gain was due to the announcement of the modern pharmaceutical company (NASDAQ: MRNA) that claimed their vaccine is 94.5% effective in preventing the deadly virus that resulted in a global economic meltdown.
That announcement assisted MSCI’s global stock index to continue to rise, gaining 0.6% to make an all-time high based on robust abrupt performance in major Asian markets and strong openings of most European stock exchanges.
The MSCI, the largest Asia Pacific’s stock index besides Japan, reached its optimal level since its launch in 1987 when Japan escaped the recession. China posted better-than-expected industrial production data, and the region signed the largest trade agreement in history.
The European index equally hit a daily high after the release of the news from Moderna. The FTSE 100 UK rose by 1.7% and the pan-European STOXX Europe 600 (STOXX) increased by 1.4%. We are in a new trading week on the market, which is encouraging given all the excitement about the innovative vaccine news over the last seven days.
A fixed and steady return is what investors need after a very volatile period. Moderna’s announcement follows similar positive news from her opponent Pfizer (N: PFE) a week ago. The outlook for the end of the COVID-19 lockdowns economy-shrinking increased oil prices with Brent and West Texas heavy intermediate oil prices rising by about 3%, whereas gold prices made negative moves and lost 0.7%.
European government bond revenues also increased after Moderna released the news of positive Corona Virus vaccines. The same day, the German 10-year bond yields rose by two basis points, while the Italian and German yields gap narrowed to the least level since the 2nd quarter of 2018.
After weakening for the greater part of the day, the dollar traded a bit stronger against the currencies. However, the growth was limited by the new weekend data that showed an escalation in COVID-19 cases.
Speaking about the future, several Fed speakers will be speaking about this news, including Vice President Richard Clarida.
The rise of the coronavirus is risky, but strategists at Morgan Stanley (NYSE: MS) have urged investors to be optimistic about their 2021 forecast notes.
We believe that this global recovery will be sustainable, synchronous, and politically driven after much of the standard post-crisis scenario. On the stock side, analysts expect a double-digit gross return and a 25% to 30% earnings-per-share growth across regions by the end of 2021. If this happens, it will help the S&P 500 rise to 3900 out of the present 3,585 points.
Apart from the virus, the Brexit trade talks on Monday caused great concern among European investors. There was hope that the pound would weaken against the dollar in anticipation that the success of the Brexit talk would somewhat diminish.
The British pound left an initial uptrend and, as it fell against the dollar till it changed hands at 1.3180 per dollar and also against the euro. The last rate of the pound was 89.78 pence per euro (EURGBP = D3).
Although the departure of a forceful and inflexible economic adviser from Downing Street is regarded as a positive sign and seems to allow Britain to make more concessions, Brexit chief negotiator David Frost said on Twitter that the negotiations may not be successful.