(23 November 2020)DAILY MARKET BRIEF 1:Wall Street to Open Higher on Vaccine Hopes
US equities will likely open higher on Monday after a bearish end of the week. Futures on Dow Jones and the S&P 500 are up 0.30% as of Monday morning European time, even though the number of COVID infections continues to increase in the US and Europe. Investors have focused on the vaccine news and the next package of economic stimulus, which should be deployed sooner than later.
Last week, all three indexes on Wall Street ended lower, with Dow and the S&P 500 recording a loss for the week, declining by over 0.70%.
On Friday, the US reported a record increase in COVID cases, as over 195,000 people tested positive. Health officials are worried that Thanksgiving celebration could make the situation worse. The average number of cases last week was over 167,000, up about 20% compared to the previous week.
Some regions are tightening the restrictive measures. On Thursday, California Governor imposed a “limited Stay at Home Order” on most residents, which doesn’t permit them to gather and do nonessential work between 10 PM and 5 AM.
Besides the resurgence of the virus, the market was pressured by the disagreement between the White House and the Fed, after Treasury Secretary Steven Mnuchin halted the Fed’s funding under some emergency programs.
Still, the market is recovering amid vaccine optimism. On Saturday, the FDA granted emergency use authorization for the antibody treatment produced by Regeneron, which was previously given to President Donald Trump.
Meanwhile, Pfizer and BioNTech applied for an emergency use authorization with the FDA for their mRNA COVID vaccine.
In Individual corporate news, the European Union Aviation Safety Agency (EASA) is about to lift its ban on the Boeing 737 MAX jets in January after US regulators green-lighted their flights after 20 months, following two fatal crashes in the last two years. The head of the EASA said that the jet was safe to fly due to the changes in the design.
In Asia, equities are bullish in early trading on Monday, as investor sentiment is boosted by vaccine hopes. Markets in Japan are closed on Workers Day.
At the time of writing, China’s Shanghai Composite and the Shenzhen Component are both up over 1%.
Hong Kong’s Hang Seng Index is bearish, declining by 0.03%. The city is now facing a fourth wave of the COVID pandemic, reporting 68 cases yesterday.
South Korea’s KOSPI has surged over 2%. In Australia, the ASX 200 closed 0.34% higher. Preliminary data for Australia’s services and manufacturing PMIs showed an improvement from October figures, which were well above the 50 mark that separates growth from contraction.
The number of COVID cases and deaths continues to be unstoppable at a global level, approaching the 59 million mark. Over 1.39 million died according to Worldometers data.
