(03 December 2020)DAILY MARKET BRIEF 1:UK Approves Pfizer’s COVID Vaccine

US equities were mixed on Wednesday, with the S&P 500 updating the record high for a second straight session, while the Nasdaq closing in the red. The market was driven by positive COVID vaccine news and stimulus talks. The downbeat private jobs data triggered stronger resistance.

Democrats and Republicans in Congress failed to reach consensus on fresh stimulus, though some analysts argue that bad economic reports might urge policymakers to insist on a deal. US House Majority Leader Steny Hoyer said that an agreement might be reached in the next few days.

ADP data showed that private payrolls rose less than anticipated last month, as the resurgence of the pandemic forced the US government to introduce new restrictive measures that affected many businesses. On Friday, the nonfarm payrolls report might be decisive in convincing Congress that fresh stimulus is needed.

Investor sentiment was buoyed by the latest vaccine news, as the UK was the first Western country to approve a COVID vaccine. Britain gave the nod to the vaccine developed by Pfizer and BioNTech. The stock price of the two rose by 3.5% and 6%, respectively.

The vaccine optimism doesn’t really help tech stocks, which benefited during the whole lockdown period at the expense of value stocks. Nasdaq fell 0.05%. Elsewhere, the S&P 500 and the Dow ended higher, up 0.18% and 0.20%, respectively.

In Asia, stocks are mixed in early trading on Thursday, but bulls dominate on the back of vaccine optimism and potential US stimulus.

At the time of writing, China’s Shanghai Composite is down 0.46%, while the Shenzhen Component has gained 0.09%. The market was driven by upbeat services sector data. Caixin said that its services PMI for November came in at 57.8, topping estimates of a 56.5 reading and up from 56.8 in October. New business rose at the fastest rate in about 10 years.

However, deteriorating tensions between the US and China are putting pressure on the Chinese market. The US House of Representative green-lighted legislation that allows Chinese firms, such as Alibaba, to be dismissed from US exchanges if they don’t allow regulators to review their financial performance.

Also, the Trump administration banned cotton imports from a major Chinese quasi-military organization. The US argues that the company used forced labor of Uighur Muslims that are detained.

Hong Kong’s Hang Seng Index was up 0.77%.

Japan’s Nikkei 225 inched higher by 0.04%. The country’s services PMI rose to 47.8 in November, after October’s figure at 47.7.

South Korea’s KOSPI is up 0.64%. In Australia, the ASX 200 closed 0.38% higher.