Wall Street rockets as vaccine news sends stocks soaring

Wall Street rockets as vaccine news sends stocks soaring

Proactive Investors

Published

The main Wall Street indices have rocketed upwards on Monday morning in New York as Pfizer’s news on its coronavirus vaccine seems to have sent equities into overdrive. Shortly after the opening bell, the Dow Jones Industrial Average surged 5.3% to 29,825, while the S&P 500 jumped 3.6% to 3,637 and the Nasdaq bounced 0.85% to 11,996. News that the Pfizer vaccine was 90% effective in Phase III clinical trials, higher than expected, coupled with reduced political risk following the election victory of Joe Biden over the weekend has caused risk appetite among investors to soar as many may now be seeing a light at the end of the tunnel for a volatile year. “With Covid wreaking havoc across Europe and the US once again, the Pfizer announcement has provided the lift we've all craved… We've been waiting for this moment for a long time and hopefully others will soon join Pfizer and BioNTech and enable us to break this vicious cycle of lockdowns and cautious reopenings that's killing businesses, causing rising unemployment and massively adding to the debt load around the world. This is the light at the end of the tunnel moment and just look at the reaction in the markets. One of incredible relief”, said OANDA’s Craig Erlam. “The Pfizer moment will be bittersweet for President Trump - who has already tweeted out his delight at the news - after months of claiming a vaccine would be announced ahead of the election. A vaccine should never have become political but it quite clearly has in recent months and I'm sure the President will feel a little disappointed at the announcement coming a week or two too late. Still, this isn't political and it has been a remarkable effort to get to this point in such a short space of time”, he added. 7.36am: Wall Street set to surge Some heartening news on a potential treatment for the coronavirus (COVID-19) is set to light a fire under US equities. Spread betting quotes suggest the Dow Jones Industrial Average will add more than a thousand points – 1,128 to be precise – and open at around 29,451. The S&P 500 is expected to soar 107 points to 3,615 while the NASDAQ Composite is predicted to jump 371 points to 12,266. The COVID-19 vaccine being developed by Pfizer Inc (NYSE:PFE) and BioNTech was successful in preventing more than 90% of people from getting the coronavirus in a preliminary test. Pfizer and BioNTech said following the preliminary analysis that it is “a great day for science and humanity”. The apparent 90% success rate was much higher than expected. The news added extra fuel to what was already set to be a hot start for US equities in the wake of Democratic Party candidate Joe Biden’s presidential election victory last week. Biden is reportedly to set up a task force to tackle the spread of the virus, which was described as “out of control and accelerating” by Ian Shepherdson, the chief economist of Pantheon Macroeconomics. “Yesterday saw 106K cases, up 44% from Sunday last week. The trend rate of increase has now risen to about 34% per week, almost doubling over the past week. If this continues, Chart 1 below shows that by the end of the year, the US would be reporting 1.0 million cases per day, which would mean that the national picture would be nearly twice as bad as North Dakota—the worst hit state, by far—is right now,” Shepherdson said. Four things to watch for on Monday: Share price reaction from Pfizer will be in focus following its positive news on the effectiveness of its coronavirus vaccine Investors will also be eyeing McDonald’s Corp (NYSE:MCD) after the fast food giant reported quarterly earnings that topped market expectations and hiked its dividend following a sales boost from US consumers as promotions drove them back into its outlets By contrast, the news of vaccine is bad news for firms that have cashed in on lockdown, with shares in conference call specialist Zoom Video Communications Inc (NASDAQ:ZM) having taken a hit in pre-market trading in New York The macro calendar is a little threadbare on Monday, however US consumer inflation expectations for October may hold some attention. The figure is forecast to fall to 2.8% from 2.98% in September

Full Article