Asian Stocks to Gain on Vaccine News; Dollar Drops: Markets Wrap
Asian stocks looked set for gains Tuesday after a positive vaccine update sent U.S. equities tied to an economic reopening higher while defensive tech shares lagged. The dollar fell.
S&P 500 futures edged up at the open. The benchmark closed at an all-time high after Moderna Inc.’s vaccine was shown to be 94.5% effective in a preliminary analysis of a large late-stage clinical trial. Stocks poised to benefit from a reopening, such as cruise lines and air carriers, were among the day’s best performers. Futures gained in Japan and Hong Kong. Benchmark Treasury yields ticked back above 0.90%. Oil held gains.
Elsewhere, Tesla Inc. shares jumped more than 10% in after-hours trading after an announcement that Elon Musk’s upstart carmaker will join the S&P 500 Index on Dec. 21. Australian stocks opened little changed after the stock exchange was closed for most of Monday’s session because of a software issue.
The vaccine news adds yet another driver to a global stocks rotation into value and cyclical sectors that have been hardest hit by the pandemic, and out of more defensive industries like technology. Investors are betting that vaccines will allow economies to reopen next year.
“Positive news on Covid vaccines gives us greater confidence that the economic restart can re-accelerate in 2021 and that the cumulative activity loss from the virus shock will ultimately be a fraction of that seen after the global financial crisis,” BlackRock Investment Institute strategists wrote in a note. “We prefer to look through any market volatility generated by the virus resurgence and renewed restrictions over the challenging months ahead.”
Still, concerns about a sustainable economic recovery persist amid a flare-up in virus cases around the world. The pandemic continues to escalate in Europe and the U.S. The seven-day average of new cases in the U.S. was climbing in every state on Sunday.
Here are some events to watch out for this week:
- Brexit talks look set to continue as the U.K. and EU approach the latest deadline.
- Bloomberg New Economy Forum virtually convenes global leaders to discuss trade, growing political populism, climate change, and the pandemic. Through Nov. 19.
- OPEC+ Joint Ministerial Monitoring Committee meets Tuesday.
- U.S. retail sales due Tuesday.
- Bank Indonesia rate decision Thursday.
These are the main moves in markets:
- S&P 500 futures rose 0.1% as of 8:03 a.m. in Tokyo. The S&P 500 Index climbed 1.2%. The Dow Jones Industrial Average advanced 1.6%.
- Nikkei 225 futures rose 0.8% in Singapore.
- The S&P/ASX 200 Index rose 0.2%.
- Hong Kong’s Hang Seng Index contracts gained 0.3% earlier.
- The yen was little changed at 104.57 per dollar.
- The offshore yuan was at 6.5731 per dollar.
- The Bloomberg Dollar Spot Index decreased 0.3%.
- The euro traded at $1.1856.
- The British pound was at $1.3196.
- The yield on 10-year Treasuries rose one basis point to 0.91%.
- Australia’s 10-year bond yield rose five basis points to 0.94%.
- West Texas Intermediate crude rose 0.2% to $41.42 a barrel.
- Gold was steady at $1,889.53 an ounce.
— With assistance by Vildana Hajric, Claire Ballentine, and David Wilson
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