The Tuesday Market Minute
- Global stocks mixed as markets around the world re-price risk in the wake of Pfizer’s coronavirus vaccine breakthrough.
- Eli Lilly wins EUA approval from the FDA for its bamlanivimab treatment, a monoclonal antibody that protects high-risk patients.
- Tech stocks resume slide as stay-at-home bets fade in the hopes of a workable vaccine, although analysts caution that major changes in work patterns will take several months.
- European stocks edge higher, even as infection rates hit jobs in Britain and investor sentiment in Germany, as vaccine bets keep markets at an eight-month high.
- Wall Street is looking at a mixed open Tuesday, with weaker tech stocks and a stronger Dow, ahead of earnings from DR Horton and Jolts jobs data at 10:00 am Eastern time.
U.S. equity futures were mixed in overnight trading Tuesday, with stay-at-home and tech stocks extending declines, as markets continue to re-price risk following yesterday’s coronavirus vaccine breakthrough from Pfizer (PFE) – Get Report.
Pfizer and its German partner, BioNTech (BNTX) – Get Report, said Monday that their developing coronavirus vaccine showed a 90% efficacy rate in late-stage trials, a much-better-than-expected result that suggests both near-term approval for the U.S. Food & Drug Administration as well as the scaling capabilities to produce more than a billion doses of the potential vaccine before the end of next year.
Another bit of positive news from the worldwide race for a workable treatment to the disease came late Monday from Eli Lilly & Co. (LLY) – Get Report, which won Emergency Use Approval from the FDA for bamlanivimab, a monoclonal antibody treatment that reduces the need for hospitalization in patients deemed a high risk of contracting COVID-19.
The timing of the breakthroughs is crucial, given that U.S. hospitalizations passed a record high 59,000 yesterday, with new infections rising at more than 100,000 each day for the past week. Collectively, more than 10 million Americans — and 50 million people around the word — have contracted the virus since it was first identified in the central industrial city of Wuhan, China, in early January.
The economic hit from the pandemic has been brutal, and indeed lingering, with data from Europe this morning showing a surge in layoffs from Britain and concerns from investors surveyed in German that the region’s biggest economy could return to recession as a result of the ongoing winter resurgence.
Stocks are still reflecting investor optimism that Pfizer’s breakthrough could mark the beginning of the end of the year-long pandemic. with Wall Street recording its best day since the Spring yesterday as the Dow neared the 30,000 mark and oil prices spiked more than 10% on the session.
Much of that bid looks to have faded Tuesday, however, and U.S. equity futures suggest a mixed opening bell, with contracts tied to the Nasdaq Composite suggesting a 140 point decline and those linked to the S&P 500 priced for an 8 dip.
Futures tied to the Dow Jones Industrial Average, meanwhile, are indicating a 120 point gain.
European stocks were holding onto modest gains at the start of trading in Frankfurt and London, with the Stoxx 600 rising to an eight-month high with a 0.28% gain and Britain’s FTSE 100 trading 1.2% higher in London thanks to solid gains for energy and commodity stocks.
Global oil prices extended gains from yesterday’s rally, as well, on the hopes that a near-term treatment option will ignite travel and boost energy demand, while at the same time compelling OPEC members to pause a planned increase in production at the start of the new year.
WTI contracts for December delivery, the U.S. benchmark, traded 41 cents higher from their Monday close in New York and were changing hands at $40.70 per barrel in early European dealing while Brent contracts for January, the new global benchmark, were seen 53 cents higher at $42.93 per barrel.
Away from equities, the U.S. dollar index held onto gains against a basket of its global peers in foreign exchange markets Tuesday, rising 0.12% to 92.845, while benchmark 10-year U.S. Treasury note yields were little changed from yesterday’s collapse at 0.951%.
Overnight in Asia, Japan’s Nikkei 225 added to gains to record a fresh 29-year high for the regional benchmark, rising 0.26% to end the session at 24,905.59 points. The region-wide MSCI ex-Japan index, meanwhile, was last seen 0.14% higher at 612.43 heading into the final hours of trading.