Financial Markets Latest: Worldwide markets surge after Covid vaccine revelation

The vaccine news drove Wall Street trading
Stock values surged on Wall Street

News that a vaccine against the coronavirus pandemic could be coming lifted stock markets to record levels this week. Tradefair brings you the latest financial market news...

"News that this vaccine could be highly effective is the best thing markets could hope for."

- Neil Wilson, chief markets analyst at Markets.com

Wall Street was given a record boost this week after an announcement from the UK led to hope that a vaccine against Covid-19 could be mere months away from being rolled out en masse.

The Dow Jones Industrial Average was up 0.7%, the S&P 500 increased 0.9% and the tech-driven Nasdaq Composite enjoyed a boost of 1.2% in trading on Wednesday (November 11).

Meanwhile, the Dow E-minis were up 0.71% and S&P 500 E-minis increased 0.86%. This faster-than-expected boost came almost immediately after the revelation of a potential working vaccine, although stock futures sagged a little lower Thursday morning.

In the latest figures, futures contracts linked to the Dow fell 181 points and the Nasdaq 100 also went into negative territory.

Vaccine hopes

The announcement of a medical breakthrough came mid-week from pharmaceuticals firm Pfizer, which revealed that its vaccine developed in collaboration with German company BioNTech has been more than 90% effective in preventing Covid-19 infection in stage three trials.

It works by introducing part of the virus's genetic code into the body through an injection, which trains the immune system to make the necessary antibodies to fight infection and to create killer T-cells to clear away further examples of the virus.

This was hailed as a huge breakthrough and a 'giant leap for humanity', which prompted demand for stocks linked to economic growth and a move away from tech names and those connected to the so-called 'stay-at-home' economy.

The fact that populations could be widely protected and their economies shielded from further damage from what now looks like a beatable virus lit up markets across the globe.

Energy, financials, industrials and airlines were the big winners, while Pfizer's shares went up by 8% in the US.

Zoom went down a whopping 14% as US stock markets opened, although it is still worth six times more than the same time last year.

Although some of the big tech names also initially posted losses, they soon bounced back and Netflix, Amazon and Facebook all gained around 1% in pre-market trading.

Other notable changes were Lyft jumping 5.7% after announcing a new food delivery service - and gun-makers losing value amid lesser fears of civil unrest.

Cautious optimism - but also cause for concern

Despite the jubilation caused by the vaccine announcement, health officials are calling for calm given the logistical challenge of rolling it out worldwide.

Indeed, this particular formula needs to be kept at minus 80 degrees C and there is immense competition for the 50 million doses that can likely be produced by the end of 2020.

Randy Frederick, vice president of trading and derivatives for Charles Schwab, told Reuters: "It will be a long time before we can get a sizable part of the population inoculated with the vaccine ... but it does speak to a slightly brighter future."

Neil Wilson, chief markets analyst at Markets.com, added: "Whilst we are not there yet, news that this vaccine could be highly effective is the best thing markets could hope for."

Meanwhile, scientists are warning that the US could face its darkest days of the pandemic over the next three to four months, with the nation now reporting more than 120,000 new Covid cases each day.

Areas including New York and San Francisco have announced new restrictions to curb the spread of the disease, and an adviser to president-elect Joe Biden is calling for a new nationwide lockdown to prevent hospitals being overrun, something that could put a dampener on the economy once more.

In the meantime, the markets still seem to be riding high, with Goldman Sachs suggesting the S&P 500 could increase by up to 11% by mid-2021.

Elsewhere in the world, the FTSE 100 hit its highest level since August at 6,186, Japan's Nikkei 225 leapt to a 29-year high, and the CAC 40 in Paris was up more than 7%.

Hong Kong's Hang Seng added just over 1% and the Shanghai Composite went up around 2%.

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