Stocks Surge to All-Time Highs on Vaccine Optimism
[Ensure you have all the info you need in these unprecedented times. Subscribe now.]
Stocks surged around the world and bonds tumbled after a large-scale coronavirus vaccine study delivered the most-promising results in the battle against the worst pandemic in a century.
The S&P 500 and the Dow Jones Industrial Average climbed to all-time highs on news that the COVID-19 shot being developed by Pfizer Inc. and BioNTech SE prevented more than 90% of infections. Novavax Inc.’s vaccine received a fast-track designation from U.S. regulators, bolstering optimism. All the enthusiasm pushed up companies that have been hit hard by the economic toll of lockdowns such as small caps and travel stocks, with American Airlines Group Inc. and Carnival Corp. soaring more than 22%. Stay-at-home companies Zoom Video Communications Inc. and Peloton Interactive Inc. plunged at least 18% on hopes that a return to normal is on the horizon.
A credit derivatives index that measures the perceived risk of high yield dropped by the most in seven months, with junk-rated companies hitting the market in droves to take advantage of a plunge in borrowing costs. Oil soared, while gold, the Japanese yen and the Swiss franc slumped.
Investors pulled out of haven assets and poured cash into markets that are closely tied to economic growth, with a gauge of global stocks also hitting a record high. President-elect Joe Biden on Nov. 9 announced a new coronavirus task force as his transition team seeks to fulfill a campaign promise to develop a dramatically different approach from President Donald Trump’s to contain the pandemic. The top infectious disease expert in the U.S. Anthony Fauci says the COVID-19 vaccine being developed by Pfizer will have a “major impact” on everything the country does with regard to the coronavirus going forward.
“The bull market has a ton of ammunition to keep going,” said Chris Larkin, managing director of trading and investing product at E*Trade Financial. “With more certainty around the election, a strong quarter of earnings across many sectors, and extremely positive news on the vaccine front, there is little to hold us back.”
Elsewhere, the Australian dollar-yen cross — a commonly watched risk barometer — surged by most since June. The Turkish lira soared after the weekend resignation of the country’s economy czar and the dismissal of the central bank chief.
Want more news? Listen to today's daily briefing:
Subscribe: Apple Podcasts | Spotify | Amazon Alexa | Google Assistant | More
