2020-11-09 22:05
publication
2020-11-09 22:05
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It is possible that Monday’s session brought breakthrough information for the financial markets. The real chance for a Covid-19 vaccine has sparked a sharp overvaluation of assets. The shares of companies most affected by lockdowns rose sharply, while the prices of gold and covid beneficiaries fell.
Americans define this information as “game-changer”. Pharmaceutical company Pfizer announced on Monday that it has a good candidate for an effective vaccine against Covid-19. Vaccine Candidate has been shown to be over 90% effective in preventing COVID-19 in subjects with proven no prior SARS-CoV-2 infection – Pfizer announced in a statement to investors.
The possible vaccine has not yet been thoroughly tested (also in terms of possible side effects), nor will it enter the mass market by the end of 2020. However, in the perspective of 2021, it completely changes the previous forecasts. This would potentially end the fatal policy of lockdowns and the suppression of economic life by the authorities. Scenarios assuming a strong economic recovery as early as next year would come back into play.
It is therefore hardly surprising that the markets reacted lively. The shares of Pfizer alone rose by over 15% at times, to end the day with a rise of 7.6%. It is not a single company, however, but the rotation of entire asset classes. Typically cyclical stocks, such as value. The prices of American Express increased by 21%, Boeing by 12%, JP Morgan Cahse by 13%, and Disney by nearly 12%. Oil companies did great after crude oil rose by nearly 8%. An effective, safe and mass vaccine in the medium term would mean the resuscitation of all these industries decimated by “anti-virus” lockdowns.
Therefore, weighed down by typically cyclical “classic” businesses, the Dow Jones was Monday’s strongest major New York index. But even in the case of the DJIA, the supply made itself felt at the end of the session. Dow Jones, which grew by more than 4.38% half an hour before the end of trade, finally limited the scale of profits to 2.95%. This does not change the fact that during the Monday session the Dow Jones industrial average broke the February peak, reaching a record value of 29,933.83 points. The round level of 30,000 points was at hand today, but eventually the DJIA ended the session nearly 850 points lower.
The S & P500 was clearly weaker, rising only by 1.17%, finishing with a result of 3,550.50 points. During the session, the S & P500 broke the August peak, setting a new all-time record at 3645.99 points. Again, a rather nasty big black candlestick appeared on the daily chart.
The Nasdaq came out poorly, with a 1.53% drop after a very poor end of the session. This is because this index is overloaded with large technology companies that have been the biggest beneficiaries of the coronavirus boom until today. Meanwhile, on Monday Amazon shares were discounted by 5.1%, Facebook by 5% and Netflix by 9%. Not to mention Zoom stocks, which lost over 17% of their value today.
In the context of an escape from covid types, it’s hard not to mention gold, the price of which fell by nearly 5%, or almost $ 100 per ounce. In this way, the dollar exchange rate of gold returned to the local lows from the end of September, but remained in the sideways trend lasting for three months. Silver was even more cheaper – by almost 8%.
Euphoria reigned on European stock exchanges, shattered by a policy of increasingly tight lockdowns over the past weeks. In Madrid, the IBEX35 jumped 8.6%, the Paris CAC40 gained 7.6% and the German DAX grew by nearly 5%.
Krzysztof Kolany
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