Adam Vettese, UK Market Analyst at eToro, has provided his daily commentary on traditional and crypto markets for November 24, 2020.
European markets have maintained yesterday’s momentum with news of easing lockdowns in the UK and France adding to the optimism. The FTSE is up 0.5%, the Dax up 0.4% and the Dow Jones leading way in the US futures market up 1%.
Markets around the world rose on Monday and overnight as further vaccine news, and a hint from outgoing President Trump about a smooth transition of power, all stoked the current rally.
Trump reportedly said he had recommended the General Services Administration, which helps transition to the new presidential regime, “do what needs to be done with regard to initial protocols”. The news helped calm fears about a disorderly handover of power to incoming President Joe Biden.
Elsewhere, AstraZeneca and the University of Oxford announced on Monday that their coronavirus vaccine is up to 90% effective, adding a third vaccine to the ones already announced by Pfizer and Moderna.
The latest pair provided more data than Pfizer and Moderna, and revealed an average efficacy of 70%, depending on the dosages given and time between doses. Crucially, AstraZeneca’s vaccine can be stored at refrigerator temperature, rather than requiring the extreme cold storage that poses a logistical challenge for the Pfizer and Moderna vaccines.
US markets closed higher in reaction, with the S&P 500 up 0.5% yesterday, before shares in Asia followed suit, with the Japanese Nikkei up 2.5% and Hong Kong’s Hang Seng up 0.1%.
Among standout shares, Tesla’s share price passed the $500 milestone for the first time, pushing its market cap close to $500bn. The leap came after analysts at Wedbush raised their bull-case price target on the stock to $1,000. The firm highlighted that currently, 3% of all auto sales are electric, a number it expects to more than triple to 10% by 2025.
Energy sector stocks jumps 7% to start week
On Monday, the Dow Jones Industrial Average led the way in the US with a 1.1% gain, versus +0.6% for the S&P 500 and +0.2% for the Nasdaq Composite. The top of the S&P 500 was dominated by energy names, with Occidental Petroleum, Apache, Marathon Oil and more all delivering double-digit gains after oil continued to hold well above the $40 a barrel mark. Overall, the S&P’s energy sector delivered a 7.1% gain on Monday. In the Dow, Chevron led the way with a 6.1% gain, taking its rally over the past month close to 30% and paring its year-to-date loss back below the 25% mark. Tech firms suffered a tougher day, with Apple down 3% and Netflix off by 2.4%, weighing on the technology-heavy Nasdaq Composite index.
- S&P 500: +0.6% Monday, +10.73% YTD
- Dow Jones Industrial Average: +1.1% Monday, +3.7% YTD
- Nasdaq Composite: +0.2% Monday, +32.4% YTD
AstraZeneca slips despite vaccine news, oil giants rally
London-listed shares were mixed on Monday, as alongside the AstraZeneca vaccine news there was new economic data that showed UK business activity shrunk in November — the first time since June that there has been a contraction. The FTSE 100 closed the day 0.3% lower, with AstraZeneca’s 3.8% loss proving one of the biggest drags on the index. Also towards the bottom of the pile were miners Polymetal and Fresnillo and safety equipment maker Halma. At the top of the index, Royal Dutch Shell, BP, International Consolidated Airlines Group, Rolls Royce and Lloyds all gained between 4% and 8%. The FTSE 250 was positive on Monday, led by Cineworld, which jumped 20% after it secured a financial lifeline in the form of a new debt facility. Travel firm Tui and airline easyJet also helped the index higher, with gains of 8.1% and 6.4% respectively.
- FTSE 100: -0.3% Monday, -16% YTD
- FTSE 250: +0.4% Monday, -10.5% YTD
