The Monday Market Minute
- Global stocks power higher on AstraZeneca vaccine update, which showed a 70% efficacy rate across all doses in late-stage trial data.
- Asia MSCI ex-Japan benchmark hits an all-time high in overnight trading, helped by a weaker U.S. dollar, which traded within a whisker of multi-year lows against its currency peers.
- European PMI data for November showed contraction in the region's core economies, capping gains for stocks in early trading in Frankfurt.
- Oil prices extend recent rally as OPEC leader prepare for next month's summit, with a new WTI contract topping $43 a barrel.
- Wall Street futures suggest a firmer open to kick-off the Thanksgiving holiday week, with just 13 earnings reports expected over the next three days as the third quarter reporting season comes to a close.
U.S. equity futures jumped higher Monday, while the dollar tested multi-year lows and oil prices extended gains, as investors opened a holiday-shortened week on a bullish note following positive vaccine news from AstraZeneca (AZN) - Get Report.
Some of the market's early gains, however, were pared by a report from the Wall Street Journal that suggested the White House is considering new trade-related actions against China.
The British pharmaceutical group, working with researchers from Oxford University, said their developing coronavirus vaccine reached a 90% efficacy rate under certain doses, while averaging around 70% under all conditions, following data from late-stage trials published Monday.
The news helped boost European stocks, as well as U.S. equity futures, and added to hopes that recent vaccine breakthroughs from Pfizer PFE and Moderna (MRNA) - Get Report will result in broader program roll-outs in the coming months as infection rates in the U.S. continue to spike heading into the Thanksgiving holiday weekend.
In fact, Dr. Moncef Slaoui, chief scientific adviser for "Operation Warp Speed", told CNN Sunday that the Food & Drug Administration will examine Pfizer's Emergency Use Authorization application on December 10, adding that healthcare workers could receive doses of the vaccine in the days that follow.
However, he also noted that around 70% of the U.S. population would need to be vaccinated in order to develop so-called herd immunity, setting up an enormous challenge to President-elect Joe Biden and his incoming administration, which has yet to be granted access to the Centers for Disease Control's plans by outgoing officials loyal to President Donald Trump.
U.S. equity futures look set to power higher, however, in what is likely to be a muted week in terms of risk headlines ahead of Thursday's market holiday, with contracts tied to the Dow Jones Industrial Average indicating a 105 point opening bell gain and those linked to the S&P 500, which is up 8.8% for the month, priced for a 13 point advance. Nasdaq futures suggest a 45 point bump.
Only 13 S&P 500 companies are expected to report third quarter earnings this week, with a flurry of retail-focused updates from Best Buy (BBY) - Get Report, Gap Inc (GPS) - Get Report, Dollar Tree (DLTR) - Get Report and Nordstrom (JWN) - Get Report scheduled for Tuesday.
With around 95% of the benchmark reporting so far, third quarter earnings are likely to fall 6.7% from last year, according to Refinitiv data, and are forecast for another 11% decline over the three-months ending in December.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, slumped 0.32% in overnight trading at 92.068, the lowest since late August and just a whisker from levels seen in May of 2018.
In Europe, a weaker-than-expected reading of November business activity, which showed a contraction of growth in the region's three largest economies, kept a lid on early gains following the AstraZeneca vaccine update, with the Stoxx 600 rising 0.05% in Frankfurt and Britain's FTSE 100 sliding 0.3% in London as the pound jumped to 1.3386 against the dollar.
Overnight in Asia, Japan's Nikkei 225 was closed for the country's Labor Thanksgiving holiday, allowing the region-wide MSCI ex-Japan index to gather the bulk of the bullish action and lift the benchmark 0.82% to a fresh all-time high of 630.61 points.
The weaker U.S. dollar, as well as AstraZeneca's vaccine news, boosted global oil markets as well, with extended bets that OPEC members will delay a planned paring of their existing production cuts -- which were meant to go from 7.7 million barrels per day to 5.5 million at the end of the year -- when they meet next month in Vienna.
WTI crude futures contracts for January delivery, the new U.S. benchmark, traded 54 cents higher from their Friday close in New York and were changing hands at $42.96 per barrel in early European dealing, while Brent contracts for January delivery, the global benchmark, rose 74 cents to $45.70 per barrel.