Dow 30,000 In Sight After Pfizer Vaccine Update, Boeing Surges on FAA 737 MAX Approval

Wall Street could test fresh all-time highs again Wednesday, even as investors eye rising COVID infection rates, and a slowing economic recovery, both at home and abroad.

The Wednesday Market Minute

  • Global stocks steady as markets look to vaccine relief as COVID infections continue to surge.
  • Pfizer says its developing coronavirus vaccine reaches a 95% efficacy rate following the final analysis of late-stage trials.
  • Worldwide fatalities top 10,800, the most on record, as U.S. cases rise by more than 1 million a week heading into the Thanksgiving holiday travel period.
  • Bitcoin tops the $18,000 mark for the first time in three years as the dollar slips lower and bond yields ease, while European inflation is tabbed at -0.3% in October.
  • Oil price extends gains ahead of EIA data as technical advisors to OPEC steer the cartel away from a planned paring of its 7.7 million barrel per day output limits.
  • Boeing shares gain after the FAA will approve the return of its grounded 737 MAX jet following fatal crashes in 2018 and 2019.
  • Wall Street futures suggest a firmer open following mixed third-quarter earnings from Target and Lowe's and stronger-than-expected October housing starts data.

U.S. equity futures climbed higher Wednesday, while the dollar continued to slide and bond yields drifted lower, as the global equity market rumbled on in the face of surging coronavirus infection rates and an uneven economic recovery in the United States.

Gains were also supported by news from Pfizer Inc.  (PFE) - Get Report that showed its developing coronavirus vaccine reached a 95% efficacy rate on the final analysis of its late-stage trials.

Softer-than-expected retail sales growth in October, which the Commerce Department said slowed to 0.3%, as well as word of caution from Federal Reserve Chairman Jerome Powell yesterday that "the next few months will be very challenging" looks to have reminded investors that any near-term boost from a vaccine breakthrough will first need to endure another slowdown in the world's biggest economy.

In fact, the U.S. is adding more than 1 million new coronavirus infections to its ledger each week, with fatalities set to top 250,000 in the coming days, as the pandemic accelerates into the winter months. Next week's Thanksgiving celebrations, as well, are likely to ignite a fresh wave of spreading as tens of millions of Americans travel home for the traditional family celebrations.

Housing starts for the month of October, however, were better-than-expected at an annual rate of 1.53 million units, up 4.9% from the same period last year.

Against that backdrop, and with both the Dow Jones Industrial Average and the S&P 500 within touching distance of their recent record highs, the start to the Wednesday session looks cautious.

Contracts tied to the Dow suggest a 100 point opening bell gain, with most of that coming from Boeing Co.  (BA) - Get Report, which is up 5.7% in pre-market trading after it was granted permission to return its grounded 737 MAX to service in the coming days. 

Futures contracts tied to the S&P 500, meanwhile, are priced for a modest 8 point gain, while those linked to the Nasdaq suggest a 20 point bump, following mixed third-quarter earnings from Target  (TGT) - Get Report and Lowe's  (LOW) - Get Report .

The muted tone in risk markets was offset by another surge in bitcoin prices, which topped the $18,000 mark for the first time in three years as the dollar retreated and 10-year Treasury note yields held under 0.85%.

In Europe, stocks were edging back towards an eight-month high in early trading amid reports of progress in trade talks between London and Brussels, which must come to an agreement on their future relationship prior to Britain's formal exit from the bloc at the end of the year.

The Stoxx 600 benchmark added 0.3% in the opening hours of trading in Frankfurt, with the euro heading towards the 1.19 mark against the U.S. dollar after October inflation data came in at -0.3%, prompting bets on extended monetary support from the European Central Bank next month.

Oil prices were also on the rise ahead of the Energy Department's weekly estimate of domestic crude stocks later this morning, with gains following a meeting of technical advisors to OPEC that look to have pushed the case to delay a planned boost in production next year that would have added around 2 million barrels per day, or 2% of global demand, to the cartel's output.

WTI crude futures contracts for December delivery, the U.S. benchmark, traded 44 cents higher from their Monday close in New York and were changing hands at $41.87 per barrel in early European dealing, while Brent contracts for January delivery, the global benchmarked, edged 54 cents lower to $44.29 per barrel.

In Asia, regional stocks held near the highest levels since 1987, with the MSCI ex-Japan benchmark edging 0.65% higher on the session, while the Nikkei 225 in Tokyo dropped from its recent three-decade high to close 1.1% lower at 25,728.14 points.