Stocks rose sharply Wednesday, as coronavirus vaccines in Europe reach new phases of development. Oil also rebounded and solid earnings reports came in.
All three major U.S. indices rose, with the S&P 500 up as much as 2%. The 10 year treasury yield rose to 0.6% from 0.57%, as investors took a more risk-on posture.
Oxford University may be pushing towards the human testing phase of a virus vaccine, while an institute in Germany is doing the same, in partnership with Pfizer (PFE) - Get Report, which saw its stock rise more than 3%.
Oil rose 16% to $13 a barrel. Many investors are confident the price will reach $40 or higher by the second half of the year, as the market prices stocks for a second half and 2021 economic recovery, looking pas the troubles that will persist in the first half of 2020.
Chevron (CVX) - Get Report and Exxon Mobil (XOM) - Get Report shares both rose 4%. Oil stocks have led the rally off of the March 23 lows, with Exxon up 34% since that time, beating the S&P 500’s gain of 24%.
Earnings have been solid. Chipotle (CMG) - Get Report shares rose 6.4% after the burrito chain reported 3% same-store-sales growth on the back of an 81% increase in digital sales. The company said the worst of the sales hit from lockdowns looks to be behind the company. Food companies with a strong digital presence were rising Wednesday. Starbucks (SBUX) - Get Report, soon to report earnings, rose 3.21%. McDonalds (MCD) - Get Report, also soon to report, rose 2.5%.
More earnings are on the way and many on Wall Street have cautioned against high valuations met with several risk factors, as earnings estimates for 2020 have fallen.
Also of note, the Senate passed a $484 billion fiscal spending program, aimed at more testing for the virus and more relaxed lending to small businesses. The market was expecting this, as Congress and the Federal Reserve have both made it clear it will deploy as many dollars as need be to keep people and businesses liquid during lockdowns.
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