“The vaccines offer the promise that major disruptions from the pandemic will disappear from the scene in 2021,” said Stephen Innes, chief global market strategist at Axi. “Economic life will gradually heal; the world will begin to emerge from all the human suffering caused by the virus.”
Moderna said he would ask US and European regulators on Monday to authorize the emergency use of his COVID-19 vaccine. Its shares jumped 15.8%
Moderna is following Pfizer and its German partner BioNTech to begin vaccinations in the United States in December. British regulators are also evaluating the shot from Pfizer and another from AstraZeneca.
All of this hope is pushing investors to look beyond the grim present, with coronavirus numbers and hospitalizations increasing in the United States, Europe and elsewhere. The worsening pandemic is forcing governments to lower varying degrees of restrictions on businesses, and concern is that it will keep customers squatting in their homes, regardless of the type of home orders. Experts warn of a potentially brutal winter.
Instead, investors are focusing on a global economy that, next year, may be close to normal after the large-scale vaccine rollout.
This helped the stock rally widen. As Wall Street’s recovery began this spring, it was Big Tech that carried the market higher on expectations that working from home and other trends would mean bigger profits for them.
But hopes of a more widespread economic recovery are now boosting stocks of companies whose profits are more closely tied to the strength of the economy.
Energy stocks on the S&P 500 are set to rise nearly 32% this month, nearly triple the gain in the overall index. It’s a sharp turnaround from earlier this year, when oil prices fell as the pandemic kept planes, trucks and factories around the world idling or idling. Occidental Petroleum has jumped nearly 80% this month, although it is still down around 60% for 2020.
Financial stocks were also big winners on expectations that a stronger economy will create a stronger job market and higher interest rates. This could mean that more people will repay loans made at rates more profitable for banks. Citigroup has jumped about 36% this month, although it remains down almost 30% for the year so far.
The smaller stocks in the Russell 2000 Index are on track for a nearly 20% rise this month.
In European stock markets, the German DAX returned 0.6%, but other markets were weaker. The French CAC 40 fell 0.1% and the London FTSE 100 fell 0.4%.
In Asia, Japan’s Nikkei 225 0.8%. After trading ended, Koichiro Miyahara, the head of the Tokyo Stock Exchange, resigned to take responsibility for a huge system glitch that shut down trading last month. The one-day outage on October 1 was the worst on record for the world’s third-largest exchange.
South Korea’s Kospi fell 1.6%, Hong Kong’s Hang Seng fell 2.1%, and Shanghai stocks fell 0.5%.
While the United States and Europe have remained hampered by high rates of infections, China’s economy is growing after successfully containing the pandemic. A report showed that growth in its manufacturing sector picked up in November.
The 10-year Treasury yield climbed to 0.84% from 0.83% on Friday night.