Posted on Nov 9, 2020 at 2:02 p.m.Updated Nov 9, 2020, 7:29 PM
Already well oriented following the dissipation of uncertainty related to the US elections, the world financial centers literally flew on Monday, after the announcements of Pfizer and BioNTech on a future vaccine. The prospect of a vaccine “90% effective” against Covid-19, caused a real wave of euphoria.
In a single session, the European Euro Stoxx 50 index gained 6.36%. Madrid, Paris and Milan are the places to have benefited the most from the news, with increases of 8.57%, 7.57% and 5.43% respectively. For their part, Frankfurt and London advanced 4.94 and 4.67%. The Parisian index, which rose sharply above 5,000 points, had not experienced such a good session since March 24, when the markets rebounded exceptionally after the “corona crash”. In all, the CAC 40 has increased by 17% since October 29. It is still down almost 11% since the start of the year.
On Wall Street, a spectacular opening of session allowed the three major indices to register new historical records in “intraday”. The S&P 500 broke through 3,600 points for the first time and the Dow Jones approached 30,000, at 29,933.83 points.
While the stock market rebound had started last week – the best weekly performance since the spring for a number of indices – even though Joe Biden’s victory was yet to be achieved, so did hopes linked to the arrival of a vaccine could allay the remaining worries of investors.
The values most affected by the pandemic in demand again
The companies hardest hit by months of health restrictions have skyrocketed, while “containment” values lost their luster. The airline sector, tourism, automotive, real estate companies have benefited from the announcement of Pfizer and BioNTech. Within the CAC 40, Unibail-Rodamco-Westfield, the specialist in shopping centers – also on the eve of a crucial GA – took 24%. Airbus and Safran rebounded by nearly 19% and 14%. Bank stocks also benefited from the change in economic outlook with increases of between 14% and 18% for Société Générale, BNP Paribas and Crédit Agricole SA.
On Wall Street, 85% of S&P 500 values were up by the time of the European close, although enthusiasm subsided somewhat after Bill de Blasio’s statements. The mayor of New York has warned that the city was “Dangerously close” of a second wave of coronavirus. Carnival, the cruise specialist, was back 35%, leading the S&P 500 hikes.
The Nasdaq, heavily weighted in technology stocks, highly prized with the pandemic, logically reacted less than the other two major indices. The e-commerce specialists Amazon and Alibaba lost around 3 and 2%. Netflix sold 6%.
The prospect of a return to activity and travel to normal levels also boosted oil. Already up at the start of the European session, the two benchmark prices for crude accelerated after the two laboratories announced. WTI in particular recovered 9%, again above $ 40.
On the other hand, US rates, which had eased sharply pending the victory of Joe Biden, suddenly started to rise. The 10-year Treasuries yield recovered 14 basis points at mid-session, approaching 1%, a threshold that has not been crossed since March.