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17.11.202012:59 Forex Analysis & Reviews: S&P 500 and Dow Jones hit record highs amid high hopes for COVID-19 vaccine

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At the close of trading on Monday, US stock indices showed strong growth, in which the S&P 500 and Dow Jones reached record levels. The reason for this is the announcement of American biotechnology company, Moderna Inc, about the high effectiveness of its COVID-19 vaccine.

The broad-based S&P 500 index increased 1.17% (to 3,627.01 points), the Dow Jones Industrial Average jumped 1.60% (to 2,9951.36 points), and the technology-based NASDAQ rose 0.80% (to 11,924.13 points).

Exchange Rates 17.11.2020 analysis

Shares of Moderna Inc immediately rose 9.6% (to $ 97.95 per share) after its representatives announced that its experimental drug showed 94.5% effectiveness in preventing COVID-19.

Earlier, pharmaceutical companies, Pfizer and BioNTech, reported successful trials of the vaccine that exceeded all expectations.

Promising data on the vaccine instantly supported the shares of cyclical, small-cap and undervalued companies.

Thus, the securities of companies from the tourism and transportation sector (United Airlines Holdings Inc, American Airlines Group Inc, Carnival Corp and Norwegian Cruise Line Holdings Ltd), which lost more than half of their market capitalization in 2020 due to the pandemic, jumped by 4.5-9.7% on Monday.

However, the positive news about the effective vaccine was followed by information about an uncontrolled increase of COVID-19 infections around the world. In forty US states, a huge daily incidence was recorded. Many governments decided to tighten social distancing measures as much as possible.

Despite this, investors hope that in the very near future, the economy will feel the positive effect of a successful vaccine. However, the market recovery is likely to be uneven, despite favorable news about the emergence of new effective drugs. Experts say that the main mistake of investors is that they tend to look beyond the pandemic, particularly to the development of the economy in 2021, instead of focusing on the current difficult situation with the growing incidence of coronavirus in the United States, Europe and Asia.

In addition to information about the increase in the main indices, positive dynamics is observed among other market indicators. One example is the yield on 10-year US government bonds, which increased to 0.902% from 0.892% on Friday.

The Stoxx Europe 600 rose 1.2%, led by shares in banks and other sectors significantly affected by the pandemic. Among them are shares of oil and tourism companies.

Most major stock indexes in the Asia-Pacific region (APR) also rose on Tuesday, amid the news of successful vaccine trials. However, they cannot achieve a single positive impulse, so there is some diversity in the Asia-Pacific markets.

The Shanghai Composite index fell by 0.2% to 3,340.32 points, while the Shenzhen composite fell by 1.12% to 2,264.12 points.

The Hong Kong Hang Seng Index rose by 0.11% to 26.410. 39 points, while the South Korea's KOSPI jumped 0.28% to 2.547. 72 points.

Australia's S & P / ASX 200 also jumped 0.14% to 6493.1 points, and Japan's Nikkei 225 jumped 0.12% to 25939.05 points.

Desarrollado por un Irina Maksimova
experto de análisis de InstaForex
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