Opening Bell: Global Rally Slows After Vaccine Reality Check; Gold Rebounds
Investing.com | Nov 10, 2020 12:16
- Investors rotate out of tech shares and into value stocks
- Questions remain about Pfizer vaccine, tempering risk-on
- Gold pares losses
- On Wednesday Alibaba (NYSE:BABA) holds its annual Singles’ Day event, an online global shopping phenomenon that generated $38 billion of sales last year.
- European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey and Federal Reserve Chair Jerome Powell are among the speakers at an online ECB Forum entitled “Central Banks in a Shifting World” on Thursday.
- The US reports CPI and initial jobless claims on Thursday.
- The Stoxx Europe 600 Index was little changed.
- Futures on the S&P 500 Index were little changed.
- The MSCI Asia Pacific Index gained 0.6%.
- The Dollar Index was flat.
- The British pound gained 0.79% to $1.3268.
- The Japanese yen strengthened 0.1% to 105.26 per dollar.
- The Mexican peso strengthened 0.104% to 20.3338 per dollar.
- The yield on 10-year Treasuries increased less than one basis point to 0.93%.
- The yield on 30-year Treasuries declined one basis point to 1.70%.
- Germany’s 10-year yield decreased less than one basis point to -0.51%.
- Britain’s 10-year yield was unchanged at 0.372%.
- West Texas Intermediate crude increased 1% to $40.71 a barrel.
- Gold strengthened 1.3% to $1,887.45 an ounce.
- LME aluminum rose 0.16% to $1,904.75 per metric ton.
- Iron ore climbed 1.88% to $119.84 per metric ton.
Key Events/h2
Monday's global rally weakened in pre-US market trade on Tuesday, but haven assets continue to see increased demand and tech shares remain under pressure as investors realize that what was considered a vaccine breakthrough is called for a smaller coronavirus relief package then what Democrats want. This after the US Federal Reserve warned that if the pandemic’s economic impact worsens in the coming months, the financial markets could be severely hurt.
McConnell also said that President Donald Trump is within his rights to contest the presidential election results, increasing political instability.
During Monday's New York session, the S&P 500 index lost record gains made at the open, but still managed to close at a two-month high on unusually high trading volume after the news from Pfizer (NYSE:PFE) that a coronavirus vaccine it is developing with BioNtech (NASDAQ:BNTX) had prevented 90% of infections in a late-stage trial.
The Dow Jones Industrial Average closed more than 800 points higher, adding 3% to its value, also testing all-time highs.
The mega cap index came to a technical crossroads, developing a shooting star at its mid-February all-time high, while having provided an upside breakout of a range.
The NASDAQ 100 dropped as big tech companies, including Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX), were sold off amid the rotation out of stocks that had performed well during the pandemic, into those that had suffered and were suddenly considered bargains.
The VIX fell back to its lowest level since Aug. 28.
The volatility index had bounced off those lows later in Monday's session.
Yields, including for the US 10-year Treasury, reached the highest since Mar. 19.
The jump confirmed the return of risk-on sentiment.
Having jumped 2% in trading on Monday, the dollar remained little changed.
The greenback is stuck at the neckline of a H&S continuation pattern, signalling a resumption of the downtrend since the March highs.
Gold, which plunged 5% on the vaccine news, pared losses.
The recovery reignited investor appetite for risk, but the yellow metal nevertheless found support by the rising wedge. That is a testament to gold’s strength.
Oil extended Monday's powerful rebound to just below the $41 level, its highest point since Oct. 20, on the expectation that a vaccine will spur the economy to return to normal.
From a technical perspective, oil is in an ideal place for a short, having found resistance at the top of its falling channel, following a bearish wedge.
Up Ahead/h2
h2 Market Moves/h2 Stocks/h3
Currencies/h3
Bonds/h3
Commodities/h3
Currencies/h3
Bonds/h3
Commodities/h3
Commodities/h3
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.