Daily market review

United States

The reopening trade resumed with a vengeance Monday after Moderna joined Pfizer in reporting encouraging results in its vaccine trials. The Dow Jones industrial index gained 1.6 percent, the S&P 500 rose 1.2 percent, and the NASDAQ 100 gained 0.8 percent.

Value/cyclical shares led a broad advance on news that Moderna's Covid-19 vaccine showed efficacy rates of 94.5 percent in its phase-three trials. Markets were cheered by additional news that Moderna's vaccine requires less refrigeration than Pfizer's vaccine. Moderna rose 9.6 percent.

The day's leaders featured energy, which rallied along with rising oil prices. Other outperformers included financials, materials, and industrials, the latter including airlines and cruise lines, which have been crushed during the pandemic. Among financials, PNC Financial, up 2.9 percent, was among the day's winners on news it will acquire Banco Bilbao Vizcaya's US unit. Other regional banks lifted by recovery hopes included Keycorp, up 6.3 percent, and Zions Bancorp, up 6.1 percent.

Lagging were the FAANGs, which held down technology and communications services, as these have benefited from the stay-at-home trade. Consumer staples also lagged, with health care the worst performer, as Pfizer, down 3.4 percent, pulled back from last week's gains.

Among other companies in focus, HD Supply Holdings rose 24 percent on news it will be acquired by Home Depot, which in turn gained 0.8 percent. Tyson Foods rose 3.8 percent on an earnings and revenues beat.

In economic data, the New York Empire State manufacturing index surprised to the downside with a reading of 6.3 in November, down from 10.5 in October with new orders and unfilled orders limiting growth.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.07 to US$43.81 while spot gold fell 6 cents to US$1,886.90. The US dollar declined against most major currencies. The US Treasury 30-year bond yield rose 2 basis points to 1.67 percent while the 10-year note rose 1 basis point to 0.91 percent.


More positive vaccine news lifted equities Monday despite rising Covid-19 cases across both Europe and the US. The Europe-wide STOXX 600 rose 1.2 percent, the German DAX gained 0.5 percent, the French CAC rose 1.7 percent, and the UK FTSE-100 was also up 1.7 percent.

Trade-sensitive stocks including autos and basic resources were bolstered by better-than-expected Chinese industrial production figures. Germany lagged other European markets as the country appeared poised to implement more restrictive policies to slow the pandemic's spread.

Among sectors, outperformers included oil & gas, banks, autos, travel & leisure, insurance, basic resources, food & beverage, telecom, real estate, and industrials. Lagging were defensives including utilities, health care, and the stay-at-home trade including technology, personal & household goods, and media.

Among companies in focus, Vodaphone rose 7 percent after better-than-expected quarterly results and guidance. Smiths Group, the UK engineering company, gained 4.8 percent, and Sonova, the Swiss hearing aid maker, rose 2.9 percent after beating market earnings expectations. Banco Bilbao Vizcaya popped up 16 percent on news it will sell its US subsidiary to PNC.

Asia Pacific

Major Asian markets closed strongly higher Monday after the release of solid Chinese and Japanese economic data. Regional investor sentiment was also supported by the signing over the weekend of the Regional Comprehensive Economic Partnership, a major trade agreement that includes China, Japan, the ASEAN countries, Australia, South Korea, and New Zealand.

Japan's Nikkei and Topix indices outperformed with increases of 2.0 percent and 1.7 percent respectively, while the Shanghai Composite index and Hong Kong's Hang Seng index advanced 1.1 percent and 0.9 percent respectively. Australia's All Ordinaries index finished up 1.2 percent despite severe disruptions to trading caused by a technical fault that created "inaccurate market data" on the exchange. Authorities expect trading to resume Tuesday.

Chinese data published Monday suggest that the economy's recovery remained solid in October with three key indicators showing month-on-month increases and steady or stronger year-on-year growth. Industrial production rose 6.9 percent on the year in October as it did in September, retail sales rose 4.3 percent on the year after advancing 3.3 percent, while fixed asset investment rose 1.8 percent year-to-date after advancing 0.8 percent.

Preliminary estimates show Japan's economy expanded at a record rate in the third quarter as activity rebounded from the record Covid contraction in the second quarter. Headline GDP rose 5.0 percent on the quarter, up sharply from a drop of 8.2 percent as household consumption, net exports, and global demand all strengthened considerably, offset by further weakness in investment spending.

India's wholesale price index rose 1.48 percent on the year in October, picking up from an increase of 1.32 percent in September, with stronger gains in prices of manufactured goods outweighing weaker changes in prices of food and fuel. Consumer price inflation data released last week showed an increase in headline inflation 7.27 percent in September to 7.61 percent in October, further above the top of the Reserve Bank of India's target range of 2.0 percent to 6.0 percent.

Looking ahead*

On Tuesday in Asia/Pacific, Reserve Bank of Australia minutes and the Singapore merchandise trade report are scheduled. In Europe, the Italian merchandise trade report is due. In North America, the following reports are on tap: Canadian housing starts, US retail sales, US import and export prices, US industrial production, US business inventories, and US housing market index.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies