The global rise in the stock market in the face of advances in vaccines
The American pharmaceutical giant and its German partner BioNTech are the first to present positive results from a large-scale clinical trial of a coronavirus vaccine. They announced on Monday 9 November that the current large-scale phase 3 trial is the last step before applying for a licence for the vaccine, which is 90% effective.
"More than eight months after the start of the worst pandemic in more than a century, we believe that this step represents a significant step forward for the world in our fight against COVID-19," said Albert Bourla, President and CEO of Pfizer.
The news of the vaccine comes at a time when the coronavirus is once again spreading at a rapid pace, with record levels of new cases that could lead to more partial closures and more months of social distancing and increasingly restrictive measures.
But this news has led not only to an increase in contagion, but also to a rise in global stock markets, which have been buoyed by this as yet unconfirmed global hope. Until Pfizer unveiled the good news, the day passed with moderate increases in the major European countries of between 1 and 2%.
Stocks skyrocketed and bond yields rose as investors gambled that Pfizer's COVID-19 vaccine would help the global economy recover and revive cycles and other industries that have been hit by the pandemic.
The gains on Wall Street propelled the MSCI Global All Country Index to a new high, up 1.3% today after the Dow recorded its best day since June, according to CNBC estimates.
The Dow rose nearly 3%, while the Nasdaq fell 1.5% as lagging sectors such as energy and finance overtook technology. Leisure sectors, such as Netflix and Zoom, experienced significant declines, but airlines increased by 16%. S&P's energy sector, even with a 45% decline this year, grew by more than 14%, and the financial sector by 8%.
In this scenario, a barrel of West Texas Intermediate (WTI) oil, the benchmark for the United States, was quoted at $40.61, while Brent crude oil, the benchmark for Europe, was quoted at $42.7.
Ibex 35, on the other hand, closed Monday with an 8.57% rise, the highest in a decade, after climbing nearly 10% in a day of widespread increases in Europe, according to the country.
The rally began in the Asia-Pacific markets, where the Japanese Nikkei reached its highest level in 29 years. Stocks soared, much to the relief of Joe Biden who won the US presidential election.
Beyond the vaccine, with the arrival of Joe Biden in the White House, parishioners are following with particular interest the President-elect's ability to push through a major fiscal shock plan to revive the world's largest economy.
Biden was the first conversation in the market, with investors welcoming the prospect of a more unified policy, reduced trade tensions and potentially a new Covid-19 fiscal stimulus package, according to The Guardian.
Stocks rose last week as investors welcomed a divided government, with a Democrat in the White House, but Republicans still have the Senate. There were fears that Biden would implement unsellable policies, such as higher corporate and capital gains taxes, if the Democrats took control of Congress.
JPMorgan strategists said the S&P 500 should be at 4,000 by early next year, based on the combination of Biden's victory and the vaccine.
As the virus continues to spread. Measures to slow the progress of this global pandemic have a significant economic cost to the world. With the number of daily infections increasing only in the world's leading power and in the midst of the greatest recession in nearly a century, political uncertainty immediately takes second place to health issues.
Although Pfizer will not be widely publicised for several months, investors are betting that the economy will reopen and people will travel, return to work and be able to meet in public again next year.