(Bloomberg) — The global rally in stocks slowed on Tuesday while haven assets found support amid concern that a promising coronavirus vaccine study still has hurdles to clear.
The Stoxx Europe 600 Index fluctuated at the opening with some of Monday’s biggest gainers — travel and energy stocks — increasing more moderately. The gauge jumped 4% yesterday. U.S. equity futures erased earlier declines, signaling the underlying index may add to its two-month closing high reached Monday on news the coronavirus shot being developed by Pfizer Inc. and BioNTech SE prevented over 90% of infections.
Treasuries were steady as investors focused on the risks that fresh U.S. fiscal stimulus may now be less than expected. Surging coronavirus cases and legal challenges to the U.S. election outcome also weighed on sentiment.
After their knee-jerk reaction yesterday, investors are reappraising how much further they might switch out of havens into risk assets, and out of stay-at-home stocks and into pandemic laggards such as the travel and energy industry. While U.S. junk-bond yields fell to a record low, the vaccine focus is turning to the details of potential roll-outs.
“There are obvious questions about the sustainability of positive vaccine news flows – from efficacy, to scalability, to side effects, to distribution/refrigeration issue,” said Michael Purves, chief executive officer at Tallbacken Capital Advisors LLC.
Separate from the Pfizer trial, an antibody therapy from Eli Lilly & Co. was granted emergency-use authorization in the U.S. But the final-stage trial of a frontrunner Chinese vaccine candidate was halted in Brazil due to a serious adverse event. Experts cautioned questions remain to be answered before an inoculation can be rolled out.
The U.S. surpassed 10 million Covid-19 cases on Monday and appeared poised to hit record hospitalizations later this week. President-elect Joe Biden warned the nation faced a “dark winter” and announced a new coronavirus task force as his transition team seeks to fulfill a campaign promise to contain the outbreak.
The Federal Reserve warned that asset prices in key markets could take a hit if the pandemic’s economic impact worsens in coming months.
These are some key events coming up:
Alibaba holds its annual Singles’ Day on Wednesday, an online global shopping phenomenon that had $38 billion of sales last yearEuropean Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey and Federal Reserve Chair Jerome Powell are among the speakers Thursday at an online ECB Forum entitled “Central Banks in a Shifting World”Finance ministers and central bankers from the Group of 20 hold an extraordinary meeting Friday to discuss bolder action to help poor nations struggling to repay their debts.
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