Any economic recovery depends on checking the pandemic, and investors pounced upon the news. Pfizer’s data is only preliminary and does not mean a vaccine is imminent. Jeenah Moon/Getty Images
COVID-19

Stocks surge on vaccine news, Biden victory

Associated Press Nov 9, 2020
Any economic recovery depends on checking the pandemic, and investors pounced upon the news. Pfizer’s data is only preliminary and does not mean a vaccine is imminent. Jeenah Moon/Getty Images

Stock markets rocketed higher Monday after Pfizer said early data show its coronavirus vaccine is effective and investors breathed a sigh of relief after days of U.S. presidential limbo ended with Democrat Joe Biden declared the president-elect.

Markets were already sharply higher on the U.S. election result when Pfizer said that data shows vaccine shots may be 90% effective at preventing COVID-19, indicating the company is on track this month to file an emergency use application with U.S. regulators.

Any economic recovery depends on checking the pandemic, and investors pounced upon the news. Pfizer’s data is only preliminary and does not mean a vaccine is imminent. Getting the vaccine to billions of people will be a massive undertaking, even if it is approved.

Dow futures jumped 4.2% higher while those for the S&P 500 rose 3.1%.

In Europe, France’s CAC 40 jumped 5.6% to 5,239, while Germany’s DAX surged 5.1% to 13,112. Britain’s FTSE 100 gained 4% to 6,145.

Markets were already buoyant about the result of the U.S. elections, which saw Biden win the presidency.

“This means less uncertainty, less turmoil in terms of foreign relations, and reversal of some futile policies which were put by the Trump administration,” Naeem Aslam, chief market analyst at Ava Trade, said in a commentary.

Many analysts expect trade tensions to de-escalate under a Biden presidency. Still, not all trade tensions are expected to vanish even if Biden rolls back some of the tariffs imposed by President Donald Trump on U.S. trading partners, especially China, in the past several years.

The European Union pressed ahead Monday with plans to impose tariffs and other penalties on up to $4 billion worth of U.S. goods and services over illegal American support for plane maker Boeing. That followed a World Trade Organization ruling in the U.S.’s favor over EU support for Airbus.

In Asian trading, Japan’s Nikkei 225 surged 2.1% to finish at 24,839.84. Australia’s S&P/ASX 200 added 1.8% to 6,298.80. South Korea’s Kospi advanced 1.3% to 2,447.20. Hong Kong’s Hang Seng rose 1.2% to 26,016.17, while the Shanghai Composite gained 1.9% to 3,373.73.

For now, investors seem inclined to shrug off Trump’s refusal to concede and threats of legal action. With Republicans expected to retain their grip on a majority in the Senate, they are betting on continuity in tax, regulatory and other policies, analysts said.

“Trump not conceding a loss is near-term noise looking to wrong-foot Biden at the start of his presidency while Republicans in a position to not concede ground on legislation may continue to frustrate Biden’s agenda,” Mizuho Bank said in a commentary.

If Republicans remain in charge of the Senate, chances for a big package of economic aid are weaker, and the Federal Reserve will likely need to step up with more support, said Jeffrey Halley of Oanda.

“If Republicans remain in charge of the Senate, chances for a big package of economic aid are weaker, and the Federal Reserve will likely need to step up with more support, said Jeffrey Halley of Oanda.

Despite rising infections and deaths from the pandemic, economies have continued to recover from the shocks of earlier shutdowns to combat outbreaks.

Customs data released Saturday showed China’s export growth accelerated in October, boosting the total so far this year back above pre-coronavirus levels for the first time. Exports in October rose 11.4% over a year earlier to $237.2 billion, up from September’s 9.9% gain, while imports rose 4.7% by value to $178.7 billion, decelerating from the previous month’s 13.2% surge.

Biden has vowed to move decisively to try to counter the worsening coronavirus pandemic, which has sapped economic growth, trade and travel, as the U.S. and Europe face a troubling rise in infections. Even if the strictest lockdowns don’t return in the United States, the worsening pandemic may dampen consumption and erase profits.

In energy trading, U.S. benchmark crude gained $3.16 to $40.30 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose $3.08 to $42.53 a barrel.

The dollar rose to 104.38 Japanese yen from 103.35 yen late Friday. The euro cost $1.1889, up from $1.1875.

COVID-19 Economy FAQs

Are states ready to roll out COVID-19 vaccines?

Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.

How is the service industry dealing with the return of coronavirus restrictions?

Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.

How are hospitals handling the nationwide surge in COVID-19 cases?

As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.

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