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

What do I need to know about tax season this year?

Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.

How long will it be until the economy is back to normal?

It feels like things are getting better, more and more people getting vaccinated, more businesses opening, but we’re not entirely out of the woods. To illustrate: two recent pieces of news from the Centers for Disease Control. Item 1: The CDC is extending its tenant eviction moratorium to June 30. Item 2: The cruise industry didn’t get what it wanted — restrictions on sailing from U.S. ports will stay in place until November. Very different issues with different stakes, but both point to the fact that the CDC thinks we still have a ways to go before the pandemic is over, according to Dr. Philip Landrigan, who used to work at the CDC and now teaches at Boston College.

How are those COVID relief payments affecting consumers?

Payments started going out within days of President Joe Biden signing the American Rescue Plan, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.” Leer said this time around the checks are bigger and they’re getting out faster. Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.

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