Markets Mixed After Vaccine Rally; McConnell Backs Trump - What's up in Markets

Markets Mixed After Vaccine Rally; McConnell Backs Trump - What's up in Markets  | Nov 10, 2020 19:43

Markets Mixed After Vaccine Rally; McConnell Backs Trump - What's up in Markets

By Geoffrey Smith -- Markets steady themselves after a ferocious risk repricing, McConnell backs Trump's legal challenges, the EU revives tech tax threat and oil extends its rally ahead of API inventories: Here's what you need to know in financial markets on Tuesday, November 10th.

1. Global markets steady; bonds weaken again

Global markets steadied a little after the ferocious repricing of risk on Monday in response to Pfizer’s announcement that its experimental vaccine for treating Covid-19 was over 90% effective. While that is well above the level required to bring the pandemic under control, the announcement still hasn’t confirmed whether the drug is safe, and how long it will protect people for, two crucial missing pieces of the puzzle.

Chinese markets fell, unsettled by continued evidence of falling producer prices, but other Asian and European markets were broadly higher, with continued outperformance by cyclicals and financials. The Euro Stoxx 50 hit an eight-month high.

Safe assets, such as the 10-year German and U.S. Treasury bonds, continued to test their highest levels in over a month and eight months, respectively.

2. Stimulus hope fades as McConnell backs Trump's legal challenges

Senate Leader Mitch McConnell threw his weight behind the efforts of President Donald Trump’s lawyers to challenge the election result.

Analysts interpreted the move as likely to harm the chances of agreeing a fiscal stimulus package in the dying days of the current Congress.

The U.S. registered over 100,000 new cases of Covid-19 for the fourth straight day on Monday, with surges in California, Texas and New Mexico. California Governor Gavin Newsom said the reopening process would have to be scaled back in some counties.

Nationwide hospital admissions, at over 59,000, are set to break a new record for the year.  

3. Stocks set to open mixed, with rotation into value continuing

U.S. stock markets are set to open mixed as the post-Pfizer rally is reassessed, but cyclicals are still clearly outperforming the growth and momentum names that have notched the biggest gains during the pandemic

By 6:30 AM ET (1030 GMT), Dow Jones Futures were up 192 points, or 0.7%, while S&P 500 Futures were down 0.3% and NASDAQ Futures were down 1.9%.

Stocks likely to be in focus when the markets open include Beyond Meat (NASDAQ:BYND), which fell over 20% in after-hours trading on Monday after posting a surprise loss.

Among the biggest gainers are financials, whose lending margins are likely to be dramatically improved by the sharp rise in bond yields over the last week.

Rockwell, DR Horton and Advanced Auto Parts all report earnings before the bell.

4. Europe revives tax threat to Tech giants

The European Union continued to set out its stall for the new U.S. administration by reviving its threat to impose new sales taxes on digital companies if there is no international agreement on how to tax them.

The Trump administration had walked away from a multiyear process on work for a new framework agreement under the auspices of the Organization for Economic Cooperation and Development earlier this year.

The announcement comes a day after the EU imposed tariffs on Boeing (NYSE:BA) and other U.S. producers in line with a WTO ruling that the aircraft maker received illegal support from the U.S. government.

Elsewhere in Europe on Tuesday, German economic sentiment, as measured by the ZEW index, fell for a second straight month as Germany posted a new record of Covid-19 cases in intensive care.

U.K. job losses also hit a new monthly record and the jobless rate hit a four-year high as the government’s wage support scheme petered out.

5. Oil extends gains; API eyed

Crude oil prices added to Monday’s gains on hopes that a Covid-19 vaccine will allow the reopening of the world economy to proceed earlier than thought.

By 6:35 AM ET, U.S. crude futures were up 1.2% at $40.73 a barrel, while the international benchmark Brent Oil Futures was up 1.4% at $42.95 a barrel.

The American Petroleum Institute will release its weekly estimate of U.S. inventories at 4:30 PM ET, as usual.

There was little impact from the news that Azerbaijan and Armenia have agreed a ceasefire in their conflict over the enclave of Nagorno-Karabakh, which removes any threat of disruption to flows through the Baku-Tbilisi-Ceyhan pipeline.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (India) English (Canada) English (Australia) English (South Africa) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Polski Português (Portugal) Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes


Download the App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors. is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.