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Finance Update – A Spoonful of Pfizer

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Americas – Trump: vaccine announcement delayed to hurt me

Futures markedly down this morning, US indices reacted favourably at first to Pfizer’s news of successful COVID vaccine tests. The Russell2000 soared 4.21%, the DJ 2.95% and the S&P500 1.17%. The NASDAQ, conversely, lost a per cent and a half!

Never one to spoil a celebration, President Trump immediately accused Pfizer of delaying the announcement until after the elections. Meanwhile, President-Elect Biden is threatening legal action if the General Services Administration delays the presidential transition.

Europe – Indices soar

Despite the Eurozone returning to lockdown, European indices also had a bonanza yesterday – the Ibex adding 8.57% followed by the CAC’s 7.57% and other majors not far behind. The pound yesterday double-bottomed after Parliament rejected Boris Johnson Internal market Bill that would enable breaching the original Brexit treaty.

This morning sees the pound in a hopeful mood after employment data shows a better than expected -29.8K increase in benefit claimants in October, albeit alongside a 3-tick increase in unemployment to 4.8% in September. Earnings also shot up by 1.9% – double the previous quarter, but the UK’s BRC Retail marker fell to 5.2% YoY in October – this despite stockpiling as lockdowns returned towards the end of the month.

Germany’s trade surplus increased but at €17.8 bn missed expectations by ½ a bn. On the other hand, the EU’s Sentix Investor Confidence index for November didn’t fall as much as expected, landing at -10.

Asia – Enthusiasm muted

Asian indices are reacting less enthusiastically to the Pfizer festivities this morning, Chinese benchmarks down with the Hang Seng up a mere 0.44% and the Nikkei 0.25% – all this after Chinese CPIs decidedly contracted in October 0.3% MoM while Japan’s Current Accounts fell to ¥1660.2 bn in September.

Meanwhile, in New Zealand, Credit Card Retail Sales soared by 8.8% MoM in October.

Corporate – Canopy soars 76% on earnings

Reuters also reports that alternative energy giant NextEra has put in a $15bn bid for Evergy Inc – a US-based electricity provider.

But yesterday’s big news came from Pfizer, which announced a 90% success rate in 3rd-stage trials for its COVID-19 vaccine. Shares jumped from $36 to $41 on the announcement before settling back halfway at $39.20. Elli Lilly shares jumped 5% after hours as the US’ FDA approved emergency use authorisation for its antibody COVID treatment, while Zoom plummeted 18% on vaccine optimism.

In earnings, McDonald’s had a turbulent day – starting with a $10 bull gap before losing double that to lose 1.54% throughout the session – all this thanks to an 11% YoY improvement in EPS at $2.35 and a 2% decline in revenues YoY to $5.4 bn.

Beyond Meat shares lost 4.05% and another 23% after hours despite a 2.7% increase in revenues. The $94.4 mn figure missed expectations. Aurora (+14.9%) revenues rose by 0.4% YoY to $52.3 mn and Canopy (+4.45%) soared by 76% YoY to $104 mn in the previous quarter.

Still ahead – Henkel, Adidas, Land Securities, Siemens, Lyft, Rockwell and Deutsche Post report earnings, while American Express pays dividends.

Commodities – Gold plummets

Besides Zoom, another loser from the Pfizer announcement was safe-haven gold, which yesterday plummeted by $100 per troy ounce on the announcement before regaining some losses – returning the nugget to its 1880 range from a month ago.

And, after accompanying equities rapidly up above the $41 mark yesterday, WTI crude lost half its gains towards the Asian session to land at $39.69. Reuters reports hedge funds closing petroleum positions as lockdowns and fresh cases stoke fears of a second recession. In response, OPEC+ signalled that its production increase, scheduled for January, could be postponed.

Events

10:00 AM GMT EU & Germany ZEW economic sentiment
11:00 AM GMT US NFIB Business Optimism. Redbook at 1:55 PM and Jolts Job Openings at 3.
08:00 PM GMT NZ House Prices. Interest and Policy statement at 1 AM (+1)
11:30 PM GMT Australia Consumer Confidence

Analysis

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