Global Markets Rally as Dow Jones Hits 30,000
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- Hope on the horizon thanks to vaccine announcement
- Positive trends characterize markets
A wave of optimism spread across the global markets on Tuesday as investors cheered progress toward a coronavirus vaccine and a smooth transition to a Biden administration. The US stock market surged to new highs on Tuesday led by the S&P 500 index, which closed at a record level of 3,635 points, up 1.62% on the day. The Dow Jones Industrial Average got the most attention as the benchmark index surged above the 30,000 milestones for the first time in history. The DJIA index closed at 30,046 points, up more than 400 points on the day, or 1.54%. The Dow Jones’ winning streak for November could become the best month for the index since 1987. Following the coronavirus lows, the Dow is up 60% from the March meltdown, defying pandemic and economic woes.
Vaccine expectations helped the upward momentum in the markets as there are now three companies who have discovered a remedy for Covid-19. AstraZeneca published new reports that show a vaccine efficacy rate in the region of 90%, beating previous estimations of 70%. AstraZeneca is set to prepare the data to be submitted for approval by authorities around the world.
The Sterling Fares Well Amid Vaccine Hopes
How does the Sterling react to current Brexit developments? The UK currency is making strong moves to the upside on Monday as the GBP/USD reached near a 3-month high at 1.3397, a price level not seen since Sep 2. The Cable has been trading in a solid upside momentum for the last two months, posting a 5.70% increase from a low of 1.2674 on Sep 23 to the current market price of 1.3390.
The prospect of a Covid-19 vaccine is also adding fuel to the Great British Pound’s run. The UK may start administering Pfizer’s coronavirus vaccine, starting December 1, ahead of the US. As reported by the British press, Pfizer’s vaccine candidate may receive the needed approval this week.
The GBP/USD is benefitting from the increased optimism that the UK is beginning to reverse the trend in confirmed infections as the country is now under a second lockdown. As virus cases are declining, the British government is set to discuss the easing of restrictions to allow families to gather for Christmas. Prime Minister Boris Johnson, who is still self-isolating, is scheduled to remotely hold a press conference later today in which he is expected to reveal a new tier system within the context of his Covid Winter Plan.
On the economic data front, earlier today the latest PMI data was released, showing the UK economy falls back into contraction as Services PMI for Nov came at 45.8 vs 52.3 expected. Composite PMI posts better than expected data at 47.4 vs 42.5 along with manufacturing PMI, also beating expectations with 55.2 vs 53.3 expected.
European markets assets remain relatively unchanged as benchmark indexes are trading flat to posting modest gains. The DAX is up 0.24%, followed by the French CAC40 up about 0.20%. The FTSE100 shows a minor loss of 0.18%.
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