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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

Global stock markets hit record highs on Covid-19 vaccine hopes – as it happened

A general view of the City of London.
A general view of the City of London. Photograph: Andrew Redington/Getty Images

Closing post

And finally... World stock markets have closed at a fresh all-time high.

Those gains on Wall Street have propelled MSCI’s All-Country World Index up to a fresh peak, rising by 1.3% today after the Dow posted its best day since June.

That rounds off a day of soaring share prices around the globe, after Pfizer and BioNTech reported that their Covid-19 vaccine had been found to be more than 90 per cent effective in a late stage trial.

The rally began in Asia-Pacific markets, where Japan’s Nikkei jumped to its highest level in 29 years. Stocks jumped on relief that Joe Biden had secured victory in the US presidential election.

The Biden Bounce was the initial talk of the markets, with investors welcoming the prospect of more unified politics, lowered trade tensions, and potentially a new Covid-19 fiscal stimulus package.

The Democratic Party’s failure to claim a majority in the Senate (although they could tie it 50:50 by winning two runoff votes in January) has also reassured investors, as it will make it harder to push major tax reforms and regulation changes through.

But even the election took a back seat during the European session, when Pfizer announced that trials of its Covid-19 vaccine were showing encouraging results.

As my colleague Sarah Bosely explained:

Hopes are soaring that a Covid vaccine is within reach, following news that an interim analysis has shown Pfizer/BioNTech’s candidate was 90% effective in protecting people from transmission of the virus in global trials.

The vaccine performed much better than most experts had hoped for, according to the companies’ analysis, and brings into view a potential end to a pandemic that has killed more than a million people, battered economies and upended daily life worldwide.

The data is from an interim analysis and the trial continues into December but the headline results were emphatic. Regulators will be looking to process an emergency licence application at record speed.

Experts are hopeful that Pfizer’s news is a major breakthrough in combatting the global pandemic, Sarah adds:

John Bell, Regius professor of medicine at Oxford University, who is involved with the Oxford vaccine, said that the Pfizer team had shown “an amazing level of efficacy” and it could mean a return to normality by spring. “I’m the first guy to say that but I will say it with some confidence,” he told the BBC.

The news sent global markets rocketing higher. In Europe, investors raced to buy beaten down stocks such as airlines, retailers, property companies and pub chains.

Rolls-Royce, which makes and services jet engines, nearly doubled in value at one stage before closing 44% higher.

Here’s our news story on the market action.

Goodnight. GW

Updated

As in London, there were some remarkable moves on Wall Street today.

Financial stocks surged on the DJIA, with American Express rallying by 21% and JP Morgan gaining 13.5%.

Manufacturers also had a good day, with Boeing rising 13.7% and Honeywell up 6.9%.

But retail group Home Depot fell 5% (having enjoyed a surge in sales during the pandemic). Tech firms also slid, with Microsoft down 2.4% and Apple losing 2%.

Wall Street closes higher, but off earlier peaks

Just in: US stock market has closed higher, but stocks did dip from their earlier record peaks in late trading.

The Dow Jones industrial average has closed 834 points higher at 29,157, a gain of 2.95%.

That’s a very strong day -- it’s best since June -- but down on the intraday record high of 29,933 we saw at the open, when the Dow surged dramatically by over 1,600 points.

The Dow Jones industrial average, 9th November 2020
The Dow Jones industrial average today Photograph: Refinitiv

The S&P 500 index has also handed back some gains, ending the day 41 points higher of 1.17% at 3,550, having hit an intraday high at the open.

So neither index posted a record closing high - but it’s still a strong day, thanks to optimism about Pfizer’s vaccine.

The Nasdaq, meanwhile, fell 1.5% or 181 points to 11,713, as investors moved money out of the technology companies who have done so well this year.

Updated

Oil prices soars 8% on vaccine hopes

The oil price has racked up its strongest gains in five months today.

Brent crude settled at $42.40 a barrel, up $2.95 or 7.48% today - its biggest daily rise since 1st June.

US West Texas Intermediate crude surged by almost 8.5% today, to $40.29 per barrel, as traders anticipate that a successful vaccine deployment will allow economies to reopen more fully, meaning more demand for fuel.

Investment service Hargreaves Lansdown says today was its busiest ever session -- which may explains why it suffered those technical problems.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, explains that Pfizer’s vaccine trial results triggered optimistic that the pandemic will finally subside.

“Relief has washed over the global stock markets in waves today, the biggest breaking on the news a vaccine for Covid 19 could be landing sooner rather than later.

It’s prompted the busiest day ever in terms of volumes to the website and mobile app traffic at Hargreaves Lansdown.

Some customers, though, are fuming that they couldn’t trade the market on such a pivotal day.

The FT reports:

One customer, who declined to be named, told the Financial Times she had tried on four occasions to sell stocks but nothing appeared in her account. She was unable to reach Hargreaves’ customer services department and was “ready to scream after being on hold for 35 minutes”.

The transactions later appeared in the customer’s account but they showed duplicate trades, she said. “It doesn’t make me feel good about having my money with them,” added the customer.

FT: Hargreaves Lansdown suffers system outage amid record trading volumes

Marketwatch have spotted that this is turning into a remarkable month on Wall Street:

They write:

November is living up to its billing and already turning out to be an exceptionally productive month for the stock market.

Indeed, the Dow Jones Industrial Average was surging around 1,300 points, at last check, pushing the blue-chip index to its sharpest daily rally since March and near its first record close since Feb. 12.

The advance for the 124-year-old Dow industrials is a part of a powerful bullish swing higher that puts the benchmark on pace for its best six-session start to a month, up 11.7%, since 1939 and the best November gain so far since 1896, according to Dow Jones Market Data.

Here’s a breakdown of some of the major movers today:

Full story: Global stock markets surge after Pfizer Covid vaccine news

Here’s our news story on today’s remarkable rally across global stock markets:

Wall Street still at record peak

Traders on the floor of the New York Stock Exchange today
Traders on the floor of the New York Stock Exchange today Photograph: Courtney Crow/AP

Over in New York, the stock market is still trading at a record high.

Optimism about Pfizer’s vaccine, and relief over Joe Biden’s election victory, is driving a remarkable rally on Wall Street.

Here’s the situation, with just over two hours to go:

  • Dow Jones industrial average: up 1330 points or 4.7% at 29,653
  • S&P 500: up 111 points or 3.1% at 3,620
  • Nasdaq Composite: up 80 points or 0.7% at 11,976

Analysts at Citi Private Bank says Pfizer’s announcement is the “first major advance toward a Post-COVID world economy”.

More than any fiscal spending package or central bank lending program, a healthcare solution to COVID has the greatest potential to restore economic activity to its full potential, lifting deeply-depressed “social-close” industries.

In the process, it will generate vast savings for taxpayers and marginally reduce the inflationary impact of easy monetary policy. It will make extreme macro stimulus steps less necessary.

But they also caution against thinking that the pandemic, and its economic damage, is over - given the surge in cases in the US and Europe:

One should be careful not to assume a perfectly smooth path in markets in pricing out COVID as a damaging part of the immediate economic outlook.

The latest COVID infection rates in the US and Europe suggest coming months will still see significant growth constraints before the Post COVID world is achieved within 2021.

The Wetherspoon King and Castle pub in Windsor, Berkshire, which is temporarily closed under England’s new lockdown.
The Wetherspoon King and Castle pub in Windsor, Berkshire, which is temporarily closed under England’s new lockdown. Photograph: Maureen McLean/REX/Shutterstock

Shares in UK pub chains and transport companies also surged today, on hopes of a successful vaccine rollout.

David Madden of CMC Markets explains:

The pub trade also took a beating because of the lockdown, and now it is seeing a surge in demand. JD Wetherspoon, Marston’s and Mitchells and Butler are up more than 20%.

Stagecoach and National Express are also enjoying massive gains as a big step forward on the vaccine front offers a lot of hope in regards to more people taking public transport again.

This lifted the FTSE 250 index (of mid-cap companies) to an eight-month high tonight.

Here are the top-performing blue-chip companies in London today, who drove the FTSE 100 up by £70bn in its best day since March:

The FTSE 100’s top risers, 9th November 2020

The Financial Times says Rolls-Royce’s surge is its biggest ever (I’ve looked back 20 years, and I can’t disagree).

Rolls-Royce, the UK jet engine maker, closed up 44 per cent, its biggest ever one-day gain, according to FactSet.

Pfizer’s vaccine news relegated the US presidential election into second place in investors’ minds today, says Laith Khalaf, financial analyst at AJ Bell:

“It’s unthinkable that a piece of news could eclipse the result of a US presidential election, but Pfizer’s vaccine results have done just that. The stock market is experiencing a serious melt-up, and safe havens like gold and bonds have sold off.

“While the tremendous vaccine result is likely to underpin markets from here, investors shouldn’t be too gung-ho with their portfolios. Many stock prices have jumped in response to the news already, and so already reflect an improved outlook. Often the initial knee-jerk response of markets to big events, positive or negative, is an over-reaction which is tempered over time.

“The vaccine result clearly raises hopes that a return to normality is within touching distance, and while that is extremely positive for markets and businesses, we should be mindful that the economic impact of the pandemic is still being felt around the globe.

“Drip feeding money into the markets regularly remains a sensible course of action for investors, to take advantage of any dips, and to keep a lid on market risk in case of an unforeseen setback.

FTSE 100 jumped by over £70bn today

Today’s rally - the best since March - has driven up the value of Britain’s FTSE 100 index by just over £70bn, I reckon.

In addition, the FTSE 250 index has gained more than £18bn.

Online brokers have struggled to keep up with the demand to buy shares and funds today, following Pfizer’s vaccine trial results.

Financial services companies Hargreaves Lansdown and Charles Schwab have both reported technical problems that prevented some customers from accessing their accounts.

This must be highly frustrating for customers, as they watched stocks rally so sharply today.

European stocks hit 8-month high

European stock markets have closed at an eight-month high tonight, lifted by vaccine optimism.

The Europe-wide Stoxx 600 ended the day 4% higher, its best day since early May.

Travel companies, energy firms, banks and industrial groups led the rally.

Germany’s DAX index gained almost 5% while France’s CAC leapt by 7.5%.

Property group Unibail-Rodamco-Westfield’s shares jumped 25% in Paris, while Airbus gained 18.5%.

The smaller FTSE 250 index, which contains more UK-focused companies, has jumped over 5% by the close of trading.

SSP, which operates cafes and sandwich bars at UK airports and railway stations, has surged 51%. Cinema chain Cineworld (whose UK and US screens are currently closed) leapt 40%.

Cruise operator Carnival leapt 37%, and budget airline easyJet gained 35% -- some stunning gains, on hopes that a Covid-19 vaccine will allow the travel sector to reopen.

Updated

FTSE 100 posts best day since March

After a rollicking day’s trading, London’s stock market has just posted its biggest one-day gain since March.

The blue-chip FTSE 100 index has ended the day 276 points higher at 6186 points, a gain of 4.67%.

That’s its highest close level since 12th August, before fears of a second wave of Covid-19 began to weigh on markets.

It’s also the best day since 24th March, when the market began to recover from its crash when the pandemic began to sweep the globe.

Jet-engine maker Rolls-Royce ended the day up 43%, followed by airline group IAG (+25%) and conference organiser Informa (+22%).

Property development companies also surged, on hopes that office life might return to more normal times. British Land gained 21.9%, with Land Securities up 20.6%.

Updated

Credit rating agency Moody’s says Pfizer would see “substantial revenue and earnings opportunities” if its Covid-19 vaccine is approved by regulators.

Moody’s explains:

In addition to having positive social considerations, an approval of the vaccine will also bring substantial revenue and earnings opportunities to Pfizer.

These will mainly accrue during 2021 when we anticipate the largest number of doses will be manufactured and distributed. Pfizer has announced a manufacturing production target of up to 1.3 billion doses during 2021. The vaccine regimen involves two doses, 21 days apart. Even with competition from other vaccine developers, we anticipate the majority of this production will be sold. Several government bodies have already entered purchasing commitments, including the US agreeing to purchase 100 million doses for $1.95 billion, with options to purchase 500 million more. Japan, the United Kingdom, Canada and other countries have also entered agreements with Pfizer, and discussions are underway with the European Union.

We anticipate revenue opportunities beyond 2021, although significantly less quantifiable due to variables that will affect demand and pricing. Beyond competition, this will reflect the ongoing incidence of the virus itself, as well as whether there will be a need for ongoing revaccinations and, if so, how frequently.

But there are also major benefits for society if a vaccine is rolled out -- including “reduced mortality, lower burdens on hospitals and an easing of social distancing measures”.

Shares in Pfizer are currently up around 9% so far today, while BioNTech are up over 13%.

Back in July, the US government placed an initial order of 100 million doses for the Pfizer/BioNTech Covid-19 vaccine, for $1.95bn, to be delivered once it had received approval or emergency use authorization from U.S. Food and Drug Administration (FDA).

Under that agreement, the US could then acquire up to 500 million additional doses. Here’s the announcement... and here’s the story we wrote at the time.

The European Commission is also close to signing a deal for 300 million doses, points out EC president Ursula von der Leyen.

Reuters points out that:

Shares of other vaccine developers in the final stage of testing also rose with Johnson & Johnson up 4.5% and Moderna 5.5% stronger. Britain’s AstraZeneca was down 3.5%.

While the wider market soars, shares in certain technology companies are falling sharply today.

Video conferencing service Zoom, which has seen a surge in demand this year, has tumbled 16%.

Its stellar sales growth could slow once office workers are able to return to their desks, and people can actually meet family and friends in person rather than though their computer screens.

Peloton, which makes internet-enabled exercise bicycles, has also tumbled 16%. A successful vaccine rollout would allow people to return to their local gym, rather than taking part on online exercise classes.

But even so, both companies have widened their userbase considerably this year. Peloton’s shares are still up over 270% this year, while Zoom has gained over 500%.

Alastair George, chief investment strategist for Edison Group, says 2021 is suddenly looking a lot brighter....

“The announcement of an efficacious vaccine is the long sought after “game changer” in the battle against covid-19. While it will still be some time before social restrictions can be lifted, investors are skipping to the end of the pandemic movie.

With a favourable climax to the US presidential election behind us, 2020’s risks have diminished significantly. In our view, the market rally is firmly backed by the rapidly improving outlook for 2021.”

Shares in energy companies, miners, industrial companies and financial services firms are all soaring in New York this morning.

That reflects hopes that vaccines will be successfully rolled out to combat the pandemic, and bring some normality back to the global economy.

American Express is the top riser on the Dow, jumping by 18% in early trading.

Oil firm Chevron has gained 13%, following today’s surge in the oil price, with chemicals firm Dow Inc up 12.2%.

Aircraft maker Boeing, whose sales have been hammered this year, are up 13%, as are entertainment giant Walt Disney.

The Dow Jones industrial average this year
The Dow Jones industrial average this year Photograph: Refinitiv

Updated

Daniele Antonucci, chief economist & macro strategist at Quintet Private Bank, says Joe Biden’s election victory has reassured Wall Street, pushing stocks to record levels.

The markets were already expecting a Biden victory at the end of last week, but confirmation over the weekend is leading to a positive reaction in US markets this morning, as investors respond to diminishing uncertainty and prospects of fiscal stimulus without the threats of tax hikes and extra sector regulation.

Pfizer’s announcement that interim results show its Covid-19 vaccine has been 90% effective in large-scale trials is also boosting stocks of course, Antonucci adds:

Today’s news on vaccine approval should provide further market and economic support.

Updated

Wall Street hits record high

The statue of former U.S. President George Washington, stands across the New York Stock Exchange (NYSE), last week.
The statue of former U.S. President George Washington, stands across the New York Stock Exchange (NYSE), last week. Photograph: Andrew Kelly/Reuters

Newsflash: The US stock market has hit a fresh record high at the start of trading.

Excitement over Pfizer’s vaccine trial results have send shares soaring in New York, adding to relief that US election uncertainty has diminished.

The Dow Jones industrial average jumped by 1,523 points, or 5.3%, at the open to 29,846 points -- over its previous record high set in February.

The S&P 500 index, has also hit a new peak - jumping by 3.6% or 127 points to 3,636 points.

Paul Craig, portfolio manager at Quilter Investors, says Pfizer’s interim vaccine trial results are “hugely positive news”.

But Craig also warns that it won’t prevent economic damage, such as rising joblessness.

“However, this vaccine is not a silver bullet. Many of the issues facing developed economies now are structural and a vaccine is not going to prevent the large scale unemployment we are likely to see as a result of the lockdowns of earlier this year.

“For now, however, it is a positive and the companies benefiting certainly represent a ‘reopening trade’ of some sorts. This means the laggards of the past few months, the likes of hospitality and airlines, are up significantly, while the mega-cap tech stocks are flat. Indeed, some winners of the pandemic are seeing underperformance now as demand for them is likely to be hit. It is also hugely positive news for European economies, which have been hit hardest by the pandemic, so it will be interesting to see if this changes their fortunes over the longer-term and be seen once again as investible.

Nigel Green, the chief executive and founder of financial advisors deVere Group, fears investors are being too optimistic:

“The news is fuelling hope that economies around the world can soon return to normal and this is driving global stock markets.

“The vaccine development reports are, obviously, an important step in the right direction.

“However, I suspect the markets – which are already in a bullish mood due to the incoming Biden administration – are overthinking the positive vaccine news.

“They are being premature in their buoyancy.”

“There’s a long road ahead still. We will find out on the third week of November then as we wait to see if the vaccine can be approved or not.”

The FTSE 100 is still rallying extremely hard, up 5.5% or 328 points right now at 6238 points - the highest level since mid August.

That means the London market has gained over 11% during November; it rose sharply during US Election Week, even before today’s jump.

The FTSE 100 in the last 3 months
The FTSE 100 in the last 3 months Photograph: Refinitiv

Neil Wilson of Markets.com says the market is anticipating a recovery in ‘beaten-down’ sectors (such as travel and hospitality) in 2021:

Initial optimism is exceedingly high and could fade – we should not be jumping any guns here - but ultimately a vaccine that works effectively would be good for the economy and favours the cyclical parts of the market that we thought were going to struggle as a split Congress meant less stimulus. A working vaccine is positive for cyclicals and value – the reopening trade essentially.

The dichotomy in the market is stark: the biggest gainers in a frantic session today are among those stocks worst hit by the pandemic – travel and leisure chiefly, whilst Covid winners are doing poorly. We should be careful in overreacting – but it’s clear the market is forward looking and pricing in recovery in a number of beaten-down areas next year.

But Wilson also points out that several questions remain - both about vaccine rollout, and the impact on monetary policy.

When does the vaccine get rolled out fully? So how quickly are we ‘back to normal’ effectively? The UK has pre-ordered 30m doses of the vaccine, but what about other countries?

Given the US election result, does this make it harder to agree stimulus that is required now for the economy?

If this is a higher yield, higher inflation world, how does the Fed start to adjust? Will it even consider thinking about thinking about raising rates? Lots of Fed speakers this week to frantically rewrite their speeches.

Today’s rally has driven the pan-European Stoxx 600 index to its highest level in eight months.

As this chart shows, stocks have recovered much of their losses during the March crash, but are still down on the year.

The EU-wide Stoxx 600 index
The EU-wide Stoxx 600 index this year Photograph: Refinitiv

The Stoxx 600 is still down 8% since January, having jumped 4% today.

The UK’s FTSE 100 is down 17% for the year, despite jumping over 5% today.

The list of the top risers and fallers on the FTSE 100 is quite jaw-dropping right now.

Rolls-Royce is the top gainer, up 45% (!), on hopes that a Covid-19 vaccine will allow the travel industry to return to normality. That would boost demand for new jet engines and services for Rolls-Royce, which has just competed a cash call from investors to shore up its balance sheet.

British Airways parent company IAG is currently up 30% - it recently slashed its winter flight plans due to the latest Covid-19 travel restrictions in Europe.

Conference organiser Informa (+20%) and catering firm Compass have both surged by 20%, on hopes that more events could resume in the coming months.

But there are major fallers too. Ocado, whose grocery business has surged during the pandemic, has slumped by 11%. Takeaway operator Just Eat are down 7%, and DIY chain Kingfisher have lost 6%, as investors anticipate an end to lockdown restrictions.

The top risers and fallers on the FTSE 100 at 1pm GMT
The top risers and fallers on the FTSE 100 at 1pm GMT Photograph: Refinitiv

Adam Vettese, analyst at multi-asset investment platform eToro, says markets have roared back today amid vaccine optimism, but adds there is a ‘way to go’.

“After a tough period, markets have roared back on a series of positive developments. Following the momentum of Biden’s election victory, the news emerging from Pfizer and BioNTech of their vaccine trial showing 90% efficacy is a huge step forward.

The S&P 500 rallied to record highs off the back of the news while the Dow Jones and FTSE 100 have also both been up by more than 5% on the day.

“The vaccine news has injected optimism into travel stocks in particular. The sector has been among the hardest hit by COVID-19 restrictions and EasyJet and IAG moved strongly on the back of the announcement. Oil stocks jumped too as any sign of a recovery in the travel sector would stimulate demand.

However, while this is obviously a positive step forward there is still a way to go. Pfizer will only be able to submit its vaccine for emergency use once two months of data has been collected. All eyes will be on the third week of November then as we wait to see if the numbers show the vaccine can be approved.”

It’s important to remember that Pfizer’s very encouraging analysis comes from the interim results from its large-scale vaccine trials.

Those trials are continuing, so that Pfizer can confirm the effectiveness of the vaccine.

Health editor Sarah Boseley explains:

The interim analysis looks at how many of those who got infected with Covid-19 had had the new vaccine and how many had the placebo. So far, 94 people have become infected with Covid-19 – this is three times more than the company originally planned, but since the analysis shows that 90% had not received the vaccine, it implies that no more than eight people had received it.

To confirm its efficacy rate, Pfizer said it will continue the trial until there are 164 Covid-19 cases among participants in vaccinated and non-vaccinated groups. Given the recent spike in US infection rates, that number could be reached by early December, Gruber said.

The data is yet to be peer-reviewed or published in a medical journal. Pfizer said it would do so once it had results from the entire trial.

For that reason... Chris Scicluna, head of economic research at Daiwa Capital Markets, says investors should be ‘cautiously optimistic’ at this stage.

Scicluna says (via Reuters):

“The good news on the vaccine was always the upside risk for markets and if it is developed and rolled out quickly, then that does support the recovery and reflation narrative.

“But we have do have to be careful that the number of patients reporting results are still very low. So we need to be perhaps cautiously optimistic about this news and look at a lot more results. The results have not been peer reviewed yet but it is positive. They (Pfizer) are also upping their production forecasts and that is positive.”

Analyst: Pfizer vaccine news brings 'incredible relief'

The news that Pfizer and BioNTech say their Covid-19 vaccine is over 90% effective has brought ‘incredible relief’ to the financial markets, says Craig Erlam, senior market analyst at OANDA Europe:

With Covid wreaking havoc across Europe and the US once again, the Pfizer announcement has provided the lift we’ve all craved. The company announced that the Pfizer, BioNTech experimental vaccine is over 90% effective in preventing Covid-19, sending US future sky rocketing.

This is the news we’ve all been waiting for. The company plans to use emergency use authorization after the safety milestone is reached in late November, with no serious safety concerns having been identified in the interim analysis. Pfizer will then be able to produce 50 million doses in 2020.

We’ve been waiting for this moment for a long time and hopefully others will soon join Pfizer and BioNTech and enable us to break this vicious cycle of lockdowns and cautious reopenings that’s killing businesses, causing rising unemployment and massively adding to the debt load around the world.

This is the light at the end of the tunnel moment and just look at the reaction in the markets. One of incredible relief.

Updated

The oil price has surged too -- with Brent crude now up 8% today at $42.64 per barrel.

Pfizer’s vaccine announcement looks like “the game-changing panacea” that the oil markets have been waiting for, says Stephen Innes of Axi.

He adds:

Not only do markets get some certainty from the US presidential election, but they also get a boost from the latest vaccine headlines.

European stock markets have also rocketed higher, with Germany’s DAX index up 5.8% and France’s CAC gaining around 7%.

European stock markets, 12.15pm, November 09 2020
European stock markets after Pfizer’s announcement Photograph: Refinitiv

As in London, travel and transport company shares are surging, along with financial stocks and energy companies.

Wall Street to surge

Pfizer’s vaccine news is expected to sent shares soaring on New York stock market, when it opens in two hours.

Reuters has the details:

Futures tracking the S&P 500 have hit a record high after U.S. drugmaker Pfizer said its experimental vaccine was more than 90% effective in preventing COVID-19 based on initial data from a large study.

Pfizer and German partner BioNTech SE are the first drugmakers to show successful data from a large-scale clinical trial of a coronavirus vaccine. The companies said they have found no serious safety concerns so far, and expect to seek U.S. emergency use authorization later this month.

S&P 500 futures soared 3.78%, while Dow contracts jumped 4.69% in response, almost doubling the day’s gains. Nasdaq 100 E-mini gained 2%.

“This is very very important (news) because it validates the market view that the economy and earnings can receive that growth path that they had before the (COVID-19) crisis struck,” said Andrea Cicione, Head of Strategy, TS Lombard, London.

Stocks are surging even higher in London, driving the FTSE 100 up by 5.5% or 320 points this session.

And there are some dramatic moves. Airline group IAG is now up 35%, with Rolls-Royce up 30%, on hopes that a vaccine will indeed end the pandemic nightmare.

On the smaller FTSE 250 index, cruise operator Carnival is up 25%, as is holiday operator TUI.

Cinema chain Cineworld, which temporarily closed its UK and US sites last month, are up 36%.

This chart shows the moment the Pfizer vaccine news hit the wires, sending the FTSE 100 soaring over 4%:

The FTSE 100
The FTSE 100 today Photograph: Refinitiv

The blue-chip index is now at its highest level since mid-August.

FTSE 100 leaps by 4.4%

Britain’s stock market has surged higher following Pfizer’s announcement that its Covid-19 vaccine candidate is 90% effective.

The FTSE 100 index is now up 4.4%, or 260 points, at 6170, as investors hail the news.

Travel stocks are leading the charge. Jet-engine maker Rolls-Royce has jumped by 23%, with British Airways parent company IAG up 22%.

Hotel chains are also surging, with Intercontinental Hotels up 14% and Whitbread (which owns Premier Inns) up 16%.

Updated

Markets surge higher after Pfizer vaccine news

Newsflash: Global stock markets have just hit a new peak after Pfizer Inc announced that its experimental vaccine was more than 90% effective in preventing COVID-19.

Our health editor Sarah Boseley reports:

A vaccine against Covid-19 is in sight, with the announcement of the first interim results in large-scale trials showing the Pfizer/BioNTech candidate is 90% effective, according to the manufacturers, whose analysis shows a much better performance than most experts had hoped for.

The high percentage of those protected makes the findings compelling. Regulators have said they would approve a vaccine that is just 50% effective – protecting half those who get it. The company says there are no serious side-effects.

“Today is a great day for science and humanity. The first set of results from our Phase 3 Covid-19 vaccine trial provides the initial evidence of our vaccine’s ability to prevent Covid-19,” said Dr Albert Bourla, Pfizer chairman and CEO.

“We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen.”

The trial will continue until there have been 164 confirmed cases so there is potential for the efficacy rate to change, but a finding that 90% of infections were prevented will excite politicians and public health leaders alike and brings into view a potential end to the pandemic.

The phase 3 trials have involved more than 43,000 people. People from black and ethnic minority backgrounds appear to have been as well protected as everyone else, the company says.

Gathering the required safety data will take until the third week of November, says the company. The dossier will then be submitted to the regulators for approval. Speedy licensing could mean the first doses in healthcare workers by the end of the year.

This is triggering a major rally in the markets, pushing MSCI’s All Country World Index to a new peak - and driving Wall Street futures higher too.

The oil price has also rallied this morning.

Brent crude is up 3.3% at $40.74 per barrel, while US crude is 3.5% higher at $38.45 per barrel.

That wipes out Friday’s losses, and lifts oil away from the five-month lows seen just before the US election.

But... crude is still 40% lower than in January, before Covid-19 pushed the global economy into recession.

The Brent crude oil price this year
The Brent crude oil price this year Photograph: Refinitiv

Cases of Covid-19 are rising alarmingly fast in America, with 42 states reporting an increase in cases in the last week:

CNN: Covid-19 infections are increasing in more than 40 states

Saxo Bank’s John Hardy fears that the rising Covid-19 cases will hurt US economic growth again:

Brent crude and WTI crude oil rallied overnight as the dollar dropped and president-elect Biden promised swift action against the pandemic.

In the short term, however, the U.S. case count is likely to rise further thereby dampen the outlook for fuel demand.

European stock markets are holding onto their early gains, with the Stoxx 600 index up 1.5% today.

This chart shows just how rapidly stocks have bounced back in the last week, as election anxiety seeped away and investors unwound protective positions taken out in October.

The Stoxx 600 index
The Stoxx 600 index in the last three months Photograph: Refinitiv

In London, the FTSE 100 is up 80 points or 1.4% at 5992 points - on track for its highest close in four weeks. That will keep global markets at today’s record highs.

David Madden of CMC Markets says the bullish sentiment of last week hasn’t faded, despite president Trump’s refusal to concede the election.

For now, traders are not worried about a possibility of anything other than Joe Biden becoming US president in January.

It still seems likely that Republicans will maintain control of the Senate, and should that be the case, it would make it harder for a Biden administration to introduce tighter regulation for the tech and pharma sectors, as well as raise taxes.

Saxo Bank’s market strategist, Eleanor Creagh, is concerned that US politicians will not agree a large fiscal spending package, despite pressure to protect and stimulate America’s economy.

She writes:

We will not know for sure who has control of the Senate until run-offs in Georgia in January. Although the Republican candidates are favoured, and in prior run-offs in Georgia in 2004, 2008 and 2018 Republican candidates have won the Senate seats, there is still a small chance of the reappearance of the “blue wave” trade.

With Republicans retaining control of the Senate, the prospects of a deal on a large stimulus package are diminished. The $2trn plus that was on the cards under the blue wave could be as small as $500bn with an obstructionist Senate.

For now, markets seem to be ignoring this. The narrative appears to be that with Biden + Gridlock a smaller deal will eventually be reached, yields will not push higher as they would have with a larger stimulus package, the Fed will remain in play and rates will remain lower for longer, more QE and liquidity will be incoming and risk assets will be off to the races. In addition, no tax hikes or Trump shock factor – Biden is predictable and has not even taken office yet, markets like that certainty.

Indeed historically, the combination of a divided government has previously been the most positive outcome for the S&P 500. Although the sampling is limited and throughout those periods the economy was not in the throes of a global pandemic. The COVID-hit U.S. economy is in need of more than a skinny stimulus deal and an obstructionist senate will not be good for growth, confidence or corporate profits.

The prospects of a lame-duck deal being reached prior to Biden’s inauguration are slim, and the chances of a large stimulus package even post inaugurations are slimmer. On Friday, Senate Majority Leader Mitch McConnell doing little to recoup expectations for enacting a larger package, “Our economy is really moving to get back on its feet. That I think clearly ought to affect what size of any rescue package we additionally do.” It seems that unless the economic need becomes quite dire, a large package is not coming.

During his campaign, president-elect Biden pledged to deliver a clean energy revolution, and to rejoin the Paris climate change agreement as soon as he took office.

And this morning, former Bank of England governor Mark Carney has drawn parallels between the climate and Covid crises.

Carney warned that the pandemic shows how devastating global heating will be for companies that fail to invest and address systemic risks.

“We’ve made considerable progress and momentum is growing...The Covid crisis has not altered that. In fact what Covid has done - this tragedy has exposed the problems with undervaluing resilience, ignoring systemic risks and not investing up front.

And so it is with climate change: a crisis that involves the entire world, and from which no one will be able to self-isolate.”

Carney made the comments in his opening remarks for the Green Horizons Summit, which is taking place virtually in lieu of the COP26 - the UN climate change conference that was meant to take place in Glasgow but was delayed by a year due to the pandemic.

The ex-central bank boss was appointed the prime minister’s finance adviser for COP26 back in January.

Why global stocks are at record highs today

Optimism about the outlook for risk assets during a Joe Biden presidency has driven global stock markets to a record high today, reports Bloomberg:

“Stock markets have responded to the U.S. elections with relief,” Ulrich Urbahn, head of multi-asset strategy at Berenberg Bank, said by email. “One reason for this, apart from the reduction of hedges, may have been that the election result (president Biden, divided Congress) essentially secures the status quo but with less political tension.”

Urbahn said Berenberg remains constructive on equities and optimistic on European small caps, Asian emerging-market equities and bonds amid bets that the Covid-19 vaccine approval is approaching and that the global economy will recover next year.

Reuters explains that hopes of better global trade ties and more monetary stimulus are pushing stocks up:

“Why the excitement? Hopes of less diplomatic and trade angst, a lower dollar helps global rebalancing,” Chris Bailey, European strategist at Raymond James in London said in a note. “A lot of hope... but over two months until inauguration day!”

Investors expect Republicans to maintain control of the Senate, making it harder for a Biden administration to push through major policy changes, from a planned tax hike to a big fiscal stimulus package.

That would mean better earnings prospects for companies exposed to the world’s largest economy but also that the U.S. Federal Reserve might have to step in to further ease monetary conditions and support a pandemic-hit economy.

The Financial Times says markets are betting that President-elect Joe Biden will usher in a period of greater US economic and foreign policy stability.

What we lost in the previous week we made back last week and more. America has voted, Biden wins and the market likes it,” said Armin Peter, head of European debt syndicate at UBS.

Mr Biden has made fighting the coronavirus outbreak in the US a priority and is expected to spearhead an additional stimulus effort to cushion the economic blow from the pandemic, in addition to raising taxes.

Global stock markets hit record high

World stock markets have hit a fresh record high this morning, thanks to the Biden Bounce.

MSCI’s All Country World Index, which tracks shares in 49 countries, has powered to a fresh peak thanks to the gains in Europe and across Asia-Pacific markets today.

And with Wall Street set to rally too, the index could jump even higher.

The MSCI All-Country World Index rose as much as 0.5% to 595.98 on Monday, according to Bloomberg data, as optimism following the US election pushes equities higher.

That clears the previous intraday high set back in September -- before US election jitters and the second wave of Covid-19 cases knocked shares back.

The MSCI All Country World Index
The MSCI All Country World Index Photograph: MSCI

The rally comes amid hopes of better global trade ties, more monetary stimulus, a new US fiscal package (size yet to be determined), and little chance of major tax rises (if Republicans end up controlling the Senate after the Georgia run-offs).

Russ Mould, investment director at AJ Bell says that even though Donald Trump has not yet conceded, markets have taken Joe Biden’s election victory to be a done deal.

“Stocks had already started to move higher last week on the assumption there would be a divided government. This expectation extends into the new trading week following the latest voting figures which put Biden in first place.

“While the threat of legal action by Trump could delay proceedings, investors are pricing in almost zero chance for the incumbent to destabilise affairs. So that means the market is in risk-on mood with equities rising across Asia, Europe and pre-market indicative prices also suggest a good day for US stocks.

“The playbook is clear to see – investors are buying tech stocks again in the belief that there would gridlock in Congress and so Biden would find it hard to push through punitive tax measures that could have hit the tech sector. Tech is also one of the few places where there is expected to be sustained earnings growth at a time when economies are under pressure from the pandemic.

“Mining shares are also in demand in the belief that Biden would have a more predictable trade policy and that some tariffs on Europe and China could be rolled back, thus benefiting the commodities market.

Wall Street futures head higher

Wall Street is on track to open higher when the new trading week begins, in over five hours.

The Dow Jones industrial average futures contract has gained 1.26% today, with S&P 500 futures up 1.5% and Nasdaq futures up 2%.

That follows the New York stock market’s best week since April.

CNN points out that investors now have more certainty:

While the race for control of the Senate still hangs in the balance — there are likely Senate runoff elections in Georgia still to come — investors are also expecting Republicans to hold the chamber. Such an outcome would likely mean more modest policies on taxes and regulations.

But they also caution that the next few weeks could be volatile:

And despite Biden’s victory, investors still have concerns for how Trump will respond to the election loss in the weeks ahead.

“The one variable that cannot be accounted for is President Trump becoming even more erratic and destabilizing over the next ten weeks,” said Brad Karp, chairman of Paul, Weiss, Rifkind, Wharton & Garrison LLP.

“There is no telling what he might try to do and no ability to predict how the markets might react in response.”

More here: The results are in: The stock market likes Joe Biden

Today’s stock market rally comes despite fears of a difficult transition process, as Donald Trump refuses to concede the election.

The outgoing president continues to push baseless claims of electoral fraud, with CNN reporting overnight that some Trump allies are urging him to hold recount rallies.

Additionally, the Washington Post is reporting that Emily Murphy, a little-known Trump appointee who is in charge of the General Services Administration, is refusing to sign a letter allowing Biden’s transition team to formally begin its work this week.

As our US Politics Live Blog explains, that letter will officially turn over millions of dollars to the winning campaign, as well as giving access to government officials, office space and equipment for the transition team.

Derek Halpenny of MUFG Bank told investors this morning that America faces a ‘messy’ transition’, but that Joe Biden’s lead looks ‘unsurmountable’:

The confirmation of victory for Joe Biden in Pennsylvania on Saturday brought his electoral college vote total past the magic 270 level which prompted all the major media outlets in the US to confirm the election process over – and Joe Biden became President-elect.

But predictably President Trump refused to accept the result, which makes for a messy transition phase – something unheard of in US political history. For now though this prospect is not getting too much attention and confirmation of a Biden victory has propelled the dollar further weaker with Asian equity markets all higher.

We view the reaction to the result with little concern over transition as logical given what is looking like an insurmountable election victory. Biden’s margin of victory in Pennsylvania is over 43k while his leads in the two of the three outstanding states with 98% of voting complete in each one is 16,985 (AZ); and 10,353 (GA); leads that do not look under threat from legal challenges at this stage. Victories in these states would put Biden on 306 electoral college votes – the same as Trump in 2016.

European stock markets have also opened sharply higher, adding to last week’s gains.

The Europe-wide Stoxx 600 index has risen by 1.4%, to the highest level since 14 October, with gains in all the major markets:

European stock markets, November 09 2020
European stock markets this morning Photograph: Refinitiv

Richard Hunter, Head of Markets at interactive investor, says investors are welcoming the US election results:

“It is the first opportunity for markets to react to the Biden news from the weekend and the early signs are promising.

Asian markets had a brisk and positive session on hopes of a less fractious relationship between the US and China in the immediate future. Meanwhile, extremely early indications on the Dow futures pointed to an opening some 300 points, or just over 1%, higher as investor hopes for a Biden victory were confirmed.

Despite the likelihood of the election result being contested, the fact that Congress will be divided is now being priced in, which is seen as a tailwind for markets since sweeping changes are more difficult to introduce. In particular, the previous concerns of higher taxes and less regulatory interference have subsided, while an early boost to the economy from further fiscal stimulus is seen to be on the immediate agenda.

Every share on the Footsie is higher this morning, with mining companies, consumer cyclical firms, industrial stocks and banks leading the rally.

FTSE 100 by sector, November 09 2020
The FTSE 100 index by sector this morning Photograph: Refinitiv

Updated

FTSE 100 jumps back over 6000 points

Britain’s stock market has hit its highest level in nearly four weeks, at the start of trading in London.

The FTSE 100 index of blue-chip shares has surged by 94 points, or 1.6%, to 6004 points. That’s its highest level since 14 October, as investors react to Joe Biden and Kamala Harris’s victory.

The FTSE 100
The FTSE 100 this year Photograph: Refinitiv

Updated

The US dollar has also dipped to two month lows against the pound and the euro this morning.

Here’s the details:

  • Sterling: Up 0.2% at $1.319
  • Euro: Up 0.2% at $1.189
The pound/dollar exchange rate
The pound/dollar exchange rate Photograph: Refinitiv

The weaker dollar shows that investors are anticipating less disruption under a Biden presidency.

As CMC Markets’ chief strategist in Sydney, Michael McCarthy, put it:

The outcome is ideal from a market point of view,” said

“Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

Bank of Singapore FX analyst Moh Siong Sim says the US Federal Reserve is likely to ease monetary policy again:

The dollar has weakened in anticipation of a Biden presidency bringing calmer politics ... and anticipation of Fed coming to the rescue again amid near term risk of rising COVID infection.

Emerging market currencies are rallying today, on hopes that the next US administration will take a less combative approach to trade.

Reuters has the details:

China’s yuan rose as much as 0.7% to hit a 28-month peak, while Indonesia’s rupiah, whose high interest rates make it one of the region’s most popular bond markets for foreign investors, gained nearly 1%.

“A Biden administration is seen as likely to take a less directly confrontational approach towards China,” said Khoon Goh, head of Asia Research for ANZ.

“The positive risk sentiment in markets should start to see portfolio inflows flooding back into Asia, which is supportive for the region’s asset markets.”

Full story: Biden win boosts global markets as Japanese shares soar

Japan’s Nikkei stock index has led today’s rally, surging over 2% to a new 29-year high.

My colleague Martin Farrer explains:

Financial markets around the world have received a marked boost in the wake of Joe Biden’s victory in the US presidential election, with Japanese shares hitting their highest level for nearly three decades and oil prices also climbing.

Stock prices in Europe and New York were also expected to rise sharply on Monday after the president-elect pledged to try to bring unity to the US after four tumultuous years under the Trump administration.

The Nikkei index in Tokyo led the way with a rise of 2.3% as traders in Asia Pacific got the first chance to give their verdict on the Biden victory declared over the weekend.

In China, the Shanghai Composite was also up more than 2%, Hong Kong shares rose 1.5% and the ASX200 in Sydney jumped 1.74%.

Here’s the full story:

Introduction: Biden Bounce as investors hail US election

US President-elect Joe Biden delivering his victory address after being declared the winner in the 2020 presidential election in Wilmington, Delaware, USA, on Saturday night
US President-elect Joe Biden delivering his victory address after being declared the winner in the 2020 presidential election in Wilmington, Delaware, USA, on Saturday night Photograph: Jim Lo Scalzo/EPA

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Donald Trump often trumpeted stock market gains as proof that he was doing a good job. But today, the Biden Bounce is in full swing as investors welcome the result of the US presidential election.

European stock markets are heading for a strong open, up over 1%, amid hopes that US-EU relations will improve once Joe Biden enters the Oval Office in January.

The UK’s FTSE 100 on track to hit its highest level in over three weeks, following a rally in Asia-Pacific that has already swept Japan’s Nikkei to a 29-year peak.

Biden’s victory offers the markets some certainty (which is always pleasing), while his pledge to unify America suggests a return to calmer days.

His pledge to fight the Covid-19 pandemic raging in America is hugely welcome - a new coronavirus task force is being convened today.

The Democrat is also likely to take a less belligerent line on foreign policy, giving business leaders more confidence to invest abroad. Trade negotiations could be less volatile too, although relations with China could still be tense.

Crucially, investors are also optimistic that negotiations on a desperately needed stimulus package can resume - to help struggling US families through the pandemic.

Jim Reid of Deutsche Bank told clients this morning:

Since Election Day, Senate Majority Leader McConnell has sounded more open to a stimulus deal. This shift in tone increases the chances for a lame duck package and could hint at the potential for a somewhat larger stimulus deal than they originally thought without a “Blue Wave”.

So they keep their current baseline assumption of a roughly $750bn fiscal package legislated by Q1 even though they previously worried about this in a split government scenario.

The next president is indeed likely to face a split Congress -- unless the Democrats can win two Senate run-off elections in January to tie the upper house 50:50 (with a casting vote).

If the Republicans maintain their current majority, it will be harder for the White House to push through major tax and spending policy changes.

The prospect of gridlock is also pushing up equities, says Mark Haefele, chief investment officer at UBS Global Wealth Management.

Overall, we retain a pro-risk stance. We think the best course of action is to operate under the assumption that the US election is over and expect market focus to shift to medium-term drivers of economic growth.

These include COVID-19, vaccine developments, and monetary and fiscal stimulus.”

With Wall Street on track to rally, it could be a solid day for markets. We’ll be tracking all the action....

The agenda

  • 10.35am GMT: Bank of England governor Andrew Bailey speaks at the Corporation of London Green Horizon Summit
  • 2pm GMT: Bank of England chief economist Andy Haldane speaks on ‘The economic impact of coronavirus and long term implications for the UK’

Updated

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