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Research Market strategy
by Swissquote Analysts
Daily Market Brief

Nasdaq Extends Losses

1

Wall Street Still Mixed

By Strategy Desk

US equities continued their mixed path on Tuesday, as value stocks extended gains while tech shares declined. Investors dumped tech stocks that rallied amid virus lockdowns and focused on the sectors that have been damaged the most during the pandemic. The u-turn has to do with the successful late-stage trial of the COVID-19 vaccine produced by Pfizer and BioNTech. The European Union is about to buy up to 300 million doses, while the US and the UK might deploy the vaccine by the end of this year.
US Health Secretary Alex Azar said that if Pfizer submits its vaccine candidate to health regulators as soon as possible, the government would deploy vaccinations next month.
The Dow rose 0.90% and is inches away from updating the record high. Elsewhere, the S&P 500 fell 0.14%, and Nasdaq dropped by 1.37%. On Monday, about $2 trillion was traded globally in all markets on the vaccine news, according to Reuters. This was the busiest session since March, with $500 billion changing hands in the US stock market alone.
On Tuesday, tech giants like Amazon, Microsoft, and Facebook fell from 2.3% to 3.5% to extend their Monday’s losses.
Investors hope that the Pfizer vaccine will lead to a reopening of the economy in developed countries, which is why they preferred value stocks.
Still, trading was choppy given that the markets monitored the post-election situation, as President Donald Trump doesn’t want to admit his loss.
Meanwhile, if Pfizer manages to get quick approval for the FDA, the case for another massive stimulus bill might weaken, even though some support is still needed to revive the economy.
In individual corporate news, Apple launched its first MacBook Air notebook along with other devices that use its proprietary microprocessor. The iPhone maker relied on Intel chips during the last 15 years. The shares of both Intel and Apple declined.
In Asia, stocks are mostly bullish in early trading on Wednesday, as Pfizer’s vaccine continues to drive the markets.
At the time of writing, Chinese stocks are declining after opening higher. The Shanghai Composite is down 0.43%, and the Shenzhen Component has dropped by 1.50%. Investors will be watching Alibaba's Singles’ Day online shopping event to get hints about the economic recovery in China.
Hong Kong’s Hang Seng Index is up 0.19%, departing from session highs.
Japan’s Nikkei 225 is up 1.84% after surging over 5% at one point. South Korea’s KOSPI has gained 1.31%. In Australia, the ASX 200 closed 1.72% higher.
Despite the vaccine optimism, European stock futures are mixed and anticipate choppy trading.
Later today, investors will focus on speeches delivered by European Central Bank President Christine Lagarde, Fed Chairman Jerome Powell, and Bank of England Governor Andrew Bailey. They are scheduled to speak at the ECB forum titled “Central Banks in a Shifting World.”
In the commodity market, oil prices continue to recover after tumbling last week to the lowest level since May. Crude prices continue to benefit from the vaccine news. WTI and Brent are both up about 1.20%, trading at $41.87 and $44.11, respectively. The two brands touched the highest level in two months after gaining about 11% this week alone. Recently, the American Petroleum Institute reported a draw of 5.147 million barrels last week, while investors expected a draw of up to 1 million barrels.
Gold is recovering on Wednesday, after falling drastically yesterday. The metal is up 0.21% to $1,880. While the news from Pfizer is giving much hope, the number of COVID continues to surge these days, with some US states, including California, imposing new restrictions. Also, gold is benefiting from stimulus hopes.
The US dollar is losing ground amid a surging number in COVID infections in the US. Also, investors are not sure how the vaccine will get distributed at home and globally. The USD Index is down 0.3% to 92.713. EUR/USD is up 0.06% to 1.1822.
The New Zealand dollar surged to the highest level in a year after the country’s central bank defied expectations of negative rates and left the interest rate unchanged at 0.25%.

 
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