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ZFX: Optimism over vaccine drove the record setting Wall Street
09-12-2020 05:14
On Wednesday, Asian stock markets traded mostly higher, with Nikkei and HSI up over 1%, following the bullish momentum overnight. The rollout of coronavirus vaccine in the UK boosted optimism among investors, despite the uncertainty of Brexit.
On Tuesday, on the other hand, the effectiveness of the vaccine from Pfizer and BioNTech was confirmed by the U.S. Food and Drug Administration (FDA), further sparking risk appetite in the financial markets. The three major indexes of Wall Street have turned bullish in the early trading session. The S&P and Nasdaq have made the new record high, of which the S&P closed above 3700 level.
However, investors are still concerning the new stimulus package in the US. The latest news showed that the Democrats and the Republicans may not be able to reach an agreement in the very short term. While both parties are not willing to compromise much more, it may hurt the investor sentiment these days, especially Friday would be a possible deadline to avoid shutdown of the US government.
Last week, the disappointing figures of Nonfarm Payrolls has added pressure on the Washington administration. NFP data last Friday showed only 245000 jobs increased in the labour market, the fewest in this economy recovery progress. Investors have already expected that the US Congress will pass the bill as soon as possible to support this “losing momentum”. It would be quite struggling for the market if those lawmakers are not able to agree on anything this week.
For the UK-EU talks over Brexit, Boris Johnson will meet EU commission chief Ursula Von Der Leyen in Belgium today for the “last-minute push”. The UK side announced that some articles of the Internal Market Bill which are contradictive to the Brexit Agreement will be dropped, in order to enhance the chance of reaching the deal.
However, it is not really positive as the UK officials said this is just “agreement in principle”. The trade deal is not yet reached. Boris Johnson also warned that the Hard Brexit is still possible and he will just quit any further negotiation if no deal. Watching the GBP/USD trend, it is clearly that traders are still very cautious over the two “talks” above.
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