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Investors Hub World Daily Markets Bulletin Wednesday 8 December 2021

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Pfizer/BioNTech Vaccine Comments May Generate Continued Buying Interest

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US Market

The major U.S. index futures are currently pointing to a moderately higher open on Wednesday, with stocks poised to add to the strong gains posted in the two previous sessions.

The markets may continue to benefit from easing concerns about the Omicron variant of the coronavirus following comments from Pfizer (PFE) and BioNTech (BNTX) regarding the effectiveness of their vaccine.

Pfizer and BioNTech said preliminary laboratory studies have demonstrated that three doses of their vaccine neutralize the Omicron variant.

“Although two doses of the vaccine may still offer protection against severe disease caused by the Omicron strain, it’s clear from these preliminary data that protection is improved with a third dose of our vaccine,” said Pfizer Chairman and Chief Executive Officer Albert Bourla.

He added, “Ensuring as many people as possible are fully vaccinated with the first two dose series and a booster remains the best course of action to prevent the spread of COVID-19.”

The claims from Pfizer and BioNTech come after initial indications the Omicron variant could be vaccine-resistant contributed to a post-Thanksgiving sell-off on Wall Street.

However, stocks have already largely offset that steep drop, potentially leading to some uncertainty about the near-term outlook for the markets ahead of next week’s Federal Reserve meeting.

Following the rally seen to start the week, stocks showed another strong move to the upside during trading on Tuesday. The major averages all moved sharply higher, with the tech-heavy Nasdaq posting a particularly strong gain.

The Nasdaq soared 461.76 points or 3 percent to 15,686.92, continuing to recover after ending last Friday’s trading at its lowest closing level in well over a month. The Dow also jumped 492.40 points or 1.4 percent to 35,719.43, while the S&P 500 surged up 95.08 points or 2.1 percent to 4,686.75.

Easing concerns about the impact of the Omicron variant of the coronavirus contributed to the continued strength on Wall Street.

Indications the variant causes milder symptoms has helped offset worries the new strain could derail the global economic recovery.

Uncertainty about Omicron led to substantial volatility in the markets last week, with the major averages hitting their lowest levels in well over a month.

With the major averages still well off their recent highs, traders continued to use the recent weakness as an opportunity to pick up stocks at somewhat reduced levels.

Intel (INTC) helped lead the rally on Wall Street, as the semiconductor giant is jumped by 3.1 percent to its best closing level in well over a month.

The spike by Intel comes after the company announced its intention to take its self-driving car unit Mobileye public in the United States in mid-2022 via an initial public offering.

In U.S. economic news, the Commerce Department released a report showing the U.S. trade deficit narrowed significantly in the month of October amid a spike in the value of exports.

The report said the trade deficit decreased to $67.1 billion in October from a revised $81.4 billion in September. Economists had expected the deficit to narrow to $67.5 billion from the $80.9 billion originally reported for the previous month.

The narrower trade deficit came as the value of exports soared by 8.1 percent to $223.6 billion, while the value of imports climbed by 0.9 percent to $290.7 billion.

With Intel helping lead the way higher, semiconductor stocks showed a substantial move to the upside on the day.

Reflecting the strength in the sector, the Philadelphia Semiconductor Index skyrocketed by 5 percent to a new record closing high.

Networking stocks also saw significant strength on the day, driving the NYSE Arca Networking Index up by 3.6 percent.

Considerable strength was also visible among oil service stocks, as reflected by the 3.3 percent spike by the Philadelphia Oil Service Index. The rally by oil service stocks came amid another sharp increase by the price of crude oil.

Software, biotechnology, computer hardware and steel stocks also saw notable strength on the day, moving higher along with most of the other major sectors.

 

U.S. Economic Reports

The Labor Department is due to release the results of its Job Openings and Labor Turnover Survey for October at 10 am ET. Job openings are expected to hold steady 10.4 million.

At 10:30 am ET, the Energy Information Administration is scheduled to release its report on oil inventories in the week ended December 3rd.

The Treasury Department is due to announce the results of this month’s auction of $36 billion worth of ten-year notes at 1 pm ET.

 

Stocks in Focus

Shares of Thor Industries (THO) are moving sharply higher in pre-market trading after the recreational vehicle maker reported fiscal first quarter results that exceeded analyst estimates on both the top and bottom lines.

Cloud computing company PagerDuty (PD) is also likely to see initial strength after reporting a narrower than expected fiscal third quarter loss on revenues that beat expectations.

Shares of Dave & Buster’s (PLAY) are also likely to move to the upside after the restaurant chain reported better than expected fiscal third quarter results.

On the other hand, shares of Stitch Fix (SFIX) are seeing substantial pre-market weakness after the online apparel retailer reported fiscal first quarter results that beat estimates but provided disappointing guidance.

 

Europe

European stocks are turning in a mixed performance on Wednesday after two days of strong gains amid easing concerns about Omicron Covid-19 variant.

Investors are weighing the effectiveness of existing vaccines, with South African scientists warning the variant significantly reduced the antibody protection generated by the Pfizer and BioNTech vaccine.

Geopolitical tensions also remained on investors’ radar amid rising tensions between the United States and Russia regarding Ukraine.

While the U.K.’s FTSE 100 Index is up by 0.3 percent, the French CAC 40 Index is down by 0.2 percent and the German DAX Index is down by 0.4 percent.

Chipmakers Infineon Technologies and STMicroelectronics have moved to the downside after Morgan Stanley downgraded its ratings on the stocks.

TUI AG has also come under pressure after the travel operator posted an annual loss of over 2 billion euros ($2.26 billion).

Meal-kit company Hellofresh has also moved sharply lower after saying it expects 2022 earnings below expectations.

Meanwhile, L’Oreal has risen in Paris. Swiss firm Nestle said it would cut its stake in the French cosmetics brand by selling shares worth 8.9 billion euros ($10 billion) to about 20 percent.

Stagecoach has also advanced after the British transport group reported an increase in its operating profit from £16.1 million to £32.9 million year-on-year.

Berkeley Group Holdings, which operates mainly in London, Birmingham and the South of England, has also surged after raising its profit outlook.

Investment manager Man Group has also soared after announcing it intends to buy back shares worth up to $250 million.

 

Asia

Asian stocks ended mostly higher on Wednesday following big gains on Wall Street overnight amid easing fears surrounding the Omicron coronavirus variant.

Chinese stocks settled higher as Beijing’s recent easing signals helped investors shrug off property woes, with Kaisa and Evergrande becoming the most visible faces of the debt crunch.

The benchmark Shanghai Composite Index jumped 42.48 points, or 1.2 percent, to 3,637.57, while Hong Kong’s Hang Seng Index finished marginally higher at 23,996.87 after a volatile session.

Trading in shares of embattled Chinese developer Kaisa Group Holdings was suspended, prompting fresh concerns about potential defaults.

Japanese shares ended sharply higher as gains in technology shares following an overnight climb of their U.S. counterparts helped offset data showing that Japan’s economy shrank slightly faster than initially reported in the third quarter amid a summer surge in Covid-19 cases that triggered emergency restrictions.

The Nikkei 225 Index surged 405.02 points, or 1.4 percent, to finish at 28,860.62, while the broader Topix closed 0.6 percent higher at 2,002.24. Advantest, Tokyo Electron and Fanuc shot up 2-4 percent. Fast Retailing, the operator of the Uniqlo clothing chain, added 1.3 percent.

Australian markets notched their best session in more than 2 months as virus fear eased. The benchmark S&P/ASX 200 Index climbed 91.50 points, or 1.3 percent, to 7,405.40, marking the best session since October 4. The broader All Ordinaries Index ended up 102 points, or 1.3 percent, at 7,707.20.

Mining heavyweights BHP and Rio Tinto rose about 2 percent each and smaller rival Fortescue Metals Group added 3.3 percent, as iron ore prices jumped amid easing monetary policy in leading consumer China.

Firmer oil prices lifted energy stocks, with Oil Search, Santos and Woodside Petroleum all rising over 2 percent. Tech shares followed their U.S. peers higher, with Zip Co. climbing nearly 11 percent to hit a two-week high.

Seoul stocks extended gains for the sixth straight session, though markets ended well off their day’s highs after a record jump in domestic Covid-10 cases. The Kospi ended the session up 10.08 points, or 0.3 percent, at 3,001.80, marking the highest close since November 22.

Chip giant Samsung Electronics ended on a flat note after having hit a four-month high earlier in the session. LG Chem soared 5.6 percent and Samsung Biologics rallied 4.2 percent.

 

Commodities

Crude oil futures are inching up $0.23 to $72.28 a barrel after surging $2.56 to $72.05 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,782.80, down $1.90 compared to the previous session’s close of $1,784.70. On Tuesday, gold rose $5.20.

On the currency front, the U.S. dollar is trading at 113.83 yen compared to the 113.60 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1299 compared to yesterday’s $1.1267.

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