Wednesday’s market minute
- Global stocks rise as coronavirus vaccine progresses, but mounting tensions between the United States and China keep gains under control.
- Moderna says the mRNA-1273 vaccine test triggers the antibody reaction in all 45 participants, opening the door for a larger study.
- President Donald Trump ends Hong Kong’s special status, prompting the threat of retaliation from China.
- Earnings from US banks are available on Wednesday after stronger-than-expected reports from JPMorgan and Citigroup on Tuesday.
- Oil prices rebound after a larger than expected decline of 8.3 million barrels in domestic crude stocks, according to API data, and a weaker US dollar.
- US stock futures suggest a firmer opening on Wall Street ahead of second-quarter earnings for UnitedHealth, Goldman Sachs and US Bancorp.
US equity futures extended gains on Wednesday, as the dollar fell to a one-month low against its global currency pairs as investors reacted to progress on an experimental coronavirus vaccine as They watched closely the sudden political tensions between Washington and Beijing.
Modern Inc. (MRNA) – Get report He said Tuesday night that his coronavirus vaccine candidate mRNA-1273 triggered antibody reactions, with some mild side effects, in the 45 patients involved in an early peer-reviewed study.
Another 30,000 volunteers will participate in a larger test of the candidate later this summer, but Moderna’s progress, which was hailed by NIAID Director Dr. Anthony Fauci, added to market optimism linked to the virus behind the data. from a Pfizer (PFE) – Get report study earlier this week and developments at Gilead Sciences’ (BROWN) – Get report treatment with remdesivir.
The good news, however, was partly shrouded by the fact that coronavirus cases in the US have exceeded 3.4 million, with around 137,000 deaths, and the numbers continue to rise in states like Florida, Texas and California.
Investors were also concerned about President Donald Trump’s decision last night to end Hong Kong’s so-called special status, a move that affects some 1,300 US companies doing business in the protectorate and sparked a strong reaction from Beijing, which again accused Washington of meddling in its affairs.
Trump also criticized China’s handling of the coronavirus outbreak, which originated in the central industrial city of Wuhan, in comments that some have interpreted as jeopardizing the phase 1 trade deal between the two economies.
“Make no mistake. We hold China fully responsible for hiding the virus and releasing it in the world. They could have stopped it, they should have stopped it,” Trump told reporters at the White House on Tuesday. “It would have been very easy to do it at the source when it happened.”
However, stocks appear ready to kick off another busy earnings session on a positive note, following stronger-than-expected second-quarter reports from JPMorgan. (JPM) – Get report and Citigroup (C) – Get report yesterday, with contracts linked to the Dow Jones Industrial Average indicating an opening bell gain of 395 points and those linked to the S&P 500, which briefly turned into positive territory during the year earlier this week, suggesting progress. 35 points.
Apple Inc. (AAPL) – Get report Stocks were another notable driver of the early market, rising 2.12%, and adding 60 points to the Dow, after Europe’s second-highest court ruled in favor of the tech giant in a battle of more than $ 15 billion. in unpaid taxes.
The US Dollar Index, which tracks the greenback against a basket of six global currency pairs, fell 0.4% in overnight trade to a one-month low of 95,867, thanks in part to optimism for a vaccine against short-term corronavirus and more signs of A positive outcome in a European rescue package at an EU summit in Brussels later this week, which raised the euro to a multi-week high of 1.1440.
European stocks also followed the currency higher, with the Stoxx 600 benchmark rising 1.75% in early operations in Frankfurt, while Britain’s FTSE 100 added 1.7% in London, followed by GlaxoSmithKline , an indexed heavyweight drug maker. (GSK) – Get report and AstraZeneca (AZN) – Get report
Oil prices also moved on Wednesday after data from the American Petroleum Institute showed an 8.3 million barrel decline in domestic crude stocks, a much larger-than-expected drop suggesting an improvement in demand in the second largest energy market in the world.
WTI contracts for August delivery, the US benchmark, have traded 60 cents higher since their Tuesday close in New York and changed hands at $ 40.89 a barrel in early European operations, while contracts Brent stocks for August, the global benchmark, were 56 cents lower at $ 43.46 a barrel
Overnight in Asia, China’s shares lost about 1.6% in Shanghai amid mounting Sino-US tensions, which included President Trump taking personal credit for Britain’s decision to ban Huawei Technologies from its projects. infrastructure, but those declines were offset by gains across the region, which helped lift the ex-Japan benchmark MSCI index 0.75% higher in the last hours of trading.
Meanwhile, Japan’s Nikkei 225 rose 1.6% in a follow-up Wall Street rally to end the session at just under 23,000 points.
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