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  • Global risk assets rally on the vaccine news, sending the oil and bank shares higher, stay-at-homes lower.
  • World stocks have been enjoying a series of risk-on events at the start of the week.

The global markets have been scaling to record highs earlier in the day due to the expectations of better global trade ties and more monetary stimulus under President-elect Biden.

However, the latest headline in the news of a vaccine breakthrough has sent Wall Street’s main indexes hit record highs.

The first successful data from a late-stage COVID-19 vaccine trial has spurred hopes of the economy recovering quickly from a year of pandemic-driven crisis.

We have seen risk assets everywhere rally on the sentiment, including oil prices which have surged more than 8%.

The S&P 500 index charged to a high of 3,645.99 from a low of 3,583.04 to tally up over 3% on the day so far after drugmaker Pfizer PFE and its German partner BioNTech BNTX said data from the large-scale trial of their vaccine showed it was more than 90% effective in preventing COVID-19.

“This (news) is extremely important and should give the market confidence that Pfizer’s candidate offers a breakthrough in terms of reaching herd immunity at some point next year,” said Robin Winkler, strategist at Deutsche Bank Research.

We have seen individual sectors hit hardest by the virus and lockdowns jump back to life.

Boeing Co BA jumped 14%, while airlines XAL and cruise line operators NCLH CCL were trading between 18% and 35% higher.

”Pfizer and BioNTech said they had found no serious safety concerns so far and expected to seek US emergency use authorization later this month,” Reuters reported. 

Consequently, we have seen the proxy trades such as the S&P energy index SPN on course for its best day since April and bank shares, SPXBK rallying some 13%.

In contrast, the tech sector has suffered with the “stay-at-home” pandemic plays losing out with Netflix Inc NFLX falling 5.8% and Inc AMZN down 2.8%.

S&P 500 levels