Covid-19 vaccine hopes drive stocks higher on ‘Black Monday’ anniversary

European shares rallied on Monday as rising hopes of a coronavirus vaccine by the top of the yr and a U.S. fiscal bundle earlier than elections offset concern over file each day infections within the area.

Wall Street futures rose 0.9% on the 33rd anniversary of the 1987 “Black Monday” crash, when the Dow Jones Industrial Average misplaced 22.6% in someday, equal to a drop of about 6,500 factors within the index immediately.

European blue-chip shares index rose 0.8% at the same time as new Covid-19 instances have been rising at over 150,000 a day in Europe. Parts of the UK have been put into lockdown and France imposed curfews.

Those worries and no breakthrough within the Brexit stalemate didn’t curb danger urge for food amongst buyers, after U.S. House Speaker Nancy Pelosi mentioned on Sunday she was optimistic a few coronavirus aid deal earlier than Election Day.

Boosting general sentiment, drugmaker Pfizer Inc mentioned on Friday it may have a coronavirus vaccine prepared within the United States by the top of this yr.

“A vaccine will be broadly available from the second quarter of next year, with markets moving to price in the economic benefits well ahead of that,” mentioned Mark Haefele, chief funding officer at UBS Global Wealth Management.

“The on-off fiscal talks have injected near-term volatility into risk assets, but instead of staying on sidelines, we suggest investors consider ways to build up long-term positions in these market conditions.”

Investors additionally took consolation from China’s financial restoration within the third quarter as shoppers shook off their coronavirus warning, though the weaker-than-expected headline development capped inventory market positive factors in Asia.

“The rebound in Q3 GDP was less strong than expected, but was still a decent 4.9% year on year. September data beat expectations, suggesting a pick-up in momentum towards the latter part of Q3,” mentioned Frances Cheung, head of macro technique for Asia at Westpac in Singapore.

“The pick-up in momentum was broad-based, which bodes well for the Q4 outlook.”

MSCI’s broadest index of Asia-Pacific shares outdoors Japan rose 0.5% for a second straight day of positive factors, paring again following third-quarter gross home product information from China.

Separate month-to-month indicators pointed to an growth in financial exercise. Industrial output accelerated 6.9% in September from a yr earlier, when analysts have been in search of a 5.8% achieve from a 5.6% rise in August.

Later within the week, key danger occasions, embrace minutes of Australia’s central financial institution assembly, the ultimate U.S. presidential debate and world manufacturing indicators.

Action in currencies was muted with the U.S. greenback flat at 93.696 in opposition to a basket of six main currencies.

The euro traded greater at $1.1725 and the sterling held above a 10-day low on Monday. Investors minimize their holdings as British and European negotiators tried to salvage post-Brexit commerce talks.

“EU-UK trade talks are flirting with collapse,” ANZ economists mentioned.

“UK Prime Minister Johnson said the UK needs to prepare for a no-deal outcome, as both sides cannot agree on a Canada-style FTA. Talks resume in London on Monday, but without the political willingness to shift ground, there is little the negotiators can achieve.”

In commodities, Brent crude futures have been flat at $42.92 a barrel and U.S. West Texas Intermediate crude futures traded at $40.91 a barrel.

Spot gold rose 0.6% to $1,909.6 an oz.