The S&P 500 fell 0.06%, erasing earlier gains after Pfizer slashed the target for the rollout of its COVID-19 vaccine due to supply chain obstacles
The S&P 500 fell 0.06% on Thursday, erasing earlier gains after the Wall Street Journal reported that Pfizer had slashed the target for the rollout of its COVID-19 vaccine due to supply chain obstacles.
Yet, the damage did not last long, with S&P500 futures gaining 0.3% in early Friday trade.
A bipartisan, $908 billion coronavirus aid plan gained momentum in the U.S. Congress on Thursday as conservative lawmakers expressed their support and Senate and House of Representatives leaders huddled.
A deal before the year-end looked almost impossible a while back but now a package of around $1 trillion seems within reach, said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
On top of fiscal support, investors expect the U.S. Federal Reserve to tweak its guidance of its asset purchase scheme later this month while the European Central Bank looks certain to increase its bond buying next week.
Progress in developing COVID-19 vaccines also led investors to bet a recovery in corporate earnings will accelerate next year, overriding any concerns about the current dire conditions of the pandemic.
The United States topped 14 million known COVID-19 infections with over 100,000 patients hospitalized for the first time. California imposed stay-at-home orders to take effect when intensive care units approach capacity in the coming days.
Stock markets are behaving as if the world has already overcome the disease. In reality it will take time before vaccines will reach every corner of the world and infections start to decline, said Mitsubishi UFJ’s Fujito.
Given the rapid pace of gains in stock prices over the past month, there will be some profit-taking. Nevertheless, I don’t think the market is peaking just yet, Fujito said.
The upbeat mood saw the U.S. dollar lose ground to other major currencies as well as riskier, less liquid ones.
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