The global stocks rally is petering out.
Many major indexes still inched up Tuesday as investors weighed promising news about Pfizer’s Covid-19 vaccine candidate and the effect it could have on the global recovery. But their gains failed to match Monday’s euphoric moves.
In Asia, the Hang Seng Index (HSI) rose 1.1%, making it by far the region’s best performer. The Nikkei (N225) added 0.3%, while South Korea’s Kospi (KOSPI) gained 0.2%. By contrast, China’s Shanghai Composite (SHCOMP) lost 0.4%.
European stocks were mixed. The FTSE 100 increased 0.4% in London while France’s CAC 40 was flat. Germany’s DAX dipped 0.5%.
US stock futures edged slightly higher. Dow (INDU) futures points were up 63 points, or 0.2%. S&P 500 (SPX) futures inched up 0.1% and Nasdaq (COMP) futures edged 0.2% higher.
Stocks rose Monday after Pfizer announced that early data from its Covid-19 vaccine, made with German partner BioNTech, showed that it is 90% effective. Investors also reacted positively to greater political certainty following Joe Biden’s victory in the US presidential election.
The Dow and S&P 500 both closed higher, though the Nasdaq lagged.
While investors were optimistic about the prospect of a vaccine breakthrough, there’s still a lot that has to happen before the pandemic ends. Any effective vaccine would still be months away from mass deployment, noted Tai Hui, chief Asia market strategist for JP Morgan Asset Management.
“Vaccines and vaccination are two very different things,” wrote Melinda Mills, the director of the Leverhulme Centre for Demographic Science at the University of Oxford and lead author of a report published Tuesday by the Royal Society, Britain’s national academy of sciences. “To achieve the estimated 80% of uptake of the vaccine required for community protection, we need a serious, well-funded and community-based public engagement strategy.”
Tech stocks were among the biggest losers in Asia. Hui pointed out that investors might be pricing in expectations that demand for some tech products and services will slow as employees gradually return to the office.
Several major global economies are also still in the throes of the pandemic.
The United States has surpassed more than 10 million cases since the start of the pandemic, and has topped 100,000 new infections seven days in a row. One expert said that the country could soon hit 200,000 daily Covid-19 cases.
“We are watching cases increase substantially in this country far beyond, I think, what most people ever thought could happen,” said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota. Osterholm has been named a member of Biden’s Covid-19 advisory board.
Europe is also struggling. The United Kingdom, France and Germany are under lockdown to stem a rise in cases, and their economies are at risk of falling back into recession.