FTSE 100 hits five-month high after Moderna vaccine boost – as it happened

Graeme Wearden

from on 2020-11-16 18:31 (#5AE4S)

Rolling coverage of the latest economic and financial news

Latest: FTSE 100 closes at highest since early June
European markets close at eight-month peak
On Wall Street, Dow nudged fresh record highs on vaccine hopes
Moderna: Covid-19 vaccine almost 95% effective in trials

Earlier:

6.31pm GMT

And finally... here's our economics editor Larry Elliott on today's market moves:

Shares in London closed at their highest level since June as stock markets around the world rose sharply after news of successful trials of a second Covid-19 vaccine.

For the second Monday in a row, equity prices soared on all the world's leading bourses after Moderna said its treatment for the pandemic was almost 95% effective.

6.28pm GMT

The World Economic Forum have published more of Christine Lagarde's comments about the pandemic, and its impact on young people, at their Pioneers of Change summit today.

We were standing on one side of a massive river of uncertainty and hardship... thanks to the tremendous hard work of companies in the US, Germany and other corners of the world we're now seeing the other side of the river," Lagarde said in the opening plenary of the Pioneers summit.

However, crossing the choppy water would be a struggle necessitating both private sector innovation and a policy bridge" to help countries recover from the worst economic shock in generations.

5.41pm GMT

One more thing to flag up....Britain has now secured a deal for an initial five million doses of Moderna's new vaccine, my colleagues Jessica Elgot and Ian Sample report:

The deal done on Monday will mean vaccines could be delivered to the UK from spring 2021 if approved by the medicines regulator and increases the total number of doses secured by the UK to 355m.

At a Downing Street press conference, the health secretary, Matt Hancock, said the preliminary results were excellent news", adding: Although I stress that this is preliminary, the safety data is limited and their production facilities are not yet at scale." Hancock said the government had secured an initial agreement" for 5m doses.

The Moderna vaccine was always one of the front runners, why wasn't it part of the UK stockpile from the very start?

Health Secretary @MattHancock tells @SkyNewsThomas that the govt's approach is to have a good spread of the vaccines".

Live updates https://t.co/iH41iqcois pic.twitter.com/jE2xyuiAUQ

5.21pm GMT

5.19pm GMT

European stock markets all closed higher tonight, led by Spain -- where stocks have been particularly badly hit by the pandemic.

This lifted the Europe-wide Stoxx 600 index to its highest closing level since late February - the first week of the market crash.

Similar to last Monday, the news that great progress been made in relation to a possible Covid-19 vaccine has boosted stocks. This time around, the update has come from Moderna Inc. The pharma company announced that a possible coronavirus drug has been 94.5% effective. Every sector has been impacted by the pandemic but some have been hit harder than others. Airlines, transport, real estate investment trusts (REIT) and hospitality stocks were severely impacted because they are arguably the most exposed to the health crisis.

Like with the moves seen one week ago, those sectors have benefitted the most today, as they have the most to gain from the health emergency being resolved.

4.52pm GMT

Britain's FTSE 100 index of blue-chip shares has just hit its highest closing level in over five months.

The FTSE 100 ended the day 104.9 points higher at 6421 points, a gain of 1.66% today, lifted by optimism over Moderna's Covid-19 vaccine.

Another day, another vaccine with promising results. Like buses, good news on the Covid front appears to be coming all at once, or at least with respect to vaccines. The virus itself continues to wreak havoc, but the market is continuing to look past all this towards a time when nations are engaged in widespread vaccination programmes. While the bounce today on the Moderna news isn't anything like what we saw last week, there is still plenty of positivity, and with equity inflows picking up as well it looks like the bullish November momentum in equity markets still has plenty of room to run.

Again, like last week, value has outperformed growth, with the Nasdaq's paltry gains easily outdone, and for those lucky enough to have picked the (apparent) low in many reopening' stocks it seems more gains are on the way. Once again the Dow has shied away from smashing through 30,000, touching and then retreating from this level for the second Monday in a row, but it seems a matter of when, not if, the index will finally breach this latest impressive round number.

4.39pm GMT

Back in New York, the Dow Jones industrial average has just touched a new all-time high.

The Dow has hit 29,942 points, just above last Monday's intraday high, and putting the index on track for its first record closing high since February.

* DOW HITS RECORD HIGH@Reuters

Dow on verge of 30,000 and first record close in 10 months on back of Apple's stock surge https://t.co/a1jWUiUSzo

US stocks raced higher on Moderna's upbeat vaccine news, which along with Pfizer's vaccine raise expectations for a return to pre-pandemic life before next winter. The rotation into value stocks continues as the best-case vaccine scenarios unfold. Last week, Pfizer gave hope that vaccine progress was getting us closer to a post-COVID economy. Today, Moderna's vaccine news cemented optimism that highly effective vaccines should be readily available next year.

The Russell 2000 index hit a fresh intraday record high, the Dow is poised to surge above 30,000 and the Nasdaq is still seeing some love.

4.12pm GMT

A gauge of global stocks has hit a record high today as the latest batch of positive data for a possible COVID-19 vaccine boosted sentiment, along with signs of economic recovery in Asia, while oil prices jumped, Reuters reports:

The MSCI World Index of global shares, building on strong overnight gains in Asia's leading markets and a stronger open for most European bourses, managed to extend gains after the Moderna announcement to hit a record.

4.03pm GMT

The head of the European Central Bank, Christine Lagarde, has warned that young people could see their dreams crushed, unless business and policymakers protect them from the economic damage of the pandemic:

We're now seeing the other side of the river' - but we need businesses and policy to avoid crushing the dreams' of young people - @Lagarde #PioneersOfChange

3.44pm GMT

With around 45 minutes until trading ends in Europe, the London stock market is still on track for its highest closing level since early June.

The FTSE 100 is currently holding its gains, up 118 points or 1.9% at 6434 points, with travel firms, hospitality companies and oil giant still in the top risers.

As several companies make progress on a COVID vaccine, the execution risk drops as the roll-out doesn't now depend on a single firm.

The lowered execution risk should broaden the recovery - rather than just manufacturing and technology, we expect the recovery to also include consumption, which in many countries makes up more than 50% of GDP. This will help stock markets and support cyclicals.

3.35pm GMT

Billionaire investor David Rubenstein has warned that distributing Covid-19 vaccines will be a massive challenge for the next US administration.

Rubenstein, cofounder of the Carlyle Group, told CNBC that investors are anticipating that effective vaccines will be rolled out, allowing the economy to recover.

The market really wants to have this vaccine distributed, because until the vaccine is distributed, and it's vaccinated a large part of the population, we are not going to be able to get back to the economy we want.

That's what the new administration is going to have to worry about, getting the distribution method done, and it's going to be like a D-Day event.

It's an enormous logistical problem, and it can be done, but it's going to be a lot of work.

"It's going to be like a D-Day event." @OneCarlyle's David Rubenstein says a COVID-19 vaccine must be distributed or it will be useless. "It's an enormous logistical problem." https://t.co/o9u9mPipXi pic.twitter.com/RNsS8oHDqj

3.08pm GMT

Michael Breen, director of infectious diseases and ophthalmology at analytics firm GlobalData, says Moderna and Pfizer's vaccines have both performed much better than expected:

Moderna's vaccine's efficacy data exceeded expectations and could not have come at a better time. Like Pfizer, the length of time from concept, to clinic, to data readouts for Moderna's vaccine - less than one year from the discovery of this novel coronavirus - is nothing short of remarkable.

Furthermore, the results from both developers underscore the potential that mRNA technology has not only for addressing any infectious disease, but also as a rapid-response platform for dealing with emerging diseases.

2.57pm GMT

Energy companies, banks, and travel companies are among the risers in New York.

Oil producer Chevron is leading the Dow risers, up 4%, with aircraft maker Boeing gaining 3.2%. JP Morgan is up 2.9%, and retailer Walgreen Boots Alliance has picked up 3%.

2.42pm GMT

The US stock market has opened sharply higher, as investors welcome the news that Moderna's Covid-19 vaccine was 94.5% effective in medical trials.

U.S. stocks open higher https://t.co/kP8XWFoLjc pic.twitter.com/wU6jwXjB1p

2.22pm GMT

The list of top risers and fallers on London's FTSE 100 shows that investors are anticipating that Covid-19 vaccines will help the global economy recover from this year's slump.

Oil companies, hotel chains and airlines are still leading the rally; British Airway's parent company IAG is still up over 11%, and BP and Royal Dutch Shell have now gained over 6%, following the oil price move.

While this is clearly very good news, the vaccine has not yet been submitted for approval, meaning it will be weeks - or even months - before it is ready to be distributed. On top of that, there is no way of telling whether or not Moderna will be able to keep up with what will no doubt be extraordinarily high demand for its vaccine.

Until it is available for widespread use, then I expect markets to remain volatile and to reflect the general nervousness currently felt by investors.

1.51pm GMT

Shares in Moderna have jumped over 12% in pre-market trading, ahead of the start of trading in New York.

Moderna shares soared in premarket trade Monday after the biotech said its COVID-19 vaccine candidate met its primary endpoint in a Phase 3 trial, demonstrating 94.5% efficacy. $MRNA https://t.co/0s88zVuy6H pic.twitter.com/pBEfwtdpoB

Three of the firms - AstraZeneca, Johnson & Johnson and Moderna - are getting federal funds for their vaccine development efforts. AstraZeneca and Johnson & Johnson pledged to the lawmakers that they would produce hundreds of millions of doses of their vaccines at no profit to themselves. Moderna, however, which has been granted $483 million from the government to develop its product, made no such promise.

We will not sell it at cost," said Dr. Stephen Hoge, the president of Moderna.

1.37pm GMT

Ayush Ansal, chief investment officer at the hedge fund, Crimson Black Capital, predicts stocks will keep rising in the coming days, as vaccine optimism cheers the markets.

The FTSE 100 was up immediately when news of the early results from the Moderna tests came in and the feel-good factor created by Pfizer's vaccine should further rally markets in the days ahead.

More than anything markets need certainty, and the knowledge that the pandemic could be brought under control a lot sooner than most imagined could see stocks surge as sentiment rebounds.

1.29pm GMT

The oil price has jumped too, following the news that Moderna's Covid-19 vaccine has been over 94% effective in trials.

1.20pm GMT

The FTSE 100 index of blue-chip shares is now 2% higher at 6444 points, its highest since early June, as investors digest Moderna's vaccine trial news.

Today's gains means the FTSE 100 has now gained over 15% since the start of November, in a remarkable rally. It began with relief that Joe Biden had won the US election, followed by the surge after Pfizer's vaccine trial news last Monday, and now Moderna's impressive results today.

1.06pm GMT

Shares in holiday firm TUI have jumped 8.5%, while cruise operator Carnival are up 10%, on hopes that vaccine rollouts will allow people to travel more normally again.

SSP, the catering company behind Upper Crust and Caffe Ritazza branches at airports and railway stations, has gained 11%.

12.55pm GMT

Seema Shah, chief strategist at Principal Global Investors, says Moderna's vaccine trial results will boost hopes of an economic recovery from the pandemic next year, despite the alarming increase in Covid-19 cases in recent weeks.

The global population couldn't have asked for more from the Moderna vaccine. With an almost 95% efficacy and more acceptable logistical and storage dynamics, today's news should solidify the market rally that has been in play since last week. Visibility towards a return to normality is increasing, and this should provide more fuel to the reflation rally, with small caps, value and cyclicals clear beneficiaries.

Of course, there is still a tough winter to get through, and mobility numbers suggest that lockdowns in Europe are clearly taking their toll on economic activity. In the US, rising cases and even deaths suggests that mobility may soon also start to wane. Yet, today's vaccine news should make investors more tolerant of the surging virus cases, permitting them to look through to the strong dynamics that seem to be taking shape for 2021. Easy monetary policy, fiscal stimulus, recovering economic growth - there are many reasons for investors to be optimistic as we move closer to the end of this awful year."

This was in response to news from Moderna announcing longer shelf life for its COVID-19 vaccine candidate at refrigerated temperatures. This is very important, perhaps a game changer, as the Pfizer vaccine had to be kept in very cold temperatures of minus 70 degrees Celsius, making it logistically difficult to produce and transport large doses of the vaccine.

Moderna said that the phase 3 study shows vaccine efficacy of 94.5% - similar, or perhaps even higher than Pfizer's results. As a result, Moderna plans to seek emergency use authorization for its covid-19 vaccine in coming weeks from US authorities.

The news on Moderna's vaccine seems positive, both in terms of the 94.5% efficacy rate but also the news that the vaccine has a longer shelf life at refrigerated temperatures.

If confirmed that could make it easier to distribute, as some of the other vaccine candidates need to be stored at much lower temperatures.

12.43pm GMT

This is the second Monday in a row in which vaccine trial results have sent markets soaring.

Last week, Pfizer and BioNTech triggered the biggest surge on the London stock market since March, when they reported a 90% success rate in trials.

If the results remain as impressive as the trial goes on, the Moderna vaccine could potentially provide a major advantage over the Pfizer vaccine. While Pfizer's vaccine requires ultracold freezing between -70C and -80C from production facility to patient, Moderna said it had improved the shelf life and stability of its own vaccine, meaning that it can be stored at standard refrigeration temperatures of 2C to 8C for 30 days. It can be stored for six months at -20C for shipping and long-term storage, the company said.

But at 38 to 45 for a course of two shots, Moderna's vaccine is more expensive than the other frontrunners. AstraZeneca and Oxford University are aiming to sell their vaccine at about 3 a dose, while vaccines in trial with Johnson and Johnson and a collaboration between Sanofi and GSK are both expected to cost about 8 per dose. Pfizer is charging the US about 30 for a two-shot course. The UK has ordered 40m Pfizer shots but none of the Moderna vaccine.

12.23pm GMT

European stock markets are all rallying strongly now, with France's CAC index surging 2.3%, and Germany's DAX up 1.3%.

12.14pm GMT

Shares in travel companies and hospitality firms are surging in London, on the back of Moderna's highly encouraging vaccine trial results.

IAG, which owns British Airways, are up 14%, with jet engine maker Rolls-Royce jumping 10%.

12.06pm GMT

NEWSFLASH: US biotech firm Moderna has reported that its Covid-19 vaccine candidate has been 94.5% effective in phase 3 trials.

The news is driving stock markets higher across Europe, on renewed optimism that Covid-19 vaccines will be rolled out successfully soon, helping the world economy recover from the pandemic.

The race for a coronavirus vaccine has received another shot in the arm with the US biotech firm Moderna becoming the latest to reveal impressive results from phase 3 trials of its jab.

An interim analysis released on Monday, and based on 95 patients with confirmed Covid infections, found the candidate vaccine has an efficacy of 94.5%. The company said it now plans to apply to the US regulator, the Food and Drug Administration, for emergency-use authorisation in the coming weeks. In the trial, 90 of the patients received the placebo with the remaining five the vaccine.

11.58am GMT

Stocks have just turned sharply higher in London, with the FTSE 100 surging by 89 points or 1.4% to 6,400 points.

11.53am GMT

Analysts at Morgan Stanley have recommended that investors should keep their faith in the global recovery, despite the rise in Covid-19 cases.

In their 2021 Global Strategy Outlook, they say a V-shaped' recovery, greater clarity on vaccines and continued policy support should support shares and bonds next year.

2020 was defined by abnormality. A global pandemic. A 31%Q drop in 2Q20 US real GDP. US$7.3 trillion of G4 central bank balance sheet expansion year-to-date. Oil prices trading at -US$37. Some of the fastest declines, and rallies, for markets on record. We think that 2021, in contrast, will be defined by a return to more normal conditions. This feels odd to write, as the global pandemic rages and many lives remain disrupted. But we think that it will be true.

The year ahead should see economic growth recover, control of the virus improve and uncertainty decline. Challenges remain, new normals' will materialize at the micro' level and we doubt that the recovery will be a smooth, one-way street. But we think that things will be better. Trust the recovery, keep the faith.

Morgan Stanley strategists:
Keep the faith, trust the recovery."https://t.co/6xLTf3y8Bb via @ossingerj pic.twitter.com/v9cSJIWg2F

11.21am GMT

Germany's central bank has predicted that the country's economy could shrink again this quarter, as the second wave of Covid-19 cases hits Europe.

Overall economic performance could stagnate or even decline after very vigorous growth in the summer."

#Monatsbericht November: Erholung der deutschen Wirtschaft vorerst unterbrochen https://t.co/L9RGVjYOjH #BIP #Konjunktur #Wirtschaft #Deutschland #Coronakrise #Covid19 pic.twitter.com/lkKmzpzUeL

We're not out of the woods yet.

We cannot afford a yo-yo shutdown with the economy constantly opening and closing.

10.45am GMT

The pound is becalmed this morning, at the start of a crunch week of Brexit trade deal talks.

Sterling is down 0.15% against the euro at 1.112, and pretty much flat against the US dollar at $1.318.

It's looking increasingly likely that it will be just another deadline that will just loom and pass, and instead talks will go down to the wire.''

We really are in the last week to 10 days of this, if there is not a major breakthrough over the next week to 10 days then I think we really are in trouble and the focus will shift to preparing for a no-trade deal and all the disruption that that bring."

10.20am GMT

The Covid-19 pandemic has driven a boom in online shopping...and a surge in complaints about parcel deliveries.

Citizens Advice reports that complaints about home deliveries have trebled since coronavirus hit, often due to items arriving late or damaged, or not arriving at all.

Ahead of the busiest period of the year for home deliveries, the charity is reminding consumers that it is the seller's responsibility to deliver the items to the buyer's door, and consumers are entitled to a refund if its service fails....

Its report chimes with the Guardian's own postbag which has similarly recorded a big jump in complaints about parcels being delivered to the wrong address, and the stores wrongly refusing to refund the customer.

10.05am GMT

Japan's forecast-beating growth figures and the RCEP trade deal have helped European markets to post steady gains this morning, says AJ Bell investment director Russ Mould:

Solid and steady gains are arguably just what investors need after a very volatile period. The catalyst for the latest move for equities is more positive noises on vaccines, the formation of a new trading bloc involving the likes of China, Japan, South Korea, Australia and New Zealand, and better-than-expected Japanese GDP figures.

These factors helped Asian markets sprint ahead before passing the baton on to European markets with the FTSE 100 up 0.7% early on.

9.53am GMT

Mobile phone giant Vodafone's revenues have taken a hit from the slump in international travel in the pandemic.

Today's results underline increased confidence in our full year outlook. We are reporting a resilient first half performance and we continue to see good commercial momentum across the Group. The results demonstrate the success of our strategic priorities to date, namely increasing customer loyalty, growing our fixed broadband base, driving digitisation to simplify the company and capture significant cost savings, and deliver 5G efficiently through network sharing.

COVID-19 and the reduction in roaming revenues, through the significant reduction in international travel, is currently obscuring our underlying commercial progress, with Q2 service revenue growing by 1.5% excluding roaming.

9.30am GMT

European stock markets have opened higher, lifting the Stoxx 600 index by around 0.6% - back towards last week's eight-month highs.

Retail sales in China rose at the fastest rate of the year in October, a strong sign that improving consumer demand is contributing to the economy's solid economic recovery from the covid pandemic. Sales rose an impressive 4.3% MoM, well ahead of the 3.3% increase recorded in September. Retail sales returned to growth in August after 7 consecutive months of decline.

Adding to the upbeat mood data revealed that Japan's economy rebounded sharply in Q3 with the economy growing by 5% QoQ, ahead of the 4.4% forecast, boosting the world's third largest economy out of recession.

9.07am GMT

The FTSE 250 index of mid-sized companies, has also opened higher - with some pandemic-battered firms among the risers.

Cineworld, which was forced to shut its UK and US screens last month, are up 8.5%, while cruise operator Carnival has gained 5.5% and easyJet is up 4%.

.. it seems to be a more fundamentally-based rotation from the stay-at-home stocks to the re-open stocks. .. You can see this below with the Goldman Sachs closing' basket making lower highs while the re-open' basket is catching up fast." @TimmerFidelity pic.twitter.com/jFdPdnoPbI

8.55am GMT

In the City, shares in travel and hospitality companies, miners and banks are rising - as traders continue to price in a vaccine-led recovery in 2021.

Airline group IAG is the top riser on the FTSE 100, up 5%, while hotel chain Whitbread has gained 3.5% (helped by an upgrade to buy' from sell' from Goldman Sachs).

8.47am GMT

Markets have also been lifted by the news that 15 Asia-Pacific countries have signed a historic free trade deal.

The Regional Comprehensive Economic Partnership (RCEP) is one of the largest free trade deals in history, covering 2.2 billion people and 30% of the world's economic output.

The deal sets the terms of trade in goods and services, cross-border investment and new rules for increasingly important areas such as electronic commerce and intellectual property. The effect on the trade of finished goods between Asian nations will be particularly marked, analysts have said.

In a joint statement, the leaders of the countries said the trade deal would form a crucial part of their plans to recover from the pandemic, which has forced countries around the world to lock down their economies.

8.28am GMT

Stock markets across the Asia-Pacific region rose sharply today, lifted by vaccine optimism and the news that Japan's economy grew faster than expected last quarter.

Japan's Nikkei jumped 2% to fresh 29-year peak, extending its recent gains.

Global markets start the week in Risk-On mood w/Asia stocks hit record peak following ATH on Wall St as vaccine hopes dampen virus fears. Bonds steady w/US 10y yields at 0.89%. Dollar retreats w/Euro at $1.1848. Oil pushed higher w/Brent $43.29/bbl. Gold $1891. Bitcoin $16.2k. pic.twitter.com/ebRX965H6Y

With vaccine hopes on the rise, and central banks signalling globally that monetary policy will remain ultra-easy even if a vaccine does arrive, equity markets will remain either a straight to go, or a buy on the dip.

8.17am GMT

The BBC says Japan's return to growth is is part of a wider global economic recovery across Asia's economics that has been dubbed a Zoom boom":

The global economy as a whole is expected to contract by 4.4% this year, while the US will shrink by 4.3%, according to the International Monetary Fund.

However, Asian economies are leading the way when it comes to showing signs of recovery. China remains on track to grow by about 2% this year, the most of any major economy.

Japan leads economic 'Zoom boom' out of recession https://t.co/1b13Hnc93o

The partial rebound suggests a full recovery from the pandemic will prove protracted and difficult, especially if a recent rise in coronavirus cases develops into a larger wave. Japan recorded 1,722 new cases of Covid-19 on Saturday, the most recent day for which data was available, compared with 868 a fortnight earlier.

The economy has come back steadily but the recovery is a work in progress," said Yasutoshi Nishimura, Japan's economy minister. People are still in a defensive mindset."

8.10am GMT

Japan has cheered global investors today by returning to growth, after the pandemic dragged its economy into an unprecedented recession.

ICYMI! #Japan's economy grew 5% in Q3, beating expectations. On an annualized basis, #GDP grew 21.4%. pic.twitter.com/eFW2okEvYH

The Japanese economy for July-September 2020 is still in a severe situation due to the COVID-19, but it is showing movements of picking up later in the quarter."

7.46am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
After its best week since April, the UK stock market is beginning the new week on the front foot.

European equities have opened higher at the start of trading, as investors continue to grasp onto hopes of successful Covid-19 vaccine rollouts.

European Opening Calls:#FTSE 6369 +0.84%#DAX 13219 +1.09%#CAC 5449 +1.28%#AEX 605 +1.28%#MIB 21206 +1.44%#IBEX 7898 +1.47%#OMX 1913 +0.85%#STOXX 3472 +1.16%#IGOpeningCall

There is certainly elevated chatter that potential shutdowns in the US will weigh more in the near-term and maybe so, but investor sentiment is the most elevated since 2017 - two standard deviations of the mean of past 10 years [according to AAII].

I'm very confident that transmission between people will be reduced by such a highly effective vaccine - maybe not 90% but maybe 50% - but we should not forget that even that could result in a dramatic reduction of the pandemic spread."

Markets will be on high alert for any further vaccine news, especially efficacy data from Moderna and AstraZeneca even if we don't know the exact timings.

We could also hear that the Pfizer/BioNTech vaccine will get FDA emergency use approval later in the week.

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