Stock indices are at record highs

The start of the new week cannot look better, with the only bad news being the imposition of EU tariffs on imports of goods from the USA. However, the stock market did not stop on the way to a record open and subsequent growth to historical highs. The reason is positive news about a vaccine that is 90% effective, which experts say is a huge step for science.


Pfizer and BioNtech have a 90% effective vaccine

The new coronavirus vaccine, developed by the German company BioNtech in collaboration with Pfizer, is 90% effective, according to the first results of the third phase of testing. This is much more than most experts expected. Former overall expectations were that the vaccine would be at least 75% effective. According to regulators, the vaccine could be approved, even with 50% efficiency. Pfizer also stated that there were no serious side effects during the vaccination. The third phase of clinical trials will continue. More than 43,000 people participated in the third phase of clinical trials. The vaccine could be available to people on the front line by the end of this year.


The report was, of course, a huge boost to the financial markets. Out of nowhere, the vaccine news pushed stock valuations to record highs in some cases. Stock indices in the USA are currently at the highest levels in history, and European stock indices are also going through one of the best trading sessions today. The generally positive sentiment thus again works more with expectations and it still remains uncertain how the pandemic will continue by the end of the year and whether it will require further general restrictions. Still, this could put stock markets under pressure, but the early arrival of the vaccine would be sufficient support for the markets to grow further.


The S&P 500 grew by 3%, Stoxx Europe by 4.2%, DAX by 6% and Nasdaq by 1.3%. The more cyclical sectors that were hit the hardest during the pandemic are doing best.


Chart: 5M S&P 500 index chart (Source: PurpleTrading cTrader)


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