UK Approves Pfizer Vaccine, US Closes At Record Highs

The UK has become the first Western country to approve a COVID-19 vaccine, giving emergency authorisation for Pfizer-BioNTech’s (PFE, BNTX) 95% effective solution. The jab could be rolled out as early as next week, with frontline workers and the most vulnerable likely to be at the head of the queue. The vaccine does present logistical challenges given that it must be stored at -70 degrees celsius, however, this will be seen as a big step forward in getting the economy back on track. Expect some volatility from Pfizer today, early indications are that it could open up as much as 4% at time of writing.

Both the S&P 500 and Nasdaq Composite closed at record highs on Tuesday, as drugmakers continue to seek emergency approval from regulators globally to roll out COVID-19 vaccines. The rally came despite Federal Reserve chairman Jerome Powell cautioning that major economic risks remain on the horizon, including vaccine distribution and efficacy, plus the impacts of the huge pandemic surge currently underway in the US. After the market close there was positive news on progress towards a new round of fiscal stimulus, with a bipartisan set of senators proposing a $908bn package, the first movement since negotiations fell apart in November before the presidential election. That is a long way short of the $2trn package Democrats were initially pushing for but could act as an interim solution until President-elect Joe Biden takes office in January.

Mixed-bag of sectors post gains on Tuesday

The Nasdaq Composite was the best performer among the three major US stock indices on Tuesday, with a 1.3% gain, versus 1.1% for the S&P 500 and 0.6% for the Dow Jones Industrial Average. Tuesday’s best performing stock sectors were a mixture of 2020’s winners and losers. The S&P 500’s financials sector gained 1.6%, with the communication services and information technology sectors adding 2% and 1.4%. Insurer Lincoln National, thermal imaging company Flir Systems, hard drive maker Western Digital, and Discover Financial Services led the index, with all four gaining more than 5%. In corporate news, Salesforce confirmed its deal to buy Slack, at a $27.7bn valuation. Slack stock closed the day 2.2% higher and is now up by around 50% since news of the deal first broke last week.

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