Wednesday July 15th

15-07-2020

Dow futures surge 500 points after Goldman’s blowout quarter, Moderna’s vaccine news

U.S. stock index futures popped Wednesday on the back of positive vaccine news from Moderna and a blowout quarter from Goldman Sachs. Futures on the Dow Jones Industrial Average jumped 527 points, or 2%. S&P 500 futures climbed 1.4%. Nasdaq-100 futures rose 0.8%. Moderna said its coronavirus vaccine produced a “robust” immune response, or neutralizing antibodies, in all 45 patients in its early stage human trial, according to newly released data published Tuesday evening in the peer-reviewed New England Journal of Medicine. Shares of Moderna surged 15% in premarket trading. Stocks directly tied to an economic reopening jumped following the vaccine news. American Airlines, United Airlines, Royal Caribbean Cruise Lines all popped more than 7% each in premarket trading. “This should further increase confidence that we are getting a robust immune response, in that there should be greater confidence that this will be protective to a degree in transmission of Covid,” Michael Yee, a managing director at Jefferies, said on CNBC’s “Fast Money.” “This is all along our positive thesis and our view that both Moderna and Pfizer-BioNTech are definitely on a good track to get a vaccine by the end of the year.” Earnings season continued after Goldman Sachs reported quarterly numbers that easily beat analyst expectations. The company’s results were driven by a 93% surge in trading revenue. Goldman shares rallied more than 4%. Bank earnings had been mixed leading up to Wednesday. JPMorgan Chase reported on Tuesday better-than-expected quarterly results on the back of a massive surge in trading revenue. Wells Fargo suffered a $2.4 billion loss and slashed its dividend to 10 cents per share. Stocks finished Tuesday’s volatile session on a high note with the Dow jumping more than 500 points to post its best day in two weeks. The S&P 500 jumped 1.3%, boosted by cyclical names sensitive to the economic recovery. The tech-heavy Nasdaq underperformed for a second day, rising 0.9% as the massive rally in Big Tech slowed down. Earnings from big banks so far have been mixed. Stocks in Asia shed earlier gains and were mixed on Wednesday as concerns over U.S.-China tensions weighed on investor sentiment. Mainland Chinese stocks led losses on the day regionally among the region’s major markets, with the Shanghai composite down 1.56% to about 3,361.30 while the Shenzhen component shed 1.874% to around 13,734.13. Hong Kong’s Hang Seng index also declined 0.28%, as of its final hour of trading. In Japan, the Nikkei 225 gained 1.59% to close at 22,945.50 while the Topix index added 1.56% to end its trading day at 1,589.51. South Korea’s Kospi rose 0.84% to close at 2,201.88. Oil prices rose on Wednesday after a sharp drop in U.S. crude inventories, with the market waiting for more direction from a meeting later in the day on the future level of production by OPEC and its allies. Brent crude futures were up 56 cents, or 1.3%, at $43.46 a barrel, and U.S. West Texas Intermediate crude futures rose 63 cents, or 1.6%, to $40.93 a barrel. Gold rose to a one-week high on Wednesday, holding comfortably above the key $1,800 level, on safe-haven demand fuelled by concerns over brewing U.S.-China tensions and their impact on a global economy already reeling from the COVID-19 pandemic. Spot gold was up 0.1% to $1,809.61 per ounce, having hit its highest since July 9 at $1,814.40. U.S. gold futures were steady at $1,813.10.