News & Analysis

Overnight on Wall Street: Thursday 02 July 2020

July 2, 2020

By Deepta Bolaky
@DeeptaGOMarkets

Equity Markets

Global stocks were mixed on Tuesday as investors digested both good and bad news. Amid the rising number of virus cases in the US, a vaccine update by Pfizer and BioNTech and a series of better-than-expected manufacturing PMIs supported the stock market.

On Wednesday, Pfizer Inc ad BioNTech announced early positive preliminary data from the most advanced of four investigational vaccines from the vaccine program:

  • Preliminary data demonstrated that BNT162b1 could be administered in a dose that was well tolerated, and generated dose dependent immunogenicity, as measured by RBD-binding IgG concentrations and SARS-CoV-2 neutralizing antibody titers
  • Early positive data shows that BNT162b1 can be administered at a low effective dose of 10ug and provide neutralizing titers at or above human convalescent plasma as early as 4 weeks after vaccinations
  • Local reactions and systemic events after immunization with 10 μg and 30 μg of BNT162b1 were dose -dependent, generally mild to moderate, and transient. No serious adverse events were reported
  • Data from the ongoing Phase 1/2 clinical trial are expected to enable selection of a single lead candidate and dose level for a potential large, global Phase 2b/3 safety and efficacy study that may begin as early as July 2020, subject to regulatory approval
  • Efforts to manufacture the leading candidates, at risk, are gearing up. If the safety and efficacy study is successful, and the vaccine receives regulatory approval, the companies are currently expecting to manufacture up to 100 million doses by the end of 2020 and potentially more than 1.2 billion doses in 2021

Major US equity benchmarks ended on a mixed note:

  • Dow Jones Industrial Average lost 78 points or 0.3% to 25,735.
  • S&P 500 rose by 16 points or 0.5% to 3,116.
  • Nasdaq Composite added 96 points or 1% to 10,155.


Source: Bloomberg Terminal

Currency Markets

In the FX space, major currencies were relatively stronger against the US dollar. The vaccine updates and upward revisions of final readings of PMIs in the US and Europe buoyed risk appetite. The ISM Manufacturing report showed that economic activity in the manufacturing sector grew in June, with the overall economy notching a second month of growth after one month of contraction.

The British Pound was among the best-performers despite negative  Brexit-related headlines. The Pound rose higher mostly on the back on the overall risk sentiment and a weaker US dollar. The GBPUSD pair rose to a high of 1.2490 on Wednesday.


Source: GO MT4

Commodities

After the American Petroleum Institute reported a larger-than-expected crude oil stock draw from previous 1.749M to -8.156M in June 26, a positive EIA report drove crude oil prices higher. Commercial crude oil inventories in the United States decreased by 7.2 million barrels in the week ending June 26th. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading around $39.54 and $42.03, respectively.

Gold

As risk sentiment improves following upbeat economic data and positive virus updates, Gold pared some of its recent gains. However, the rising number of virus cases in certain regions and the risk of a second wave of infection remains the element of caution. The XAUUSD pair is currently trading around the $1,767 mark ahead of the Nonfarm Payrolls report scheduled to be released on Thursday.

By Deepta Bolaky
 @DeeptaGOMarkets

Key upcoming events

  • Imports, Exports, and Trade Balance (Australia)
  • Consumer Price Index (Switzerland)
  • Unemployment Rate (Eurozone)
  • Nonfarm Payrolls, Trade Balance, Average Hourly Earnings, Jobless Claims, Labor Force Participation Rate, Underemployment Rate, Unemployment Rate and Factory Orders (US)
  • International Merchandise and Markit Manufacturing PMI (Canada)
Friday, 03 July 2020 
Indicative Index Dividends
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Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs. Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.

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