Stock markets soared on Monday after German pharmaceutical giant Pfizer said early data suggests its COVID-19 vaccine seems safe and effective, raising hopes that the world economy is now one step closer to getting back to normal.
Markets were already sharply higher on the U.S. election result when Pfizer said that data shows vaccine shots may be 90 per cent effective at preventing COVID-19, indicating the company is on track this month to file an emergency use application with U.S. regulators.
The vaccine candidate, known as BNT162, “has emerged as a front-runner in the tight race, and the latest data were encouraging, though logistical and supply chain challenges remain,” said Cinney Zhang, a pharmaceutical industry analyst with Bloomberg Intelligence.
Pfizer’s shares gained 15 per cent. Its vaccine partner BioNTech did even better, up 25 per cent.
The companies said in a release early Monday morning that out of roughly 44,000 people in the Phase 3 trial, only 94 have contracted the virus, and there are no serious side effects reported so far. This “raises the hope that the patient demographics will be broad enough for an early approval,” Zhang said.
Any economic recovery depends on checking the pandemic, and investors pounced upon the news. Pfizer’s data is only preliminary and does not mean a vaccine is imminent. Getting the vaccine to billions of people will be a massive undertaking, even if it is approved.
But even the potential of an effective vaccine on the horizon was all investors needed to shake off some of their doom and gloom.
“Investors may be seeing this as a potentially game-changing announcement as stocks in some of the sectors that had been particularly hammered by COVID have been soaring, including United Airlines (up 19.5 per cent), Royal Caribbean Cruises (up 21.1 per cent ) and MGM Resorts (up 17.2 per cent ),” said Colin Cieszynski, chief market strategist with SIA Wealth Management in Toronto.
“Moderate overnight gains in the markets have morphed into explosive gains this morning.”
The Dow Jones Industrial Average opened more than 1,500 points higher, or 4.2 per cent. In Toronto, the S&P/TSX Composite Index was up more than 400 points, or almost three per cent.
Interestingly, the one sector that was lower was technology, as big tech company stocks that have done very well in the pandemic gave back some of their gains. Netlfix was down six per cent, Amazon was down by about three per cent, and video conferencing software company Zoom was down by 16 per cent, on speculation that booming demand for the company’s services may soon drop from its current level.
In Europe, France’s CAC 40 jumped 5.6 per cent to 5,239, while Germany’s DAX surged 5.1 per cent to 13,112. Britain’s FTSE 100 gained four per cent to 6,145.
U.S. election outcome also helped
Markets were already buoyant about the result of the U.S. elections, which saw Democrat Joe Biden win the presidency.
“This means less uncertainty, less turmoil in terms of foreign relations, and reversal of some futile policies which were put by the Trump administration,” Naeem Aslam, chief market analyst at Ava Trade, said in a commentary.
Many analysts expect trade tensions to de-escalate under a Biden presidency. Still, not all trade tensions are expected to vanish even if Biden rolls back some of the tariffs imposed by President Donald Trump on U.S. trading partners, especially China, in the past several years.
The European Union pressed ahead Monday with plans to impose tariffs and other penalties on up to $4 billion US worth of U.S. goods and services over illegal American support for plane maker Boeing. That followed a World Trade Organization ruling in the U.S.’s favour over EU support for Airbus.
In Asian trading, Japan’s Nikkei 225 surged 2.1 per cent to finish at 24,839.84. Australia’s S&P/ASX 200 added 1.8 per cent to 6,298.80. South Korea’s Kospi advanced 1.3 per cent to 2,447.20. Hong Kong’s Hang Seng rose 1.2 per cent to 26,016.17, while the Shanghai Composite gained 1.9 per cent to 3,373.73.
For now, investors seem inclined to shrug off Trump’s refusal to concede and threats of legal action. With Republicans expected to retain their grip on a majority in the Senate, they are betting on continuity in tax, regulatory and other policies, analysts said.
Oil price gains $3
“Trump not conceding a loss is near-term noise looking to wrong-foot Biden at the start of his presidency, while Republicans in a position to not concede ground on legislation may continue to frustrate Biden’s agenda,” Mizuho Bank said in a commentary.
If Republicans remain in charge of the Senate, chances for a big package of economic aid are weaker, and the Federal Reserve will likely need to step up with more support, said Jeffrey Halley of Oanda.
“More easing is almost certainly on the way at December’s FOMC meeting,” Halley said, referring to the Fed’s policy-making committee. “Looser monetary policy equals higher asset prices in a zero per cent interest rate world.”
Despite rising infections and deaths from the pandemic, economies have continued to recover from the shocks of earlier shutdowns to combat outbreaks.
Biden has vowed to move decisively to try to counter the worsening coronavirus pandemic, which has sapped economic growth, trade and travel, as the U.S. and Europe face a troubling rise in infections. Even if the strictest lockdowns don’t return in the United States, the worsening pandemic may dampen consumption and erase profits.
In energy trading, U.S. benchmark crude gained more than 10 per cent, or $3.16, to $40.30 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose $3.08 to $42.53 a barrel.
Canada adds 62000 jobs in November; unemployment rate falls to 8.5 per cent – The Globe and Mail
The Canadian labour market continues to defy expectations – at least for now.
Employment rose by 62,100 in November and the unemployment rate declined to 8.5 per cent from October’s 8.9 per cent, Statistics Canada said Friday. The gain was propelled by full-time work, which saw an increase of nearly 100,000 positions. All told, the labour market has recovered about 80 per cent of the three-million jobs that were lost in March and April.
November’s job gain was the weakest since the recovery began in May. However, it was also better than expected. The median estimate from economists was for a gain of 20,000 positions, with several calling for a decline due to tighter COVID-19 restrictions.
A decline may simply be postponed. Statscan’s report pertained to work conditions between Nov. 8 and 14, thereby missing further tightening of restrictions in some parts of the country, such as Toronto and nearby Peel Region.
“As a result, it’s likely that Covid will catch up with the Canadian economy in the December data, with a decline expected in both employment and overall economic activity,” said Royce Mendes, senior economist at CIBC Capital Markets, in a note to clients.
The November report showed various cracks in the labour market. For one, Manitoba lost around 18,000 jobs. Before Statscan’s survey period, the province had imposed tighter public-health measures – including a ban on in-person shopping of non-essential goods – in a bid to curb rapidly worsening infections. Most of those affected last month were working part-time hours, Statscan noted.
At a national level, the information, culture and recreation industry lost 26,000 positions. Accommodation and food services fell by 24,000 jobs for its second consecutive monthly decline. About one-quarter of people on temporary layoff last month were in the hospitality industry. It’s almost assured that more pain is coming as restaurants are targeted by restrictions and bookings fall dramatically.
There were, however, several encouraging signs in November’s report. With its latest gain, the finance, insurance and real-estate industry is back to prepandemic levels of employment. Construction had a banner month, adding 26,000 positions – the first increase since July, driven largely by Ontario.
Furthermore, all Atlantic provinces enjoyed job growth. New Brunswick, Newfoundland and Labrador and Nova Scotia are all back to pre-crisis levels of employment.
The second wave of COVID-19 continues to disrupt work. There were 4.6 million Canadians who worked from home in November, among those who worked at least half their usual hours. That was an increase of roughly 250,000 from October.
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Canada added 62,000 jobs in November, slowest month of recovery since COVID-19 – CBC.ca
Canada’s economy added 62,000 jobs last month, which is better than economists had been expecting, but it’s also the lowest total since the labour market recovery from COVID-19 began in May.
Statistics Canada reported Friday that the jobless rate ticked down four basis points to 8.5 per cent. That’s down from a peak of 13.7 per cent in May, but still well above the 5.6 per cent rate seen in February, before the pandemic.
Canada lost more than a million jobs in March and another two million in April, before the job market started to recover in May. According to Statscan, more than 19.1 million Canadians aged 15 or over had some sort of job in February. Last month, that figure stood at just over 18.6 million.
There are currently 1.7 million people in Canada officially categorized as unemployed, which means they would like to work but can’t find any. Roughly one quarter of them — 443,000 people — have been out of work for more than half a year.
Manitoba lost 18,000 jobs last month, while Ontario added 36,000 and Quebec 15,000. British Columbia added 23,000 and the Atlantic provinces added a total of 17,000.
Mostly full time
While the overall rate of job gains is undeniably slowing, economist Royce Mendes with CIBC did see some reason for optimism in the numbers, specifically the fact that most of the new jobs were full time, which boosted the total number of hours worked by 1.2 per cent — faster than the increase seen a month earlier.
But with cases spiking across Canada and more regions locking down more parts of the economy, he thinks the streak of job gains will come to an end this month.
“It’s likely that COVID will catch up with the Canadian economy in the December data, with a decline expected in both employment and overall economic activity,” Mendes said.
Leah Nord with the Canadian Chamber of Commerce said the job slowdown shows that the government needs to do a better jobs of testing for COVID-19 and tracing contacts, and making much broader use of rapid testing to ensure businesses stay open for the long Canadian winter ahead.
“The short-lived partial rebound in jobs is turning an unfortunate corner heading into a potentially protracted second wave,” she said. “As we look forward, we believe there is increasing risk for a steady decline in employment over the coming months as governments and health authorities grapple with transmission mitigation.”
Canadian economy added 62,000 jobs in November, unemployment rate fell to 8.5% – CityNews Toronto
The rate of job growth continued to slow in November with the economy adding 62,000 jobs, down from 84,000 in October.
The gains were mostly focused in full-time work with a gain of 99,000 jobs, offset somewhat by a decline in part-time work of 37,000 positions, Statistics Canada reported Friday.
The average economist estimate had been for a gain of 20,000 jobs and an unchanged unemployment rate, according to financial data firm Refinitiv.
The gains in November left the country 574,000 jobs short of recouping the approximately three million jobs lost from lockdowns in March and April that sent the unemployment rate skyrocketing to 13.7 per cent in May.
The unemployment rate fell to 8.5 per cent compared with 8.9 per cent in October.
The unemployment rate would have been 10.9 per cent in November, StatCan said, had it included in calculations Canadians who wanted to work last month but didn’t search for a job.
The agency said 1.5 million people searched for jobs in November, a small drop of 39,000 from October, but still more than 448,000 or so who were looking for work in February, pre-pandemic.
The report noted that job searchers made up an increasing share of the total number of unemployed.
The youth unemployment rate fell 1.4 per cent to 17.4 per cent with a gain of about 20,000 jobs for the age group, mostly concentrated among young men with little change to the employment situation for women age 15 to 24.
Similarly, employment among women 25 to 54 years old didn’t change much in November after six straight months of seeing their numbers rise.
Positions in the hard-hit accommodation and food services sector declined for the second consecutive month, shedding 24,000 jobs in November.
That figure doesn’t take into account renewed restrictions in areas like Toronto that kicked in later in the month.
“As a result, it’s likely that COVID will catch up with the Canadian economy in the December data, with a decline expected in both employment and overall economic activity,” notes CIBC senior economist Royce Mendes.
Overall, the pace of job gains has slowed, with employment rising by 0.3 per cent in November compared to an average of 2.7 per cent per month between May and September.
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