Oil is back and vaccine picks up struggling industries

By Jonathan Jackson. Published at Nov 24, 2020, in Market Wrap

Every week now, there seems to be a new vaccine report.

As Joshua Mahony, Senior Market Analyst at IG reports, “Another Monday vaccine announcement has brought a more mixed report from AstraZeneca, with the UK-led project bringing vastly different results depending on the dosing method.

“With AstraZeneca 2% down in early trade, it is evident that markets are somewhat underwhelmed after the largest of the two trials providing just a 70% efficacy.

“Unfortunately for AstraZeneca, markets have become accustomed to efficacy rates closer to 95% in the wake of the Pfizer and Moderna announcements.

“While the firm has understandably focused on the 90% efficacy rate seen when a half dose is followed by a full dose a month later, the significantly reduced sample size does provide less confidence in their findings.

From a UK perspective, the country has pre-ordered a whopping 100 million doses of the AstraZeneca vaccine. However, with many already unwilling to undertake a hastily produced inoculation, the fact that its efficacy is also questionable does little to help bolster plans for a mass-vaccination programme.

“UK-stocks are on the rise ahead of a government announcement to reopen much of the UK economy once the nationwide lockdown ends on 2 December.

“Coming into a critical festive period for retailers, the decision to reopen non-essential stores could help stave off collapse for some of the hardest-hit firms.

“However, with mass adoption of the vaccine still some way off, there are many who will question whether Johnson’s latest plan will simply spark a third wave without having allowed the second to fully subside.

“Nevertheless, from a market perspective, we are seeing money flow into value once more, with energy, travel, and financial stocks heading up the FTSE 100.”

As for Australia, the S&P/ASX 200 Index closed 0.3 per cent higher at 6561.6 points. This is the highest level the benchmark has been since late February.

Energy was the best performing sector. Materials also performed well and oil prices are trading near their highest levels since March, while iron ore prices eased on Monday after rising last week.

Oil is back

Oil performed well over the weekend and into Monday.

According to eToro market analyst Adam Vettese, “The price of oil held at over $43 a barrel in overnight trading on Sunday and into Monday morning’s European open, its highest level since early September.

“That follows the third straight week of gains for oil prices, as progress towards a widely available Covid-19 vaccine has raised hopes of an improvement in energy demand.

“The price of oil has also been boosted by expectations that global oil cartel Opec and its allies will agree to delay plans to increase their output by two million barrels a day from January, according to Bloomberg. Last week, US-listed Chevron and Exxon gained 2.4% and 3.3% respectively, taking their gains over the past month to 18.2% and 8.1%. London listed BP and Royal Dutch Shell gained 3.2% and 7.3% last week respectively, with their gains over the past month standing at 18.9% and 27.2%.

Vaccine winners

Vettese says that while it has only been two weeks since Pfizer announced its 90% plus effective Covid-19 vaccine trial result on 9 November, there have been winners and losers stock-wise.

“Until Pfizer made its announcement, the commodities, financials and energy sectors had suffered this year, with losses of 34%, 17% and 50% respectively according to financial advice firm Edward Jones. From 9 November to18 November, those three sectors gained 6%, 10%, and 22%. At the other end of the spectrum, the technology and consumer discretionary sectors had gained 34% and 29% respectively in the year up to Pfizer’s announcement. From November 9th to 18th, the sectors both fell back by 1%.”

Tickers

Dow: +1.12%

S&P 500: +0.56%

NASDAQ: +0.22%

FTSE 100: -0.28%

DAX: -0.08%

CAC 40: -0.07%

Asia Dow: +0.15%

Nikkei 225: -0.42%

Hang Seng: +0.13%

ASX 200: +0.82%

AUD: 0.73


Where to invest $1,000 right now

When the experts at Next Investors have a stock pick, it may pay to listen.

The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.

They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.

Click the link below to see what they are currently investing in.


SEE THE PORTFOLIO

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!

X