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Research Market strategy
by Swissquote Analysts
Morning News

AstraZeneca-Oxford Vaccine Approved for Use in the U.K.

Topic of the day

The U.K. authorized a Covid-19 vaccine developed by the University of Oxford and AstraZeneca PLC, opening the door for distributing millions of doses in a country where a more infectious variant of the coronavirus has contributed to surging cases. British health officials also recommended a delay of as long as three months between both doses of the vaccine, guidance that also applies to the shot developed by Pfizer Inc. and BioNTech SE that the U.K. authorized. The delay will allow inoculations to reach more people more quickly as the variant pushes new cases to records and hospitalizations soar. The green light represents the third emergency-use approval of a Western-developed vaccine this month and comes as cases rise sharply in Europe and the U.S., which reported its first confirmed case of the variant last week.


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Swiss stocks

The SMI closed up 0.2 percent on 10,704 points on Wednesday, the last trading day of 2020, and 1 percent higher since the start of a year marked by the coronavirus pandemic. From its all-time high of 11,270 points in February, the index slid 32 percent to its year’s low of 7,650 points in March amid fears of severe and lasting economic effects from pandemic-related shutdowns. However, a rally has since sent the SMI up 40 percent from its year’s low in March amid massive state aid programmes and optimism that fast-tracked vaccines can revive the economy. Sika rose 34 percent and Lonza 61 percent during the year, Lonza partly because it produces Moderna’s Covid-19 vaccine. Financial stocks fell during the year. Swiss Re was down 23 percent, Swiss Life 15 percent and Credit Suisse 13 percent. UBS performed above average, gaining 2 percent during the year. Among the “big three”, Novartis was down 9 percent, and Nestle and Roche ended in slightly negative territory from the start of 2020.

International markets

Europe

European stocks declined on Thursday, dragged down by a 1.5% fall of the FTSE 100 index a few hours before the U.K. leaves the European Union's single market and customs unions, and just as the country is moving to new severe restrictions due to coronavirus concerns. The pan-European Stoxx 600 index was down 0.4% in thin trading on a day when some major European exchanges are closed, such as Frankfurt, or operate on a shortened trading day, as in Paris. The French CAC 40 index opened down 0.4%, with shares of French drinks maker Pernod Ricard falling 2% while U.K. competitor Diageo was down 3.8% in London trading. Meanwhile, French luxury-goods makers LVMH, Kering and Hermès International were among the top risers on the Paris stock exchange. LVMH, the owner of brands such as Louis Vuitton, Christian Dior and Moët Champagne, said it would close its acquisition of Tiffany on Jan. 7, after shareholders of the U.S. jeweler "overwhelmingly" approved its revised offer on Wednesday. International Consolidated Airlines , the owner of the U.K.'s flagship carrier British Airways, was among the biggest decliners in London, down more than 3% on concerns about more reduced travel in the first half of 2021.

United States

U.S. stocks spent the final session of the most tumultuous year in recent memory doing something that became routine in 2020: setting records. The Dow Jones Industrial Average rose 196.92 points, or 0.7%, to 30606.48, recording its 14th record close of 2020 after a relatively muted session ahead of the year-end holiday. The S&P 500 recorded its 33rd record of the year, rising 24.03 points, or 0.6%, to 3756.07. The Nasdaq Composite added 18.28 points, or 0.1%, to 12888.28-missing its 56th record close by about 10 points. In the end, the three major indexes notched more than 100 record closes in 2020, and finished a chaotic year in winning fashion. The Dow rose 7.2% for 2020. The S&P 500 jumped 16%, the Russell 2000 index of smaller-cap stocks gained 18%, and the Nasdaq surged 44%. Adding those gains to 2019 gave the S&P and Nasdaq their best two-year runs since 1998 and 1999, the height of the dot-com boom. For the Dow industrials, it has been the best two-year run since 2017. S&P Dow Jones Indices on Wednesday said Enphase Energy Inc., a component of the S&P MidCap 400, will replace Tiffany & Co. on the S&P 500, effective Jan. 7. Tiffany is being acquired by LVMH Moet Hennessy-Louis Vuitton SE in a deal expected to be completed soon, S&P Dow Jones Indices said. Capri Holdings Ltd. will move from the S&P SmallCap 600 to the MidCap 400, replacing Enphase, and it will in turn be replaced on the S&P SmallCap 600 by Celsius Holdings, Inc., S&P Dow Jones Indices said. Also on Wednesday, S&P Dow Jones Indices said Brooks Automation Inc. will move from the S&P SmallCap 600 to the S&P MidCap 400, replacing WPX Energy Inc., which will be acquired by Devon Energy Corp.

Asia

The stock markets in East Asia and Australia start the week with gains. The Shanghai Composite is up 0.9 per cent to 3,504 points. Analysts at Central China Securities expect the positive momentum to strengthen in the coming weeks. In addition, corporate results for the first quarter are expected to show solid growth as a result of the improving economy in China. The geopolitical environment also seems to be improving after China and the EU reached an investment agreement last week, they say.

Bonds

U.S. Treasury yields climbed in Asia, having closed out the final trading session of the year with modest moves. The 10-year note yield was recently at 0.949% compared with last Thursday's 0.913%

Analysis

DZ Bank rises the Dürr target to 43 (34) EUR – Buy


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