Wall Street put on the rose-coloured glasses on Thursday and ignored the worse day ever for COVID 19 infections and deaths across the US, weakening economic data and decided to focus on life after vaccines.
But unconfirmed reports Pfizer has hauled back on its vaccine rollout plans saw the rose coloured approach disappear and market measures sagged.
At the same time a two and a quarter year high for the Australian dollar – over 74 US cents for the first time since July 2018 – will start focusing attention on the damage the stronger currency will start having on the local recovery.
It seems the optimism about the economic rebound in Australia this week has spread to the currency market and the Aussie is up sharply – more than 6% from the most recent low of 70 cents on Monday, November 2.
Nasdaq hit an all-time high on Thursday as investors stayed focused on a COVID-19 vaccine and looked beyond bleak economic data, while Boeing lifted the Dow.
The rosy-coloured sentiment saw the Aussie market rise in the final hour of trading – from around 13 points higher just before 6am to 25 points near the close before a late fade saw the market up just one point – indicating a weak start to the session from 10am.
Rises in oil, gold, iron ore and copper will help the ASX but the dollar is lurking as a nasty reminder of the downside to our success.
The S&P 500 ended with a slight loss and after hitting a record high.
The Dow ended up 0.29% at 29,969.52 points after trading above 30,000 points. The S&P 500 eased 0.06% to 3,666.71 and Nasdaq finished 0.23% higher at 12,377.18.
For most of the day investors ignored what was a terrible day for the US on Wednesday.
US media reported that on Wednesday the US saw record daily deaths (2,777), record new cases (nearly 205,000 just a month after the US single-day record topped 100,000 for the first time) and record hospitalisations (more than 100,000).
And investors seem to think that will all be cured by the arrival of untried vaccinations that will month to build to sufficient numbers to start having an impact.
But the optimism mostly prevailed so Boeing shares jumped over 7% after European budget airline Ryanair ordered 75 additional 737 MAX jets with a list price of $US9 billion, throwing a commercial lifeline to the embattled planemaker (The purchase price will be nowhere near that amount).
Tesla shares again surged – up 5% at one stage and drove the Nasdaq higher after Goldman Sachs upgraded the stock to “buy” in the run-up to the electric car maker’s addition to the S&P 500 at the end of this month.
The weak economic data was overlooked – such as the number of Americans filing first-time claims for jobless benefits fell last week, but remained extraordinarily high at 712,000 (and 13.6 million people remain on federal benefits due to expire at the end of December.
And the monthly survey of America’s huge services sector (a much more important source of economic growth than manufacturing) showed activity in the services sector slowed to a six-month low in November thanks to the rising tide of COVID-19 cases and government actions to try and limit them such as lockdowns, restrictions on movement and more social distancing
