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AstraZeneca and the University of Oxford said that their COVID-19 vaccine candidate is cheaper for production and easier for distribution over its rivals. Also, the market cheered on Yellen news as she oversaw a solid economic expansion during her tenure as the former Federal Reserve Chain between 2014-2018.
The US stock market remained upbeat on Monday, November 23, as Dow Jones jumped over 300 points closing at 29,591 levels being boosted by the vaccine news. AstraZeneca Plc (LON: AZN) and the University of Oxford stated that their COVID-19 vaccine candidate is 90% effective. However, AstraZeneca notes that its vaccine is cheap and easy for production and distribution. Besides, it also claims to have better scalability than its rival’s vaccine candidates.
Positive Impact of Vaccine News on Dow and Other Indices
This is the third inoculation in November itself after Pfizer/BioNTech and Moderna Inc (NASDAQ: MRNA) released similar reports. After the vaccine updates, along with Dow Jones (INDEXDJX: .DJI) surging over 1%, the S&P 500 (INDEXSP: .INX) also gained 0.5% closing at 3,577 levels. Similarly, the Nasdaq Composite (INDEXNASDAQ: .IXIC) also surged 0.2% to 11,880 levels.
On the positive vaccine news, the index of commodity prices also closed at its highest since March 2020. This gives investors the hope of economic activity resuming worldwide at a faster speed than expected. On the other hand, the emerging markets’ stocks ETFs also closed at a 32-month high. Adam Crisafulli of Vital Knowledge said:
“With three vaccines now showing efficacy at 90%+ and health officials in the U.S. and EU rushing to approve them, the vaccination process is set to commence before the end of the year. This vaccine optimism is more than offsetting the very grim near-term transmission/mitigation landscape as cases spike and governments take further action to curb the virus spread.”
With the positive vaccine news, the tech stock corrected mildly while airline stocks jumped significantly.
Joe Biden Likely to Approve Janet Yellen as Treasury Secretary
Other positive political developments on Monday caused the stock markets to surge higher. Reports emerged that President-elect Joe Biden would most-likely nominate former Federal Reserve Chairperson Janet Yellen as Treasury Secretary.
As the Fed Chair between 2014-2018, Yellen ensured the solid economic expansion for the United States. During her tenure, the S&P 500 jumped 60% while she ensured that the interest rates remain low. Speaking to Reuters, Tom Graff, head of fixed income at Brown Advisory said:
“Yellen should be a very strong advocate for more aggressive fiscal policy, and given her gravitas around Washington, it may make her the single most effective fiscal expansion advocate Biden could have picked”.
Alli McCartney of UBS Wealth Management told CNBC:
Yellen “is a big name, with significant experience highlighted by her time at the Fed. I am not surprised markets are reacting favorably as this choice is reassuring, especially with the challenges that lie ahead including avoiding a double-dip recession and getting people back to work amidst rising virus cases.”
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