Global stock rally tempers after vaccine euphoria

INTERNATIONAL – The global rally in stocks slowed its pace on Tuesday while haven assets found support amid concern that a promising coronavirus vaccine study still has hurdles to clear.

The Stoxx Europe 600 Index edged higher at the opening with some of Monday’s biggest gainers — travel and energy stocks — increasing more moderately. The gauge jumped 4 percent yesterday.

US equity futures erased earlier declines, signalling the underlying index may add to its two-month closing high reached Monday on news the coronavirus shot being developed by Pfizer and BioNTech prevented over 90 percent of infections.

Treasuries were steady as investors focused on the risks that fresh US fiscal stimulus may now be less than expected. Surging coronavirus cases and legal challenges to the US election outcome also weighed on sentiment.

After their knee-jerk reaction yesterday, investors are reappraising how much further they might switch out of havens into risk assets, and out of stay-at-home stocks and into pandemic laggards such as the travel and energy industries. While US junk-bond yields fell to a record low, investors are cautious that there are still many details to still come out about vaccine roll-outs.