Stocks rally on Moderna vaccine news; bonds slump: markets wrap

US equity futures extended their gains on Monday after vaccine results from Moderna Inc. were found to be highly effective at preventing Covid-19. Treasuries slumped.

S&P 500 contracts jumped after the company said its vaccine was 94.5% effective in a preliminary analysis of a large late-stage clinical trial. They were up earlier after advisers to President-elect Joe Biden said they opposed a nationwide shutdown despite surging virus cases. The Stoxx Europe 600 also extended gains on the vaccine news.

Asian equities jumped after a slew of countries on Sunday signed the world’s largest regional free-trade agreement, encompassing nearly a third of the globe’s population and gross domestic product. Meanwhile, Australia’s stock exchange was hit by a software issue that forced it to close for most of Monday’s session. Oil pushed higher.

Global stocks are trading at an all-time high after optimism about a vaccine last week drove a rotation into value and cyclical sectors, and out of more defensive industries. Chinese data this week showed the country’s economic recovery strengthened in October, with consumer spending picking up steadily and industrial production and investment rising faster than expected.

“We do see a positive stream of news going forward,” Sean Fenton, chief investment officer at Sage Capital Pty in Sydney, said on Bloomberg TV. “The market looking forward towards eventual reopenings, real yields probably bottoming out, and cyclical and value stocks doing better, I think that’s a momentum that will be carried through at least over the next three to six months if not longer.”

Still, concerns about a sustainable economic recovery persist amid a flare-up in virus cases around the world. The pandemic continues to escalate in regions such as Europe and the US American coronavirus cases have topped 11 million. Germany must live with “considerable restrictions” against the spread of Covid-19 for at least the next four to five months, its economy minister said.

Meanwhile, President Donald Trump plans several new hard-line moves against China in the remaining weeks of his term, according to a senior administration official. Actions under consideration include protecting US technology from exploitation by China’s military, countering illegal fishing and more sanctions against Communist Party officials or institutions causing harm in Hong Kong or the far western region of Xinjiang, the official said.

Here are some events to watch out for this week:

• Brexit talks look set to continue as the UK and EU approach the latest deadline.
• Bloomberg New Economy Forum virtually convenes global leaders to discuss trade, growing political populism, climate change, and the pandemic. Former Federal Reserve Chair Janet Yellen and Indian Prime Minister Narendra Modi are among the many speakers. Through November 19.
• OPEC+ Joint Ministerial Monitoring Committee meets Tuesday.
• US retail sales due Tuesday.
• Bank Indonesia rate decision Thursday.