Vaccine Optimism, US Election Clarity, Reduced Quarantine After Travel

European stocks are seen opening higher on Tuesday amid continued optimism surrounding covid vaccines and improving clarity over the political situation in the US as Trump clears the way for Joe Biden.

Charts (6)

European stocks are seen opening higher on Tuesday amid continued optimism surrounding covid vaccines and improving clarity over the political situation in the US as Trump clears the way for Joe Biden.

Three weeks after the US elections, Joe Biden received official acknowledgment that he effectively won the race to the White House. Trump liked the tweet, sending the message that he has come to terms with the election outcome even though he vows to keep fighting it.

The prospect of a disorderly transfer of power has dragged on the market for the past three weeks since the election; a line can now be drawn under this risk.

Vaccine optimism continues
The dominant driving force behind the market has been progress in vaccine development with AstraZeneca announcing yesterday that under a particularly dosage, it vaccine is 90% effective and can be stored at room temperature making it significantly easier to distribute than Moderna and Pfizer’s vaccine.

Germany’s GDP beat
Adding to the upbeat mood Germany’s final reading for Q3 GDP printed at 8.5% QoQ ahead of the 8.2% expected and an impressive recovery from Q2’s historic 9.7% contraction. However, following yesterday’s disappointing PMIs, which points to a double dip recession, the GDP figures seem out of date. More attention could be paid towards German IFO due to be released shortly.

Airlines soar as quarantine cut
Lockdown restrictions in Europe are still very much in place but there is talk of these easing which is offering support to sentiment. Aviation stocks, which have been one of the worst hit sectors across the crisis continue to post a strong recovery. News that the UK government is offering tests as a way to cut quarantine periods could give travel a boost over the Christmas period. IAG trades +4.4%

FTSE Chart


More from FTSE 100

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.