Markets rise as end of COVID 19 downturn seen

Markets rose on Monday.

The S&P 500 jumped 3.2 percent, the STOXX Europe 600 surged 4.1 percent and the Nikkei 225 rose 0.5 percent.

Kristina Hooper, Invesco’s chief global market strategist, wrote that “the stock market has largely shrugged off the damage created by the pandemic-related cessation of economic activity” while Joe Saluzzi, co-head of equity trading at Themis trading, said that “the bets are coming in that we seen an end coming in sooner rather than later”.

A report by Moderna that it is seeing “compelling” early data from a phase-one clinical trial for its experimental COVID-19 vaccine helped boost markets, with Oanda’s senior market analyst Edward Moya saying that a vaccine “is a gamechanger” for an economic recovery but also warning that it “is still months away from being finalized”.

In the meantime, though, Morgan Stanley’s European equity strategist Graham Secker said that “this economic upturn is already largely priced in” by investors.

“We think valuations look full as we see further earnings downgrades as necessary for 2H20 and into 2021,” he said.

In contrast, Morgan Stanley's head of US equity strategy, is bullish “based on the equity-risk premium reaching the same levels observed in March 2009” when the US stock market began its post-financial crisis bull run.