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Risk assets jump, safe havens fall after Pfizer vaccine news

Reproduced from Charles Schwab; Chart: Axios Visuals

Risk assets had a very good day on Monday, but U.S. stock performance was mixed after news that a COVID-19 vaccine from Pfizer and BioNTech could be distributed to millions of people before the end of the month.

Why it matters: Beyond just stocks, Monday's market moves clearly reflected investor enthusiasm and a market pricing in a return to pre-pandemic life that will benefit risk at the expense of safety.

By the numbers: Oil prices jumped and broad stock market indexes around the world rose after news about the possible vaccine.

  • MSCI’s index of global stocks gained 1.3%.
  • Emerging market stocks rose 1.4%.
  • The pan-European STOXX 600 index rose 4%.
  • Oil prices posted their biggest daily percentage gain in more than five months, with Brent crude gaining 7.5% to close above $42 a barrel and U.S. WTI crude rose by nearly 8.5%, above $40 a barrel.

On the other side: Safe-haven assets were sold broadly, with 30-year Treasury yields rising by the most since March and the Treasury yield curve hitting its steepest level since March.

  • The Japanese yen fell against the U.S. dollar by 2%.
  • Gold, which had been moving largely in concert with broader equities prices in recent weeks, fell by almost 5% to its lowest since mid-July.

Between the lines: The Dow rose by nearly 3%, more than doubling the return of the S&P 500 (up 1.2%), while the tech-heavy Nasdaq fell by 1.5%.

  • The 30-company Dow was boosted by Disney, Boeing and Chevron, which each gained more than 11% on the day. The tech-heavy Nasdaq had its worst day since Oct. 30 and was led downward by companies like Netflix, which fell by around 9%, as well as Zoom and Peloton, which both declined by almost twice that much on the day.
  • Value and cyclical stocks outperformed growth and momentum stocks by the most in a single session since 2000 by some measures, according to FactSet.

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