Much as they did the week before, European equities trimmed Monday’s Moderna (NASDAQ:MRNA) vaccine related gains. While largely not not making dramatic movements one way or the other, indexes’ biggest loser was the FTSE, posting around a 0.9% loss.
Cutting around 56 points, the FTSE took a hiatus from its recent surge, and slid back to 6,365 points. While shy of its recent 6,455 point peak seen yesterday, the level it finished Tuesday gives no cause for concern, and is markedly better than the sub 6k levels it has spent much of the past two months.
Elsewhere in European equities, the DAX stood still, down 0.04%, while the CAC added a modest 0.21%. Meanwhile, over the pond, the Dow Jones dropped by around half a percent, while the Nasdaq added 0.16%. Mr Beauchamp added:
“Overall the atmosphere is still positive but as the euphoria about possible routes out of the crisis begins to fade the focus will shift, to a degree at least, to the manufacture and distribution of the vaccines.”
“Neither of these things is likely any time soon, leaving investors to worry how much further the second wave will spread and how bad things could actually get over the course of the winter.”
“Nonetheless, risk appetite appears well-supported from here, seasonality, inflows and sentiment all providing a foundation for further gains into the end of the year.”
The debate will continue to rage over whether value stocks have seen a resurgence, or whether growth stocks – largely comprised of tech and biotech in 2020 – are still in vogue. The key to this debate, one may think, would be whether investors perceive that value stocks are merely seeing a brief boost – or whether the upward trajectory is here to stay.
One positive story for value stocks is that of EasyJet. Even having dropped on the news of its first full-year loss, the airline has boosted the FTSE over the past week, up from 722p to 742p, and peaking at 792p on Monday afternoon. Mr Beauchamp comments:
“After a 53% gain for the month so far the stock might be considered vulnerable to some downside via profit-taking, but it looks like investors are prepared to stick this one out for now, hoping perhaps that Q2 and Q3 will see a big recovery as the vaccine news filters through to consumers.”