Market snapshot: records tumble as vaccine news injects optimism

The winter period is turning out to be a typically positive time. How long can this Santa rally last?

Investor sentiment remains festive, with further vaccine progress underpinning new record closing highs for the S&P 500 and Nasdaq indices.

The US health regulator noted no concerns on the Pfizer (NYSE:PFE)/BioNTech (NASDAQ:BNTX) vaccine, while Johnson & Johnson (NYSE:JNJ) threw its hat into the ring, announcing that it could obtain late-stage trial results for its vaccine in January. Alongside a roll out which has now begun in the UK, expectations are increasing for a relatively early solution to the human and economic problems which the pandemic has caused.

Meanwhile, there are also signs of some progress in exiting a political stalemate which has thus far prevented any further fiscal stimulus. With US economic data remaining patchy, the need for a boost to Main Street is becoming increasingly evident, and investors are pinning hopes on some sort of package before the end of the month.

Further spikes given the positive sentiment leaves the Dow Jones ahead by 5.7% in the year to date, the S&P 500 by 14.5% with the Nasdaq continuing its surge and now up by 40%.

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With UK investors also preoccupied by negotiations with the EU, sterling recovered some poise on hopes that a last-gasp deal may yet be agreed before the 31 December deadline. However, the uncertainty has held back some of the otherwise generally positive pandemic sentiment, where the more recent direction of travel has been positive for the flagship index. 

Even though the FTSE 100 remains down by 12.6% in the year to date, a rally of 18% since the start of November has provided some signs of increasing inclination returning to the beleaguered index.