Global stocks have started the week on a positive note as traders bet on a swift vaccination process. In Europe, DAX index and FTSE 100 futures have risen by 0.90% and 0.75% while in the United States, the Dow Jones and Nasdaq 100 futures are up by more than 0.50% and 0.30%, respectively. Elsewhere, in Hong Kong, the Hang Seng index is wavering after a sudden rise in new cases.
The main driver for global stocks today is news that countries are set to start vaccinations as soon as this December. Among the first countries that will start the exercise are the United States, Germany, and the UK.
This is after companies like Moderna and Pfizer sought emergency authorisation by major regulators. And in a report today, Oxford and AstraZeneca said that their vaccine prevented about 70% of Covid cases. That is lower than that of Moderna and Pfizer.
A Covid vaccine will be a positive thing for global equities, including the DAX, FTSE, and Hang Seng. Still, in the short term, it may be negative for the tech-heavy Nasdaq 100 index.
Later today, the key driver for major indices will be the flash manufacturing and services PMI numbers from Europe and the US. All these PMIs are expected to show a slight decline mostly because in November, most countries, started limiting movements and business activities.
Meanwhile, the US dollar index (DXY) is off by more than 0.25% today because of the risk-on sentiment in the market. Similarly, the positive vaccine data has pushed crude oil prices higher while gold and silver have lagged.
In the crypto industry, Bitcoin, Ripple, and Ethereum prices rallied during the weekend, boosted by large institutional purchases.
Ethereum price chart
Dow Jones technical outlook
On the four-hour chart, we see that Dow Jones futures have risen to the current high of $29,418, which is along the 25-day weighted moving average. It is also slightly above the 78.6% Fibonacci retracement level and last week’s low of $29,171.
It also appears to be forming a bearish flag pattern, which means that the index could resume the initial downward trend. However, if bulls are able to move above $29,500, it will send a positive signal for the index.
Dow Jones technical chart