US

After the US election, the recent vaccine news has been one of the most influential market news. Shortly after the media reported that the Democratic presidential candidate Joe Biden surpassed the 270 vote threshold, US pharmaceutical company Pfizer also announced that its in-house COVID vaccine is more than 90% effective in preventing infections, which drove global stock markets up, all three major US indexes hit new highs, crude oil soared, while safe-haven assets such as gold and US bonds came under pressure. On the hopes of a “game changer” vaccine, sectors that have been long under pressure due to COVID, such as airlines and movie theatres, saw strong rebounds; whereas sectors that have benefited from the epidemic, such as Internet video communication services, saw their share prices plummet, capital rotated back to old economy sectors. The US presidential election is still not fully resolved, incumbent president Donald Trump has indicated that he doesn’t accept the results of the election and said that lawsuits have been filed in six key states, which is expected to hinder any transition of presidential power. On one hand, the vaccine news is encouraging to the market, but on the other hand, the number of new COVID cases in the US has reached a record high of over 150,000 per day. Facing the worrying development of the epidemic, Federal Reserve Chairman Jerome Powell admitted that the economy is expected to face challenges in the coming few months. Next week, the US will release retail sales data for October.

EUROPE

Badly hit by the latest COVID outbreak, European stock markets were the big winners on vaccine news, both the UK and French equity indexes gained more than 7% over the past five days ending Thursday, and Spain's IBEX 35 even went up by more than 10% over the same period. Nevertheless, the governors of both the Bank of England (BoE) and the European Central Bank expressed caution on the positive vaccine news. The BoE's Governor Andrew Bailey also mentioned that any news on the UK's future relationship with the EU will likely influence the bank's policy direction in December, but at the moment, there is no clear timeline for implementing negative interest rates. The Eurozone will release the final CPI for October next week.

CHINA

China A-shares had a relatively weak performance over the week, while Hong Kong stocks fared better, the CSI 300 Index was down 0.59%, while the Hang Seng Index (HSI) rose 1.73%. Although the HSI rose this week, the Hang Seng Technology Index (HSTI), which reflects the performance of HK listed technology stocks, recorded a 2.6% drop. This was mainly due to the reported introduction of anti-trust guidelines in Mainland China, heavyweights in the HSTI drove the index down. As for economic fundamentals, China's inflationary pressures were further eased in October, with the CPI only growing 1.2% YoY. Next week, China will release data on retail sales, production, and fixed investment for October.