Vaccine companies continue to deliver positive news, as a third candidate, AstraZeneca has reported another positive trial results; casting hope for a foreseeable end to the pandemic despite raging increases in case numbers. Vaccine news, coupled with diminishing uncertainties on the political front in the US saw positive market sentiment globally throughout the week, as investors continued to turn to cyclical stocks that would benefit from a long term market recovery. Commodity wise, increased risk appetite from investors saw gold, the safe haven asset continuing its dip throughout last week while crude oil prices climbed for the 4th consecutive week.


In the News

  • Vaccine optimism seemed to offset the continued surge in case numbers worldwide, as worldwide case numbers surpassed 63 million cases, with the US recording over 13 million cases.
  • Yet another vaccine candidate has announced its trial results; with AstraZeneca announcing an approximate 90% efficacy rate and the availability of up to 200 million doses of the vaccine worldwide. However, experts have voiced their concerns over the validity of the data following an error in test subjects.
  • Uncertainties on US politics took a turn for the better, as US president Donald Trump has authorised GSA, the agency in charge of the presidential transition in power to begin the transition process, giving the Biden transition team access to necessary resources.
  • Investors gained more confidence in US markets during its shortened trading week, continuing its rotation into cyclical stocks as reopening hopes perseveres. During the week, the S&P500 index recorded 2.27% gains, while the Dow Jones Industrial Index saw 2.21% gains  in MYR terms. Tech-focused Nasdaq continued to outpaced its peers, ending the week 2.96% in the green.
  • The NYSE FANG+ Index continues to outperform its peers, upping 3.93% in MYR terms last week. Among the constituents, Tesla contributed most of the gains, as the electric car maker continues to benefit from its inclusion into the S&P500. The jump in the index brought on a 8.57% gain in the 2x Leveraged 0830EA, with a YTD performance of 122.94%. 
  • Chinese markets saw gains as economic data continued to provide strong evidence of economic recovery from the pandemic, with the Shanghai Composite and the CSI 300 Index gaining 0.91% and 0.76% respectively throughout the week in CNY terms. However, due to currency fluctuations, the indices returned 0.11% and -0.04% respectively in MYR terms.
  • However, the Electric Vehicle (EV) sector jumped into correction territory following government state planner’s probe into property developer linked new EV projects. As a result, the S&P New China Sectors Ex A Share Index, which includes EV stocks as its constituents underperformed the broader market,  declining 0.07% in MYR terms, causing the 0829EA to also end 0.07% in the red in MYR terms.
  • In local markets, positive news outweighed the negative as the 2021 Budget, the largest in its history passed its first and most important hurdle in Parliament, coupled with continuous positive vaccine news. The government announced its preliminary purchase agreement with Pfizer to obtain 12.8 million doses of its vaccine.
  • However, pandemic numbers locally continued to hit record daily highs following a cluster that was discovered in glove heavyweight Top Glove’s dormitory facilities, which caused a shutdown in 27 of its factories.
  • The KLCI index continued its upward momentum to end the week 0.87% higher, while the DWA Malaysia Momentum Index continued to outperformed the broader market as positive momentum continued to show in markets. As a result the index saw 0.95% gains while the 0836EA ended 0.87% in the green.  
  • The MSCI AC Asia ex Japan IMI / EQ REITs HDY Tilt Cap Index continues to gain upwards momentum, as positive vaccine news continues to push market rotation into cyclical stocks, as investors gain confidence in the recovery of the REITs sector. Throughout the week, the index saw a further 0.99% in gains, with the 0837EA recording 1.06% of gains throughout the week. 
  • Gold prices dipped another 3.70% last week, as investor’s increased risk appetite saw further transition from the save haven asset into risky assets throughout the week. The 0828EA followed suit, dipping a further 3.71% last week in MYR terms. YTD returns of the ETF remains positive at 16.76%. 


On the Economic Data Front

  • US economic data fails to meet expecations:
    • Initial jobless claims rose unexpectedly to 778,000.
    • Consumer sentiment index numbers for November hits lowest since August, recording at 96.1.
    • Personal incomes in October dipped by 0.7%, offsetting the gain from September.
  • China PMI readings shows extended recovery:
    • Composite PMI shows 0.4 growth to 55.7 in November. 
    • Official manufacturing PMI numbers recorded at 52.1, a record high since September 2017.
    • Retail PMI hit record highs since June 2012, recording at 56.4.

  • Eurozone reports contraction in economy due to tightened lockdown measures:

    • Preliminary reports shows that manufacturing PMI dipped to a 3 month low of 53.6 in November.
    • Services PMI slid to a 6 month low reading of 41.3.


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