Essential Insights 

  • US equity bourses stage a slight recovery following a short period of heavy selling
  • AstraZeneca vaccine trails have been abruptly paused amid a concerning reaction from a UK test patient
  • WTI crude oil has managed to stay above $36 support

Vaccine failure?

The AstraZeneca  vaccine trails through the University of Oxford , have been abruptly paused due to a reaction from a UK test patient. A spokesman said

 “this is a routine action which has to happen whenever there is a potentially unexplained illness in one of the trials, while it is investigated, ensuring we maintain the integrity of the trials.”

AstraZeneca said that the pause in testing was  “standard review process triggered a pause to vaccination to allow review of safety data.” However is AstraZeneca hiding something more mischievous ? I think so. Various representatives of AstraZeneca said the pause was “an abundance of caution” and that the findings of this patient reaction is impacting other AstraZeneca vaccines.

It is incredible that markets have priced in the prospects of a functional perfect vaccine so soon, without even knowing what the long term effect of these vaccines are. There is now a risk where millions of these vaccines will be produced and used, without fully knowing what the long term impacts are or if there are certain triggers that can create an adverse reaction. There is incredible risk here, hence why markets may begin to flock back towards safe havens.

Equities 

US equity bourses have staged a slight comeback with the Dow Jones Industrial average up +1.99%, the S&P 500 index up +2.05% and the NASDAQ composite index up +2.73% on the day. Elsewhere European stocks have also rose in line with US equities with the Euro Stoxx 50 up +1.78%, the DAX index up +2.07% and the FTSE 100 up +1.39%. Though the story remain more bleak for Asian equities ahead of an Asian summit underway, amid US-China fractions. The Nikkei 225 was down -1.04% and the Hang Seng Index slipped -0.63%.

Interestingly the NASDAQ 100 is now approaching a 50-day moving average as illustrated in the chart above from Bloomberg. This is a critical point for markets, market participants will either see this dip as a buying opportunity, using the 50-day moving average as a support OR decide that a further correction is needed.

WTI Crude Oil

WTI Crude Oil has staged a comeback after falling more than 10% within the space of three trading days. Prices are currently up +3.74% but for how long ?. Analysts expect crude inventory numbers to decline which could be one of the primary reasons why crude oil is gaining a bid here, but with Saudi initiating price cuts Oil sold in Asia, it is likely that Western countries will follow the same approach. In additional the import demand, is mostly due to a market share war between China , Russia and Saudi Arabia, rather than imports for real petroleum product consumption. Additionally it is speculated that the crude imports from China will decrease as they have now loaded up storage containers with Crude Oil. Further developments , especially from OPEC should be watched carefully, previously OPEC discussed reducing supply cut, with Oil prices still significantly down , they may be forced to try and convince OPEC and non-OPEC members to extend cuts for a longer than expected period.