S&P 500 rallies into all-time high close

• The S&P 500 rallied into the cash equity trade to set an all-time closing high of 3629.91.
• Bullish Asia data and trade news, and news of another, more easily distributable Covid-19 vaccine all helped.
• S&P 500 futures eye a test of all-time high levels set last week of 3667.75.

The S&P 500 rallied impressively into Monday’s US cash equity close, with the index gaining 10 points in 10 minutes to briefly surpass previous session highs at 3627.43, before finishing the session at a new all-time closing high at 3626.91, or 1.16% higher than last Friday’s close. S&P 500 futures, which have now paused trading briefly until 23:00GMT, continued to gain after the cash close, rising as high as 3630.

Vaccine and Asia trade optimism boosts US stock markets

S&P 500 futures were choppy in the immediate aftermath of Moderna becoming the latest major US pharmaceutical company to release positive results regarding the efficacy of its vaccine in preventing Covid-19 infection, just as they were following the Pfizer/BioNtech update last week.

Stay-at-home names were again hit (and Nasdaq 100 futures dropped), while industrial and tourism and hospitality-linked names rallied (Dow futures hit all-time highs), contributing to the mixed S&P 500 reaction. In the end, bullish undertones for long-term economic performance (i.e. the notion that the rising sea of the improving US economy will bring all ships, i.e. companies, with it) that Moderna’s more easily distributable vaccine (i.e. can be stored at above zero temperatures) presents won out and even the Nasdaq 100 finished the session in the green.

Prior to Moderna’s update, stock markets were already in a chipper mood, with risk appetite underpinned during Asia hours on a multitude of bullish factors, including; 1) strong Japanese Q3 GDP data, 2) strong Chinese October industrial production data, 3) news that 15 of Asia’s largest economies had signed a trade pact called the Regional Comprehensive Economic Partnership (RCEP) trade pact, creating the world’s largest trade bloc (members account for nearly a third of the global population and around 30% of global) and 4) the PBoC’s announcement of a new CNY 800bln 1-year Medium-term Lending Facility operation.

S&P 500 futures set sights on fresh intra-day all-time highs

Following Monday’s rally, S&P 500 futures now have last week’s all-time highs at just above 3660 in its sights. The index has conformed nicely to a bullish upwards trendline that has been in place since last Thursday’s low at 3515, and if this continues to be the case, all-time highs should be for the taking relatively soon.

Conversely, if this trendline does break, the door will be opened to a slide back initially to Monday’s US session lows at 3600, a level that attracted a lot of buying interest at the time. Should the sellers prevail there, the next level to watch will be last Wednesday’s high at 3575 and, below that, last week’s lows/US Presidential election week highs around 3510-3520. The 21 and 50-day moving averages are still some way further to the downside at 3443 and 3403 respectively.

S&P 500 futures hourly chart