What You Need to Know
- The FDA approval could lead to more vaccine mandates as the delta variant surge has hurt the economic recovery.
- Attention turns now to the Fed and Chairman Powell's upcoming speech at Jackson Hole for signs of when taper starts.
- Oil, gold and Bitcoin prices also rose on Monday.
U.S. equities rose to record highs as the Covid-19 immunization drive was bolstered by U.S. regulators granting full approval for the vaccine made by Pfizer Inc. and BioNTech SE.
The S&P 500 and Nasdaq 100 rebounded from lows last week as the approval could lead to more vaccine mandates amid a surge in delta variant cases that has threatened the momentum of the global economic recovery. Mixed U.S. data Monday showed July home sales coming in higher than expected while growth at U.S. services and factories slowed to an eight-month low.
Treasuries were little changed and the dollar slipped as investors also looked ahead to the Jackson Hole symposium Thursday, which may offer insights into how and when the Federal Reserve plans to taper bond purchases.
“Amid another record high last Monday it’s remarkable that we’re looking to start the week yet again on the upside,” said Chris Larkin, managing director of trading at E-Trade Financial. “The gains last week couldn’t make up for the losses following the Fed confirming its intentions to taper its purchasing program. All eyes will remain on the Fed as investors will be looking for more guidance on the taper from Powell’s speech at Jackson Hole.”
Dallas Fed President Robert Kaplan said he’s open to adjusting his view that the Fed should start tapering its asset-purchase program sooner rather than later if the delta strain persists and hurts economic progress. Meanwhile, Treasury Secretary Janet Yellen has endorsed Jerome Powell for a second term as Fed chair, a move that could reduce uncertainty about the path for monetary policy.