A rally in stocks fueled by vaccine hopes, the Janet Yellen appointent and moves towards a smooth Biden transition, saw the Dow Jones Industrial Average Index pass 30,000 for the first time ever.
After over a century of tracking the stocks of big U.S. companies, the Dow Jones, a measure of 30 companies, mostly blue-chip stocks spread across a range of industries, finally surpassed the key 30,000 level, having finished the day up almost 455 points, or 1.5%, closing at 30,046.24.
Causing the rally in stocks was a triad of factors.
Coronavirus Vaccine Hopes
Growing hopes of a global vaccine rollout have been boosting risk appetite amongst investors which in turn has seen more investment in stocks.
Equity prices soared on all the world’s leading bourses, with the UK’s FTSE 100 hitting a 5-month high after Moderna said its treatment for the COVID-19 virus was nearly 95% effective.
The announcement by the pharmaceutical company, following that made by Pfizer a week ago, has boosted confidence that an end to the pandemic is in sight.
Smooth Biden Transition?
Boosting markets and investor sentiment was the heightened prospect of a smooth transition to the Biden presidency. After several weeks of frustrating delay, which included various lawsuits and challenges, President-elect Joe Biden’s team confirmed on Tuesday that a formal transition has started.
Although there is still a great deal of uncertainty over the level of cooperation the Trump administration will give, the moves being made provided solid reassurance to investors that the transition will be cleaner than expected.
The Yellen Factor
The markets and investors also welcomed the news that Joe Biden has chosen Janet Yellen, the widely respected former Federal Reserve chair, as treasury secretary.
74-year old Yellen proved a popular choice. The economist described her appointment as something “Both progressives and conservatives can find things to like about the former chair of the Fed.”
