By Peter Nurse
Investing.com - U.S. stocks are set open higher Wednesday, boosted by positive news about a potential Covid-19 vaccine as well as strong earnings from Goldman Sachs (NYSE:GS).
At 8 AM ET (1200 GMT), S&P 500 Futures traded 42 points, or 1.3%, higher, and Nasdaq Futures up 65 points, or 0.6%. The Dow Futures contract rose 517 points, or 2%, trying to extend a three-day winning streak.
U.S. biotech firm Moderna 's (NASDAQ:MRNA) experimental Covid-19 vaccine was declared safe and generated “robust” immune responses in all 45 volunteers taking part in a study, according to early-stage human trial results published in the New England Journal of Medicine on Tuesday.
The vaccine "is more than a show stopper. It's the ultimate recession stopper," said Stephen Innes, markets strategist at AxiCorp.
Travel stocks have bounced strongly as hopes of a prompt vaccine delivery brings the idea of normalcy closer.
American Airlines (NASDAQ:AAL), United Airlines (NASDAQ:UAL), Carnival (NYSE:CUK), Royal Caribbean (NYSE:RCL) Cruises and Norwegian Cruise Line (NYSE:NCLH) all posted gains of over 8%.
This optimism has overshadowed lingering Sino-U.S. tensions, with U.S. President Donald Trump signing - as expected - an order to end preferential economic treatment for Hong Kong. Confidence that the U.S.-China trade deal won't break down completely was bolstered on Tuesday by news of China's biggest ever purchase of U.S. corn.
In earnings news, Goldman Sachs stunned the market with its best trading results in years. Revenue was up 41% more than a year ago and the firm’s second highest quarterly revenue ever, with investment banking revenue a record $2.66 billion. Its stock rose 4% in premarket trade.
The bank set aside $1.59 billion for potential credit losses due to the coronavirus, a big figure but one that pales alongside the combined $28 billion rival banks JPMorgan (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) had set aside Tuesday.
There’s a lot of U.S. economic data later Wednesday, with industrial production and manufacturing output due at 9:15 AM ET. That’ll come after weekly data on mortgage applications at 7 AM and the New York Empire State manufacturing index at 8:30 AM.
Oil prices pushed higher Wednesday, helped by a sharp fall in U.S. crude inventories of 8.3 million barrels, according to data from industry group the American Petroleum Institute. Official numbers from the Energy Information Administration are due later Wednesday.
The main focus of attention will be a meeting of OPEC’s technical staff, which is set to advise on whether the cartel and its allies, a group known as OPEC+, should extend output cuts of 9.7 million barrels per day that end in July or ease them to 7.7 million barrels per day.
At 8:05 AM ET, U.S. crude futures traded 1.5% higher at $40.91 a barrel, while Brent rose 1.3% to $43.41.
Elsewhere, gold futures fell 0.3% to $1,808.15/oz, while EUR/USD traded at 1.1439, up 0.4%.