Commenting on Pfizer’s COVID-19 vaccine and today’s trading, Gorilla Trades strategist Ken Berman said:
Pfizer's COVID-19 Vaccine Was 90% Effective During Trials
The major indices are all sporting lofty gains at midday as stocks exploded higher in pre-market trading thanks to a great vaccine-related development. Pfizer (PFE, +9.3%) announced that its COVID-19 vaccine candidate was over 90% effective during its stage-three trials involving 45,000 volunteers. The results exceeded even the most optimistic expectations and triggered an explosive rally in the hardest-hit industries and cyclical sectors. The Dow, the S&P 500, the Nasdaq, and even the small-cap Russell 2000 hit new all-time highs in early trading, despite the relative weakness of the tech sector and “stay-at-home” stocks, in particular.
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While the vaccine is unlikely to have a major impact on the current wave of outbreaks, it clears the way for a strong recovery in 2021. The fact that the uncertainty surrounding the race for the presidency also declined has also been helping risk assets this morning, with Joe Biden’s victory now looking all but certain. Thanks to the improving long-term economic outlook, Treasury yields surged higher across the curve, confirming the global risk-on shift, and the price of crude oil is up by almost 10% as well.
Dow: 29,405, + 1082 or 3.8%
S&P 500: 3,606 + 96 or 2.7%
Nasdaq: 12,041, + 145 or 1.2%
Russell 2000: 1,732, + 87 or 5.3%
Market breadth has been in line with the performance of the major indices this morning, with advancing issues outnumbering decliners by a 7-to-1 ratio on the NYSE at midday. Only 4 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 398 stocks hit new 52-week highs. The major indices have been hovering around their daily VWAPs (Volume-Weighted Average Price) throughout the morning session, pointing to a mixed and choppy afternoon. The energy sector exploded higher by over 10% in the first hours of trading, but financials, industrials, real estate stocks, and utilities all performed much better than the broader market, with tech stocks, communication services, and defensive consumer-related issues lagging behind amid the tectonic shift on Wall Street. Stay tuned!