FDA May Approve Pfizer’s And Moderna’s Vaccine Candidates

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FDA May Approve Pfizer’s And Moderna’s Vaccine Candidates
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Commenting on the possible approval of Pfizer’s and Moderna’s vaccine candidate and today’s trading Gorilla Trades strategist Ken Berman said:

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Q3 2020 hedge fund letters, conferences and more

Nasdaq Closed At An All-Time High

Nasdaq closed at an all-time high yet again and even the weaker S&P 500 and Dow remain only a tad below their highs from Friday. The resilience of the major indices was impressive today, even as the recent COVID trends have been gloomy, and besides the large-cap benchmarks, the Russell 2000 also held up well, which could mean that the broad-based rally will continue this week.

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The main sectors continue to diverge substantially on Wall Street as the mixed COVID headlines impact stay-at-home and reopening stocks differently. The energy sector dropped sharply due to the spike in the number of cases and hospitalizations, while real estate stocks, financials, industrials, materials, and the healthcare sector all lost some ground as well. Tech stocks and communication services ticked higher, boosting the Nasdaq, and on a positive note, consumer-related issues recovered well following a bearish morning session on hopes that a stimulus deal will soon be announced.

Politics will likely continue to take center stage throughout the week, as Congress will be busy avoiding a government shutdown and passing the long-overdue fiscal package. Last week’s mixed job market reports will likely be enough to convince lawmakers about the need for further stimulus even as, according to most forward-looking measures, the U.S. economy will avoid a double-dip recession. There were rumors circulating that an agreement could be reached today, bu

FDA Might Follow UK And Approve Pfizer's And Moderna's Vaccine Candidate

The FDA is expected to follow in the footsteps of the U.K.'s regulatory body and approve Pfizer's and possibly Moderna's vaccine candidates as early as this week. While the former firm reported supply chain issues last week, the domestic supply seems to be safe, and vaccinations for the highest priority groups could start by the end of next week. The successful launch of the program could be a major bullish catalyst for risk assets and could lead to a strong Santa Claus rally in stocks despite the overbought momentum readings.

The domestic economic calendar will be low on key economic releases again tomorrow, with only the NFIB Small Business Index coming out just after the opening bell. While the impact of the current wave of outbreaks is uncertain on the sector, analysts expect a small drop in the measure, but the probability of a sizable surprise is high. That said, the stimulus talks will likely continue to determine the trends among small-caps, and with a deal looking more and more likely the Russell 2000 could remain strong in the coming days. Stay tuned!

Headlines

  • Stocks finished mixed following a choppy and nervous session on Wall Street as the vaccine rally paused yet again
  • The U.K. will start its vaccination program tomorrow, being the first Western country to do so
  • The FDA is expected to approve Pfizer's (+2.2%) vaccine later this week adn vaccinations could start by the end of next week
  • The number of new COVID infections hit new records again in recent days together with hospitalizations in the U.S.
  • The latest reports suggest that we could finally have a stimulus agreement at our hands in the coming days

Market Wrap

Index G/L Current level Year-to- date 50-day 200-day
Dow -148 30,070 5.4% 28,628 26,234
Nasdaq 56 12,520 39.5% 11,658 10,138
S&P 500 -7 3,692 14.3% 3,493 3,161
Russell 2000 -1 1,891 10.7% 1,664 1,456

Decliners outnumbered advancing issues by a  3-to-2 ratio on the NYSE today, with 108 stocks hitting new 52-week highs and only 1 stock hitting a new 52-week low, while volume was in line with the average.

Price Action Gauge ******** (reading for 12/07: 76)

Despite today's mixed showing, stocks remain in bullish trends across the board and the major indices are still at or slightly below their all-time highs in the face of the short-term uncertainties.

Oversold/Overbought Gauge ******** (reading for 12/07: 21 Color: green)

The key momentum indicators are still showing clearly overbought readings, but they are still shy of the extreme levels that would suggest that a correction is imminent.

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