Monday- November 9, 2020 – DIA 291.72 +3.00%, QQQ 288.59 -2.04%, SPY 354.56 +1.26%
No economic data released. On Big News, the equity markets gapped 3-4% higher but faded throughout the day. The market took off on the COVID-19 vaccine trial data released by Pfizer (PFE) 39.20 +7.69% which showed 90% efficacy in a trial well above the 50% level required by the FDA. That set off sector rotation, the hardest hit and shunned sectors that had taken the brunt of the lockdowns came to the fore, while beneficiaries due to lockdowns were sold aggressively. The travel & leisure sector did well, Carnival (CCL) 19.25 +39.29%, Expedia (EXPE) 128.64 +24.57%, Marriott Hotels (MAR) 118.30 +13.87% as they outpaced the markets. In the retail sector Ross Stores (ROST) 107.82 +15.56%, and ULTA Beauty (ULTA) 247.20 +14.97% outperformed. On the downside were stay and work from home theme companies Zoom (ZM) 413.24 -17.37%, and DocuSign (DOCU) 197.60 -14.71%. Home improvement stocks Home Depot (HD) 269.77 -5.02% and Whirlpool (WHR) 180.69 -10.39% got hit as well. The day’s big drop was Biogen (BIIB) 236.26 -28.17 which wiped out and reversed this past Thursday’s massive anticipatory gain as an outside FDA advisory panel recommended against approval of its Alzheimer’s drug Aducanumab.
Tuesday- November 10, 2020 – DIA 294.51 +.96%, QQQ 283.42 -1.79%, SPY 354.04 -.15%
The Bureau of Labor Statistics (BLS) released its JOLTS report on job openings which came in light of expectations of 6.436M vs. 6.5M. The equity markets continued to absorb the vaccine news from Monday and the rotation theme continued, ending the day with the tech sector under pressure and former lagging sectors such as energy and industrials outperforming. On the downside stocks that had benefited from lockdown such as Zoom (ZM) 376.01 -9.01% continued their sell-off, as well as stocks that exhibited strong growth during the pandemic such as NVIDIA (NVDA) 510.80 -6.31%. On the upside stocks that would exhibit cyclical growth in a reopening of the economy did well, railroad CSX Corp. (CSX) 91.40 +3.36%, retailer Nordstrom’s (JWN) 17.73 +9.72%, and integrated energy provider Chevron (CVX) 83.07 +4.62% all did well.
Wednesday, November 11, 2020 - DIA 294.22 -.10%, QQQ 289.76 +2.24%, SPY 356.72 +.76%
No major economic statistics were released as it was Veterans Day which is a government and national banking holiday. The markets reassessed the Pfizer (PFE) 38.50 -.47% vaccine news on two fronts. The first was there were reports that the CEO of Pfizer sold upwards of 62% of his holdings in the company’s shares on Monday (the day of the news release) in a pre-planned program. But being close to top tick, it was NOT a good look. The second front was the markets shift in focus to the logistics of transporting and maintaining the proper storage of the drug, as the vaccine needs to always be kept below -94F and two painful shots would be required over 3 weeks. Lockdown beneficiaries started a comeback from the previous two days selling, traders snatched beat up darlings like Zoom (ZM) 413.34 +9.93%, DocuSign (DOCU) 208.55 +5.16%, and NVIDIA (NVDA) 536.72 +5.07. and on the downside retailers/leisure travel took it on the chin, Kohl’s (KSS) 23.52 -10%, Ross Stores (ROST) 104.18 -4.79%, Marriot (MAR) 116.39 -1.76%
Thursday, November 12, 2020 – DIA 291.05 -1.04%, QQQ 288.40 -.47%, SPY 353.21 -.97%
Inflation gauges CPI Ex-Food & Energy (MoM) came in at 0% vs. .2% consensus, while (YoY) came in at 1.6% vs. 1.8%. Fed Chairman Jerome Powell was a scheduled speaker, but the market's attention was otherwise focused on the continuing resurgence of COVID-19 and the increasing restrictions on the economy. Lockdown beneficiaries continued to rally, Zoom (ZM) 428.64 +3.7%, DocuSign (DOCU) 212.62 +1.95%, Clorox (CLX) 207.53 +2.44% .On the downside were companies highly effected by economic restrictions, travel & leisure stocks, Carnival (CCL) 14.93 -7.90%, Norwegian (NCLH) 51.60 -3.43%, retailers ULTA Beauty (ULTA) 248.08 -2.87, and Macy’s (M) 6.99 -5.67%.
Friday, November 13, 2020 – DIA 295.15 +1.41%, QQQ 290.93 +.88%, SPY 358.10 +1.38%
The Michigan Consumer Sentiment index was light of expectation 77 vs. 82. PPI Ex-Food & Energy was light as well 1.1% vs. 1.2% Technology bellwether Cisco Systems (CSCO) 41.40 +7.06%, reported much better earnings than expected $.76 vs. $.632 and gave an upbeat forecast. The stock markets moved higher in subdued volume all day. Remarkably, retailers showed remarkable resilience, which are companies that would not fare well in another sustained economic lockdown showing strength. Keep an eye on this volatile sector. Retailer ULTA Beauty (ULTA) 262.35 +5.75%, and on-line travel agency Expedia (EXPE) 123.45 +5.06% both advanced along with high-end retailer Nordstrom’s (JWN)17.31 +10.33%. On the downside video conference provider Zoom (ZM) 403.58 -5.83% and office technology company DocuSign (DOCU) 205.70 -3.25% came under selling pressure.
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