Dow 30,000 in Sight After Another Vaccine Rally

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Don’t dismiss that feeling of déjà vu. Today’s market action was absolutely similar to last Monday’s vaccine-fueled rally. This time, however, it was not Pfizer (PFE) and BioNTech (BNTX), but modern (MRNA, + 9.6%) releasing good news about its test candidate.

Early data suggests that Moderna’s mRNA-1273 vaccine is 94.5% effective, which Dr. Anthony Fauci, the nation’s top infectious disease official, called “truly exceptional.”

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Better yet, the modern vaccine can be stored for 30 days between 36 to 46 degrees Fahrenheit (about what you would find in a refrigerator), and for six months at -4 degrees. That’s much more lenient for storage and transportation purposes than Pfizer’s vaccine, which must be kept at -94 degrees.

“Pfizer’s News last week was great, but today’s modern vaccine news is even better,” says Ryan Detrick, chief market strategist at LPL Financial. “Being able to store the vaccine in a standard refrigerator for up to a month makes transportation and usability much easier. Yes, new cases and hospitalizations are increasing, but we are getting closer and closer to ending this pandemic.”

And just like last week, investors swallowed airlines, cruise lines and other COVID-battered stocks whose destinations are linked to the vaccine’s success. The Dow Jones Industrial Average jumped 1.6% to a new high of 29,950, lifted by big gains from industrial stocks such as Boeing (BA, + 8.2%) and Honeywell (HON, + 3.5%).

Another action on the stock market today:

The S & P 500 also hit a new high, gaining 1.2% to 3,626.

The small-cap Russell 2000 rewritten record books, rising 2.4% to 1,785.

Once again, the tech Nasdaq Composite lagged the group, finishing 0.8% at 11,924.

How to play this rotation

Wall Street professionals continue to have faith in a continuous rotation of the top 2020 winners and the most battered (but recovering) names in the market.

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“The path of least resistance for stocks appears to be greater right now, as favorable vaccine news, coupled with less uncertainty regarding the election, is proving to be a positive catalyst in the near term,” says Brian Price, Head of Investment Management at Commonwealth Financial Network. “It is encouraging that we are seeing a rotation of growth and momentum-oriented actions to value and cyclical names.”


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