An early Happy Thanksgiving to you and your family! The holiday will most likely be a little different this year, but enjoy your turkey feast, however that may look like! Gobble-Gobble! In an echo of last week’s Pfizer vaccine news, biotechnology company Moderna announced Monday that analysis of a late-stage trial showed its COVID-19 vaccine to be 94.5% effective. This news gave a boost to sectors such as energy and financials, whose businesses would be poised to benefit from a reopening of the economy. As the week progressed, the final results of Pfizer’s vaccine were released, revealing its efficacy rate to be 95%. It is likely that Pfizer will file for emergency FDA approval in the days ahead. The good news regarding vaccines is welcome as coronavirus cases are currently spiking across the country. While the stock market may be pricing in an eventual recovery in 2021, nearer-term headwinds for the economy may be in the offing. Given the rise in cases, many state and local governments are once again initiating lockdown procedures, ranging from 10 p.m. curfews for restaurants and bars to fully virtual classrooms for schools. Furthermore, many individuals are, of their own volition, again limiting time outside the home and sheltering in place as much as possible. The timing of these increased restrictions and limits on mobility could not be worse from an economic standpoint as the holiday shopping season, the most important time of the year for U.S. retailers, is rapidly approaching. Speaking of retailers, retail giants Wal-Mart and Target both announced a surge in quarterly same-store sales this week. Sales were buoyed by a jump in online shopping and same-day pick up for everything from electronics to home goods. Online retailers have been eroding the sales of brick-and-mortar retailers for years and the pandemic has only exacerbated the trend. As such, large retailers have had to adjust their business models swiftly – and thus far it appears they have been successful in doing so. As we move toward the end of 2020, the market is dealing with an ongoing tug-of-war. On one hand, any hint of constructive vaccine data may lead to exuberance around travel, leisure, and other service-related businesses that have seen revenues crimped by the pandemic. On the other hand, it is likely that in the days and weeks ahead there may be some economic retrenchment tied to lockdowns. This push and pull is one reason diversification is important. Spreading assets across a wide array of investments can help an investor participate in market exuberance when it occurs while also helping to manage any rough patches along the way. Stay safe and be well. Bryan The information provided, including references the markets, sectors, and individual companies are for general informational and educational purposes only and is not a recommendation of any kind or investment advice. Past performance is no guarantee of future results. Investing involves risk and the potential to lose principal.Diversification is an investment strategy that can help manage risk within your portfolio but it does not guarantee profits or protect against loss in declining markets.Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time and cannot be guaranteed. |
Pre-Thanksgiving Hendrickson Market Update
