A Game Changer

By Alex Eule | Monday, November 9

Shot in the Arm. Investors on Monday were on track to get their first chance to respond to Joe Biden being declared the winner in the U.S. presidential election. Then the one headline that could take precedence crossed the wire. At 6:45 a.m. ET, Pfizer and BioNTech said their Covid-19 vaccine had shown 90% efficacy in the initial results from its Phase 3 study. Stock futures soared on the news and kept going from there. The Dow Jones Industrial Average was up 1,600 points when markets opened at 9:30 a.m. Based on intraday figures, that was good enough for an all-time high of 29,934. 

Reopening plays like cruise operators Carnival and Royal Caribbean surged. They finished the day up 39% and 29%, respectively. SL Green Realty, an owner of office buildings and shopping centers, jumped 37%. Pfizer itself rose 8% on the day.

Airlines, hotels, department stores, energy companies, and regional banks all had gains in the 20%-plus range on the day. 

And then there were the losers. Not surprisingly, the stay-at-home stocks that soared throughout the pandemic tumbled on the vaccine news. Peloton Interactive fell as much as 25% in midday trading, while Zoom Video was down as much as 20%. The tech-heavy Nasdaq Composite fell 1.5%.

Late in the day, though, investors got a reminder of our volatile times. Senate Majority Leader Mitch McConnell expressed support for President Donald Trump's election battle and declined to congratulate President-elect Joe Biden. His speech on the Senate floor inserted new uncertainty into the transition period.

Stocks quickly gave up some of their gains, with the Dow ending up only 835 points. Peloton and Zoom, which have somehow become "risk-off" plays, pared their losses a bit, finishing down 20% and 17%, respectively. 

Suddenly Covid-19 is the thing we control. No one can say the same about our politics.

DJIA: +2.95% to 29,157.97
S&P 500: +1.17% to 3,550.50
Nasdaq: -1.53% to 11,713.78

The Hot Stock: Carnival +39.3%
The Biggest Loser: Biogen -28.4%

Best Sector: Energy +14.3%
Worst Sector: Communication Services -0.9%