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By Nicholas
Jasinski | Monday, January 25 Another
Shot in the Arm. Investors kicked off the
busiest week of fourth-quarter earnings season with the highest trading volume
day of the (still-new) year. It was a volatile session, especially for
technology shares. The tech-heavy
Nasdaq Composite got
off to a strong start, opening with a roughly 1.4% gain. By
lunchtime, the index was down 1.3%, but that slump didn't last long. An
afternoon comeback pushed the Nasdaq to a record-high close, up 0.7%. I wish I could give a good reason for
the wild swings, but today was just one of those days that
offered plenty of theories, yet few convincing ones. The S&P
500 closed up 0.4%, also at a record high,
while the Dow Jones Industrial
Average slipped 0.1%. About a
third of S&P 500 companies report their results for the last
three months of 2020 this week, including numerous high-profile names. Microsoft, General
Electric, Starbucks, and Verizon are among tomorrow's reporters, followed
by Apple, Facebook, and Tesla on Wednesday. Also
reporting tomorrow is Johnson
& Johnson, which will get even more
attention than usual. The pharmaceuticals and consumer goods giant has
promised to release clinical trial results for its Covid-19 vaccine
candidate by the end of January. Those could drop tomorrow morning
alongside its 2020 annual report. At the very least,
every analyst on the call will be peppering management with
questions about the trial. The world
could use some good news on the vaccine front. Merck said
today that it would give up on the two Covid-19 vaccines
it had been testing, while Moderna warned
that its vaccine might be less effective
against new strains of the virus. Given the
recent news headlines and first-person accounts of dose shortages in the
U.S., a third vaccine would be particularly good news for cyclical and
reopening-sensitive pockets of the market. Those have lagged more growth and
defensive-oriented stocks over the past few weeks. And the
hopes are high for J&J's candidate, given its single-dose regimen and
relatively simple storage requirements. Even if the efficacy doesn't
match Pfizer's or Moderna's 90%+ efficacy rate, a good
score on preventing the most severe Covid-19 cases will still have
an outsize impact on the vaccination effort. A vaccine from Novavax is also
currently in Phase 3 trials. As for the
current Covid wave in the U.S., the situation has quietly been improving on
the national level in the past few weeks. Yesterday's roughly 135,000
new cases was the lowest since Nov. 9, according to data from the
Covid-19 tracking project, and down almost 40,000 from the week-earlier
tally. The national positive rate also fell below 8% yesterday, and
hospitalizations are at their lowest level since mid-December. Several
individual states and regions remain much worse off than the national
average, and the pandemic is still undoubtably raging and out of control in
the U.S. But the overall trend is in the right direction coming off the
post-holidays bump in cases. Barron's Josh
Nathan-Kazis has all the latest on the vaccine
rollout and trials here. |
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