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Dow, S&P Jump Over 3% on Encouraging Vaccine Data

Jim Giaquinto
·6 mins read

Stocks gained more on Monday than it lost all of last week, as good news for a potential coronavirus vaccine sent the Dow higher by more than 900 points.

Biotech company Moderna (MRNA) announced positive phase 1 results for its coronavirus vaccine candidate. Shares of the company jumped 20% on Monday.

Even with the curve being flattened and sections of the country opening up, the market considers a vaccine to be the ultimate victory over this virus. So stocks could hardly contain themselves on news of progress on the medical front.

The Dow soared 3.85% (or nearly 912 points) to 24,597.37, while the S&P was up 3.15% to 2953.91. The NASDAQ took a break from outperforming its counterparts, but still jumped 2.44% (or about 220 points) to 9234.83.

The indices are now on a 3-day winning streak and completely recovered from last week’s deficit, which saw losses between 1% and nearly 3% for the major indices.  

Companies that are most susceptible to the virus did well on Monday. For example, Carnival (CCL) jumped more than 15% today, along with impressive performances from airlines such as United Airlines (UAL, +21.6%), Delta Air Lines (DAL, +14.2%) and Southwest Airlines (LUV, +13.9%).

And the financials did well today too, including Citigroup (C, +9.3%), Wells Fargo (WFC, +9.4%), Bank of America (BAC, +7.4%) and JPMorgan (JPM, +5.9%).

A potential vaccine is certainty more than enough reason for stocks to take off, but we also got some help from Fed Chair Jerome Powell. On a ’60 Minutes’ interview over the weekend, he said that there’s a lot more the Fed could do to help this economy during the shutdown.

Much like his statement on Wednesday, Mr. Powell really didn’t say anything surprising. But his tone was better, which is important for a market running on hope. For example, he stated: “we’re not out of ammunition by a long shot”.

That’s a lot better than talking about future uncertainties and downside risks.

By the way, if you still want more of Mr. Powell, he’ll be testifying remotely to the Senate Banking Committee tomorrow.

Tuesday also brings earnings reports from retail giants Wal-Mart (WMT) and Home Depot (HD), which will be even more interesting following last week’s dismal retail sales report.

What a fantastic way to begin the week! The market feels that we may be in the process of turning the corner on this virus. Re-opening parts of the economy is great… but progress on a vaccine is paramount.

Let’s keep the momentum going all week!

Today's Portfolio Highlights:

Commodity Innovators: The portfolio picked up a couple more energy names to start the week as the space looks to have stabilized after the recent plunge in prices. Shares of Chevron (CVX), one of the biggest oil & gas companies in the world, have rallied more than 70% since its lows in the March crash. Jeremy thinks it’s poised to get back over $100 in the long term and appreciates the nearly 6% dividend yield. The other buy was Cabot Oil & Gas (COG), a low-cost natural gas producer that’s much smaller than CVX. However, this company is a Zacks Rank #2 (Buy) that beat earnings estimates by 7% in its most recent quarter despite the extremely negative environment for energy. The editor likes that resilience, which helped shares rally 60% off the lows to easily make new 2020 highs. Read the complete commentary for a lot more on today’s additions of CVX and COG, including a look at their charts.

Technology Innovators: Back in late January, Brian sold Silicon Motion (SIMO) for a gain of more than 24% in a little under three months. Well, the editor thinks it’s time to get back into this Zacks Rank #2 (Buy) chip stock. Of course, the main attraction to this name remains its place in the “Apple ecosystem” as a supplier. And it’s also nice to see four straight quarterly beats with an average surprise of 13%. SIMO is cheap for a chip name showing 40% topline growth, so Brian is getting back into this stock at a very advantageous price. Read the full write-up for more on this addition. This portfolio also had one of the best performers of the day as GreenSky (GSKY) jumped nearly 14%.

TAZR Trader: With an earnings report coming on Thursday, Kevin decided to sell half of NVIDIA (NVDA) for a nice return of 63.1% in just two months. The editor also sold half of bearish plays Dow30 3X Bear (SDOW) Direxion S&P 500 3X Bear ETF (SPXS) each, as Jerome Powell’s television interview and Moderna’s exciting vaccine news suggests that the market could be moving higher from here.

Surprise Trader: This portfolio doesn’t usually buy companies that are rallying, but what can you do on a day like this? Plus, Dave really hates it when he holds off on buying during an up day only to see the stock jump again in the very next session. Therefore, the editor decided to buy Apollo Investment Corp. (AINV) despite the stock being up big on Monday. This business development company has a positive Earnings ESP of 1.56% for the quarter coming before the bell on Thursday. AINV has beaten earnings for four quarters in a row, including a positive surprise of more than 17% last time. Dave added the stock with a 12.5% allocation today, while also selling Nomad Foods (NOMD) for a more than 6% return in less than 2 weeks. Read the full write-up for more on today’s moves. One more thing: this portfolio saw Plantronics (PLT) jump approximately 16% in the session, which made it one of the Top 5 performers of the day. 

Marijuana Innovators: For the second consecutive session, this portfolio had the top two performers of the day. Once again, the biggest winner was HEXO Corp. (HEXO), which soared nearly 37%. The runner-up was Zynerba Pharma (ZYNE, +22.2%).

Black Box Trader:
There were only two changes to the service in this week's adjustment. The stocks that were sold included Nomad Foods (NOMD, +2.1%) and CNX Resources (CNX, +1.3%), which were replaced with the additions of Flowers Foods (FLO) and Humana (HUM). Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.

Have a Great Evening,
Jim Giaquinto

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