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the S&P 500 Index gained 87 points, or 2.5%, reaching an all-time high on November 9. Today’s big upward move came after it was reported that the COVID-19 vaccine candidate from Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) is over 90% efficient and is in the process of obtaining emergency use authorization pending additional safety data in the coming weeks.
The news, along with all the major independent media outlets that former Vice President Joe Biden would win the US presidential election, has caused investors to aggressively rally in many stocks today. Some of the worst performing stocks of 2020 were today’s biggest winners. REIT office SL Green Realty (NYSE: SLG) and retail REITs Regency centers (NYSE: REG) closed 37% and 35% respectively, while cruise passengers Carnival (NYSE: CCL) stocks jumped 39% and the oil producer Diamondback Energy (NASDAQ: FANG) increased by 31%. Even after today’s big gains, all four are still down between 46% and 73% since the start of the year.
Image source: Getty Images.
Surprising statistics: latecomers lead the way
These latecomers at the top are no exception today; they were the rule: the top 100 stocks in today’s S&P 500 gained at least 11%, but they are still down since the beginning of the year. Plus, at least 95 of today’s biggest winners are still down more than 10% so far this year.
Put simply, investors have flocked to industries that suffered the brunt of the 2020 coronavirus pandemic, including real estate (especially retail and office space), travel and hospitality. , as well as oil and gas.
The energy sector in particular has had a huge day. Oil prices jumped more than 7%, pushing West Texas Intermediate and Brent Brent futures above $ 40 a barrel on prospects for a faster global recovery in travel and economic activity that investors weren’t betting last week. As a result, the ETF Energy Select Sector SPDR (NEW: XLE), which tracks S&P 500 energy stocks, is up nearly 16% today. Oil giants ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) gained 14% and 13% respectively.
Best stocks of 2020 sold
At the red end of today’s ledger, some of the best-performing stocks of the year have fallen sharply, particularly e-commerce and “work from home” stocks. Actions of Amazon (NASDAQ: AMZN) fell 5%, Etsy (NASDAQ: ETSY) stocks fell 17% and Best buy (NYSE: BBY) lost 10%. So far this year, Amazon shares have risen 79%, while Etsy and Best Buy shares have risen 230% and 40%, respectively.
Of the 100 worst performing stocks in today’s S&P 500, 94 are still up this year, and the vast majority are still up double digits.
What should investors think of stocks today?
In short, today has been a tremendous day for the market as a whole, but many of this year’s biggest winners have fallen sharply as investors turn their attention to the laggards.
On the one hand, this makes sense: the commercial real estate, energy, and travel and hospitality industries have a lot to gain after a brutal 2020. An effective vaccine is needed to finally emerge from the pandemic and return to normalcy. That said, it will be several more months before a vaccine becomes widely available. Pfizer / BioNTech says it can produce 50 million doses by the end of December, but that’s only enough to treat just 25 million people (it’s a two-dose vaccine).
Bottom Line: Today’s news is an absolute boon in the fight against COVID-19. But the trajectory of a return to normal hasn’t changed much, and it is still likely to be well advanced in 2021 before enough vaccines have been produced – and likely by several drug companies – and administered. around the world to end this pandemic. .
Investors have much to be happy about today. But don’t expect things to get back to normal quickly; they won’t. This likely means that some of today’s worst performing stocks will continue to be the best performing companies for the remainder of 2020, and most of 2021 and beyond. Conversely, some of today’s biggest winners still face a very difficult outlook, and investors who bet on a quick recovery today might find out how they jumped too quickly.
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